Why NH might make limited social drinking legal in some public places

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The American Prohibition Museum is not in Chicago, but tucked into an old brick building in Savannah, Ga., just off Congress Street. A $29.91 ticket to the museum comes with a drink at the adjacent speakeasy. In most American cities, that would be a perfect finish to a trip through the Prohibition era. Not in Savannah. The garnish on the cocktail is what you can do with that drink after it’s poured. 

Old fashioned or martini in hand, you can legally step outside and stroll through the historic district. Not even Elliot Ness can stop you.

Savannah allows outdoor drinking in its historic district, provided the drinks are in 16-oz. plastic cups. The city promotes this social perk. It’s an attraction for tourists, including Granite Staters who can pop down on a cheap flight. 

Like the rest of the original 13 colonies, New Hampshire has plenty of historic districts and beautiful downtowns. But it doesn’t have a single social district where outdoor drinking is allowed. 

That could change this year. 

Since the pandemic, unreasonable alcohol regulations have been lifted in states across the country. The changes helped boost local economies and keep bars and restaurants open. These deregulation efforts were so popular that states have looked for other laws to relax. The hottest trend is to allow local governments the option of creating social districts where drinking in public is allowed under certain tightly regulated conditions. 

Rep. Bill Boyd, R-Merrimack, has introduced House Bill 467 to let local governments create social districts in New Hampshire. Boyd modeled his bill on legislation that North Carolina passed in 2021.

Before North Carolina adopted its social district law, the foothills city of Hickory was working to attract more business to its downtown core by legalizing outdoor drinking just in that zone. In 2019, the city applied for and got what was called a common area entertainment permit. It was not quite what city leaders had in mind.

The city had to get a state liquor license, which meant that city staff had to pass background checks and get fingerprinted. The city had to be the license holder. When the city hosted its own events, drinking was restricted to the roped-off footprint of the event space. 

This tiny alcohol containment zone reduced the economic benefits of the event. The whole point was to draw people downtown to patronize businesses. But because people couldn’t carry their drinks across the square, they’d often stay in the roped-off area the entire time, then go home, city Business Development Director Dave Leonetti said in an interview.  

After the social district law passed, Hickory created one for its downtown in 2023. Traffic to the downtown core is up 16.8 percent over the last three years, Leonetti said. The social district has helped turn downtown into a regional magnet for shoppers and diners. 

With the social district, people come downtown to hang out, not just to shop. Locals come just to sit outside and play cards or meet friends and pop into local shops and restaurants. The creation of the social district itself has changed the way people interact with the downtown area. It’s increased foot traffic, sociability and business. 

In fact, business activity is expanding beyond the old downtown district. Restaurants have opened in warehouse buildings just outside of the traditional business area, increasing economic activity and tax revenue for the city.

“It’s been a great boon for downtown,” Leonetti said.

And the city has seen no increase in trash or crime downtown since the district’s creation, according to Leonetti. 

A few hours up I-40, Raleigh’s nightlife and entertainment district attracts a lot of visitors. But city leaders wanted more foot traffic in its downtown core. So the city created a social district there, like Hickory did. 

The Raleigh Downtown Alliance did a survey to gauge the popularity of the social district. Rachel Bain, hospitality and nightlife planner for the City of Raleigh, said “it was the best survey response they’d ever received. It got a higher rating than the Christmas tree lighting.”

The social district has helped to increase in foot traffic and business to the downtown, but it’s led to no increase in crime, intoxication or littering, Bain said.

At least eight states have adopted statutes allowing municipalities to create districts where it’s legal to drink alcoholic beverages in public spaces. The laws typically restrict open containers to materials other than glass, usually plastic cups. Stickers or other labels are required, and drink limits are enforced. Drinks cannot be carried outside of social district boundaries, which are marked with prominent signs. Maps of the district boundaries are posted online, and businesses can decide whether they allow customers to enter with outside drinks. 

Concerns about trash and public intoxication have not materialized, Leonetti said, because the regulations discourage both and the crowd that is attracted to a social district is not the crowd that wants to stumble down Bourbon Street at 3 a.m. 

“Before the social district, it was illegal to brown bag your bottle of liquor, to throw everything in a Yeti cup, to be drunk in public,” he said. “All of those things that were illegal are still illegal. This just gives the people who want to follow the rules a way to do it.”

Among the rules that municipalities get to set are drinking hours. Raleigh sets hours from 10 a.m. to 10 p.m. so they’re consistent every day and they cover Sunday brunch. Raleigh also excludes city parks from its district.

