Seeing as how New Hampshire’s in the news today, it’s worth looking at why the state’s economy — 5.2 percent unemployment, low poverty — has been chugging along nicely. Is it the lack of income tax? The lax regulations? Perhaps. But Michael Mandel makes the case that the public sector has played a vital role in keeping New Hampshire afloat:
But here’s a surprise: The "Live Free or Die" State, having lost much of its manufacturing base, seems to be thriving mostly on a steady diet of government spending and public jobs. For one, government employment in New Hampshire is up 14% since 2000, compared to 6% for the country as a whole. … What's more, real personal income growth in New Hampshire over the past decade has been driven almost entirely by government spending.
Interesting side note: Since 2001, according to a recent EPI study, New Hampshire has actually lost more manufacturing jobs as a share of its economy than any other state in the country — even Michigan. That hasn’t come up much in the campaign, though.
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