Why Is The Mass. Unemployment Rate Twice As High As N.H.'s?

At the Waterhouse Restaurant in southwestern New Hampshire, soft shell crabs were on the lunch menu and business was brisk.

But General Manager Linda Quintanilha said she can't fully re-open the restaurant in Peterborough because she can't find enough staff.

"Half the patio is closed and half the dining room is closed," Quintanilha said.

New Hampshire's unemployment rate stood at 2.9% in June, the third straight month it was below 3%. In May, it was the lowest in the country, and many businesses across the state are desperate to find workers.

But just across the border in Massachusetts, unemployment is more than twice as high — 6.1% in May, the latest month available. Though competition for workers is also keen in some industries and locations in Massachusetts, demand is much more uneven.

For instance, a survey this week by the American Hotel and Lodging Association found hotels in Boston are in an economic depression.

That means a lot more people like Caroline Sande of Boston are in need of work.

"It's really hard on me because I have my mortgage, and I have my car loan and I have my bills," said Sande, an immigrant from Kenya who lives in Hyde Park, where she cares for her elderly mother and 11-year-old son.

Sande is the family's sole bread winner, who depended on a full-time housekeeping job at the Boston Park Plaza Hotel. But the pandemic hit downtown hotels and other businesses that relied on conferences and foreign travelers especially hard. So her hours were cut way back — and now she's struggling.

"What I am ... getting from unemployment is peanuts," Sande said. "It's also my nightmare because I worry a lot about my mortgage. So, I'm stuck between a rock and stone. So, I am just leaving it to God."

As states climb out of pandemic-induced recessions, there are dramatic differences in unemployment rates across the country — even among states right next door to each other, like New Hampshire and Massachusetts.

Why the difference?

Some conservatives suggest it might be because Republican governors, including Sununu of New Hampshire, ended the $300 federal supplement for unemployed workers — while Massachusetts kept it.

But the unemployment gap between New Hampshire and Massachusetts existed well before Sununu cut off that benefit. So advocates and economists point to other explanations.

John Drew, chief executive officer of Action for Boston Community Development, a nonprofit that provides services to low-income residents, said New Hampshire doesn't have nearly as many new immigrants, who need skills and language training.

"They're just two different economies," Drew said.

Michael Goodman, an economist at the University of Massachusetts, Dartmouth, agreed: "Massachusetts is socially, economically, racially, ethnically more diverse than New Hampshire — and more densely populated than New Hampshire."

Goodman points out the pandemic hit immigrant, black and brown and working class communities the hardest — and that New Hampshire is much whiter and less urban.

This helps explain why rural states like Vermont, South Dakota, Kansas and Kentucky have relatively low unemployment rates, while states with larger urban centers, including California, New York, New Jersey, and Illinois, have some of the highest rates.

Goodman says another key factor is how hard states were hit by the pandemic.

"Massachusetts shut down quite early, quite comprehensively, with very few exceptions," he said.

Massachusetts was hit harder by the pandemic, particularly early on. By contrast, New Hampshire had a more relaxed approach to COVID restrictions and lifted them completely in March — nearly two months ahead of Massachusetts.

Now New Hampshire officials are bragging about their good fortune.

"There are tens of thousands of high-paying jobs across the state available today," New Hampshire Gov. Chris Sununu said recently in Concord. "New Hampshire continues to have one of the lowest unemployment rates in the country."

Before the pandemic, both New Hampshire and Massachusetts had similar unemployment rates, below 3%. Then as businesses and government offices shuttered, the unemployment rate soared to 16% in both states. But New Hampshire's rate has since fallen much more quickly, creating intense competition for workers across the state.

Harris Weldon, who owns two restaurants in Peterborough, is offering $250 bonuses to people who sign on to work in his kitchen, but he is still having trouble finding workers.

"We're competing with local manufacturers who are paying significantly more," Weldon said. "They're giving large bonuses, paying double time. It's been really challenging."

And a trucking company outside of Concord is offering qualified drivers $10,000 bonuses.

"I thought they accidentally put an extra zero on," said Richard Lavers, New Hampshire's deputy commissioner of employment security. "That gives you a sense of the desperation for that kind of worker."