Rockingham County is expected to see a significant increase in jobs over the next decade, but participation in the workforce is expected to decline as the state’s population ages.
This creates an economic problem, economist Dennis Delay of the New Hampshire Center for Public Policy Studies told the Planning Board at its April 1 meeting.
Delay said the implication is the state’s labor force will be a limiting factor on the ability of New Hampshire to grow in the future.
Member Chris Davies asked if the drop in the workforce eligible population will put pressure on wages and impact how attractive New Hampshire is to people looking to move into the state.
“That’s another way the market will solve the problem. I think you will see a lot of upward pressure on wages because employers won’t have the people to hire,” Delay said, explaining the biggest different between New Hampshire and neighboring states is that the Granite State experienced a “great migration” in the 1980s.
About 70 percent of New Hampshire’s adult population was not born in the Granite State. Other states in New England have 40 to 50 percent of adults who were not born there, according to Delay, noting those other populations have grown more slowly.
“I think we’re going to look more like Maine and Vermont, with slower population growth and slower economic growth” he said.
To grow the workforce, Delay suggests as viable options increasing productivity and increasing labor force participation rates for the state’s fastest growing population – those over the age of 65.
Also important to consider when considering the decline in labor force participation rates is data that shows teenagers and young adults are becoming less attached to the labor force, which Delay said has been shown to be the result of a steady increase in the number of young people who seek post-secondary education and training.
Additionally, most young people who attend colleges in New Hampshire are from out of state. And most graduates tend to go back home, at least at first, according to Delay.
When people ages 25-34, who are most closely tied to the labor force, are seeking a place to live, they are increasingly moving to large, metropolitan areas, according to Delay, who reported that reasons college students gave for staying in New Hampshire after graduation included quality of life, proximity to family and friends, personal safety, cost of living, cost of housing, lack of sales/income tax, and proximity to natural resources.
“I think we still have the New Hampshire advantage, with a relatively low tax burden and high quality of life. We’re still a well-educated state,” Delay said. “But the differences between us and Massachusetts are a lot smaller now. The New Hampshire advantage has shrunk.”
Member Mary Soares said she has a more optimistic outlook for the state’s future.
“Looking at our town, we see things different than what you’re projecting,” she said. “I know you can only base your projections on history; but like the stock market, you can’t project future earnings.”
Delay said the only thing he would counter that with is that there has been almost no migration into the state in the last five years.
“We’ve also had no building in the state,” Soares said. “We’re seeing an increase in development, particularly here (in Londonderry), and I think that will make a difference in people coming to our town and into the state.”
In addition to the implications on the future labor force, New Hampshire’s aging population also raises concerns over housing.
Delay said most seniors age in place, but need low maintenance, smaller units that are easily accessible and feature wider entries and adapted kitchens and bathrooms. Seniors also seek housing that is accessible to public transportation.
“We will see an increase in people over the age of 65 who rent simply because there will be more of them,” he said.
And despite ongoing discussions about the lack of assisted living in Londonderry, Delay said the anticipated demand for assisted living is years away, with the population of seniors ages 65 to 74 expected to peak in 2030.
The number of seniors over the age of 65 who remain tied to the work force is rising, and that trend is expected to continue.
“Looking at the elderly population in New Hampshire, it probably won’t put a lot of pressure on the long-term care system initially. The biggest increase right now in the senior population is ages 65 to 74,” he said, noting the largest portion of the senior population is still “very capable of taking care of themselves and working.”