The Most Important Ideological Debate of 2013
It is hard to fix a problem that you don’t know you have. That seems to be the case in NH where I still hear “NH has fared better than most states since the recession.” I disagree and the U.S. Bureau of Labor Statistics is on my side. Just before Christmas the Bureau of Labor Statistics issued its monthly report on November employment and unemployment in the 50 states. Once again the news was not good for New Hampshire. Most media reports chose to report that NH’s unemployment rate dropped slightly during the month without noting that the number of jobs located in the state declined in November (John Nolan of the Foster’s Daily Democrat and Rochester Times was a notable exception).
Compared to employment in November 0f 2011, November 2012 employment in NH was lower by1,700 on a seasonally adjusted basis and lower by 2,500 on a not seasonally adjusted basis. Only five states have fewer jobs located in their state in November of 2012 than they had in November of 2011. As I have suggested before, NH’s job growth goes a long way toward explaining why the state’s housing market isn’t seeing the same recovery in prices that appears to be occurring in many other states.
I am hoping that in 2013 policymakers focus much of their debates (ideological or otherwise) on policies that strengthen the NH economy. I hope that most of those debates encourage the introduction of solid empirical evidence in support or opposition to any proposals (I tried last year but could not find any data or methodology to determine the impact that allowing pistol duels in the statehouse would have on job growth) and are absent the vitriol and ad hominems that characterized so many debates last year. Policies that can influence job growth can easily accommodate the needs of the two-party system to make the sort of ideological arguments and distinctions that they feel are needed to influence elections.
Whether job growth is slower now than in the past because employers are not willing to add additional workers (supply side arguments) or because they are not able to find enough or enough qualified workers (the human capital and “skills gap” argument) is among the most important issues to understand in setting both national and state-level economic policies. If employers are unwilling to add employees that are readily available, then the efforts to spur job growth focus more on factors affecting businesses (tax rates, regulations, costs etc.). If job growth is constrained because employers are unable to find enough or enough qualified workers to fill open positions, then the focus of efforts to spur job growth will be more effective if they look to influence demographic trends, increase the skills of the labor force, and/or better match the skills of workers to the needs of employers. In reality this is not an either or question because inadequate attention to the needs of either employers or the workforce will produce sub-optimal economic growth. I’ve tried in this blog to introduce some evidence related to the human capital argument for job growth trends and I will bring some supply side evidence in the future as well.
Ideological or not, respectful and civil or not, recent trends in NH’s job growth and the implications for future growth have to be the first and most important policy debate of 2013.