Northern New England’s low unemployment rate may not be as good as it seems.
An FKD Feature exclusive

Businesses in northern New England have been struggling to stay open because of an incredibly low unemployment rate, which made it hard for employers to attract workers.  

Failing businesses

Business owners in locations such as New Hampshire and Maine have had an extremely difficult time finding employees to fill job positions; even summer positions are difficult to fill. The problem is that there aren’t enough qualified people to fill the positions. Many business owners are becoming nervous because if they can’t find the workers they need to expand, then they will move elsewhere.

Losing businesses is never a good thing for a state, but fortunately people have discovered the root of the problem.

Leaving the workforce

New England’s three northern states, Vermont, New Hampshire and Maine, all have the highest median ages in the United States, which is 42. This means that people are quickly aging out of the workforce, which creates the challenge of filling the jobs left behind by those who have retired. The lack of population growth in these states also doesn’t help with the search for employees, and the struggle to find qualified workers could end up boosting wages and inflation.

Rural states that don’t have a dynamic similar to larger cities tend to have problems with low unemployment rates because of competition with the larger cities. A decreasing number of people available to fill job positions only pushes businesses away from these states, and many end up in larger cities where the business can thrive. This leaves rural states such as New Hampshire, Vermont and Maine struggling to stay afloat while big cities prosper.

While it is a tough situation to be in, there have been a number of proposals to help fix the issue.

Taking action

States have considered a number of actions to try to fix the issues that the low unemployment rate created. There have been programs created and proposed to help keep the population and number of job opportunities growing.

Maine decided to create a tax-incentive program several years ago attempting to keep college graduates in the state, and Vermont put a marketing plan in place last year to try to retain residents while attracting new ones. The Governor of New Hampshire even proposed a scholarship program to help students attend college and training programs in the state. The idea for a full-day kindergarten is also being pushed to attract workers with young families.

Takeaway

While everyone knows that a high unemployment rate needs to be avoided, a low unemployment rate can be bad for the economy and for entrepreneurship. States such as New Hampshire, Vermont and Maine are all racing to find ways to support the economic growth of the states, and hopefully their plans will allow for the low unemployment rates to level out.

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Header image: Getty Images

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Posted 05.03.2017 - 02:38 pm EDT