Michigan adopted a social district law in 2020. The Detroit News reported last August that municipalities have adopted 128 social districts, inducing 27 in Detroit alone. Detroit’s social districts were part of the appeal when the city hosted the NFL draft last year.

“Business owners inside several districts said they’ve seen nothing but positive effects, and it has encouraged new customers to come to their communities, serve patrons even when their dining rooms are full and encourage people to stay awhile,” the newspaper reported. “Some said these districts are even playing a role in revitalizing downtowns that may not have gotten as much foot traffic before.”

In Clawson, Michigan, officials credit the social district with reviving their downtown.

“Eight years ago, you might not see anybody walking downtown,” Joan Horton, director of Claswson’s downtown development authority, told the News. “People drove through Clawson to get somewhere else. But now we’re a drive-to destination. We really have become a dining mecca.”

HB 467 would enable New Hampshire municipalities to use social districts as targeted economic development tools. No New England state has a social district law. But Boston officials last year began discussing social districts for the city. 

That puts New Hampshire lawmakers in the position of deciding in coming weeks whether they want New Hampshire or Massachusetts to become the first New England state to notch another small win for personal and economic freedom by legalizing small districts where responsible adults can be trusted to drink and socialize like responsible adults. 

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Right-to-work facts vs. myths

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Most U.S. states (26) have a right-to-work law. They’ve proven effective at expanding worker freedom and improving state economies, which has made them popular across most of the country. But they have yet to expand into the Northeast, which now has lower economic growth than the South. If New Hampshire becomes the 27th state to adopt a right-to-work law, and the only one in the entire Northeast, the state instantly would become more attractive to manufacturers, many of whom won’t even consider opening a shop in a state without a right-to-work law. 

Though New Hampshire prides itself on being a pro-business, pro-growth state, especially relative to its neighbors, it has yet to adopt a right-to-work law. The biggest obstacle has long been a widespread belief in several myths about right-to-work laws. This briefing paper explains why those myths are untrue. 

Myth 1. Right-to-work laws are anti-freedom

Labor leaders claim that the existing legal framework governing organized labor is the organic outgrowth of the free market. The current rules represent freedom, and a right-to-work law, they say, equals “government interference in the private sector of the free market.”

This is Orwellian doublespeak. The National Labor Relations Act (NLRA), which mandates that a certified labor union be the sole representative for all employees in a collective bargaining unit, is hardly the free market at work. It is by definition government interference in the private sector. Union leaders claim simultaneously that this arrangement equals “freedom” and that they are burdened by a federal mandate to represent all workers regardless of union membership. One of those could be true, or neither could be true. But both can’t be true. 

In reality, the NLRA imposes a legal framework that favors unions over workers by allowing labor contracts that compel non-members against their will to contribute financially to unions. The law used to allow contracts to force non-members to pay full union dues. Unions claimed that even their political spending was essential and therefore non-members should be forced to fund it. In Communication Workers of America v. Beck (1988), the Supreme Court held that compelling non-members to pay full union dues violated their First Amendment rights. Since then, private sector union contracts have been allowed to collect from non-members only the fees directly related to collective bargaining and representation. 

But this too is a violation of an individual’s First Amendment rights to free association and free speech. Unions negotiate benefits all the time that individual workers might not want, or that might even harm them. A contract that increases pension benefits at the expense of higher wages hurts young workers who don’t intend to spend a career at that employer. Non-members must pay for these negotiations, even if they disagree with the union position. That’s a plain First Amendment violation. 

If union leaders really wanted workplace contracts to be free from government intervention, they’d advocate abolishing the NLRA. They don’t because the NLRA is a government intervention that restricts worker freedom to the benefit of labor unions. 

Right-to-work laws are a corrective to this. They restore workers’ rights to not associate with an organization that they don’t want to support. In right-to-work states, unions cannot forcibly take money from non-members. To get that money, they have to persuade non-members to join. Persuasion is how free people exchange goods and services in a free economy. Coercion is the opposite.  

Myth 2. Right-to-work laws create freeloaders

We addressed this claim in January. Union leaders claim that their negotiations and representation are behaviors that only benefit non-member workers. This is demonstrably untrue. Union leaders negotiate contracts or take positions in labor disputes that do not always benefit their own members, much less non-members.

Giving up your right to bargain on your own behalf means sacrificing your autonomy as an employee. By handing those powers to union leadership, a worker trades independence for dependence. His compensation is no longer determined by his own individual performance, but by his status as a member of a larger group. That tradeoff can make one better off. Or it can backfire. 

Union contracts that favor seniority over merit disadvantage young, ambitious workers, for example. 

A 2024 Ford Motor Co. survey found that only 33% of American Baby Boomers would take a 20% pay cut in exchange for a better quality of life, but 60% of Millennials would. A young employee who would gladly exchange a lower wage for more flexible hours is made worse off by a union contract that makes the opposite trade. 

In 2009, Gov. John Lynch had to cut $25 million in labor costs from the state budget. He offered rotating furloughs to workers so no one would have to be fired. The State Employees Association said no, choosing layoffs instead. The governor laid off 250 state employees. They clearly were made worse off by the union leadership’s inept negotiations.

Far from creating freeloaders, right-to-work laws restore a measure of financial autonomy to workers. Unions in right-to-work states can no longer behave as monopoly providers, but must convince non-members to join. That changes their behavior and makes them more responsive to the needs and preferences of all members of a bargaining unit. Introducing this market incentive is the only way to improve the percentage of workers who will actually benefit from union representation.

Myth 3. Right-to-work laws would hurt the state economy

Union leaders claim that right-to-work laws are economically harmful. The exact opposite is true.

A 1997 University of Minnesota study found “a large, abrupt increase in manufacturing activity” associated with the adoption of right-to-work laws. “Manufacturing employment in the states without right-to-work laws is virtually the same today as it was in 1947,” the study found. “In the right-to-work states, manufacturing employment has increased 150 percent.”

A 2013 Mackinac Center for Public Policy study found that right-to-work laws increased average real personal income growth, average annual population growth and average annual employment growth. 

A 2023 Federal Reserve study found that right-to-work laws were associated with increases in job openings and employment. 

A 2021 Harvard University study found that right-to-work laws increased employment to population ratios (the percentage of the working-age population who are employed), increased manufacturing employment (by 28%), increased total employment, increased labor force participation, reduced poverty (especially childhood poverty), increased upward mobility and reduced long-term joblessness.

Were New Hampshire to become the only right-to-work state in the Northeast, the economic literature suggests that we would reap measurable economic benefits, including a significant increase in manufacturing employment.

Myth 4. Right-to-work laws are about “union busting”

Labor leaders claim that the real motive behind right-to-work laws is to destroy unions. But why would letting people choose where to spend their own money destroy the institution that currently takes their money involuntarily?

That could happen only if nearly everyone flees labor unions as soon as they get the chance. Why would they do this if those institutions offer the level of value that their proponents claim? Obviously, they wouldn’t. And we have plenty of evidence that this doesn’t happen.

Union membership has been shown to decline initially after adoption of a right-to-work law. This suggests that a lot of workers think that the benefits of membership aren’t worth the costs. Unions can address this by competing harder for members. 

The 2018 U.S. Supreme Court decision in Janus v. AFSCME made compulsory agency fees illegal in the public sector. With right-to-work implemented across all government workplaces in the country seven years ago, we have a national test case. Though public sector union membership declined, the unions have not disappeared. Some, including the State Employees Association of New Hampshire, have made changes to attract new members and have successfully negotiated large pay increases.

Neither the goal nor the effect of right-to-work laws is to destroy unions. The goal is to restore the individual worker’s constitutional right to free association and free expression. The effect, demonstrated through decades of research, is to create more employment, particularly in manufacturing, and generate more economic growth.

Myth 5. Right-to-work laws are unpopular

Labor leaders have a neat trick to make politicians think their anti-right-to-work position is popular. At public hearings on right-to-work bills, they pack the room with union members, giving the impression that the public opposes right-to-work. But when the issue is polled, a very different result emerges.

We polled this issue in 2021. We asked New Hampshire voters whether they would “be in favor of changing the law so that employees who don’t want to join a union could choose not to pay union fees.” More than 2/3 of voters (68%) said they favored a right-to-work law. Even among Democrats, more favored than opposed right-to-work (44%-41%). Republicans broke in favor of right-to-work by a margin of 88%-6%, and unaffiliated voters favored it by a margin of 73%-18%.

Right-to-work support in N.H.

All voters: 68% support, 22% oppose

Republicans: 88% support, 6% oppose

Democrats: 44% support, 41% oppose

Independents: 73% support, 18% oppose

Those are overwhelming numbers in favor of right-to-work. Nationally the figures are even better. Last year, the National Right to Work Foundation polled registered voters on this question: “Do you agree or disagree with the following statement: Workers should never be forced to join a union or pay dues to a union as a condition of employment.” Voters favored right-to-work by 82%-10%. Republicans favored it by 86%-8%, Independents by 80%-6%, and Democrats by 76%-14%. 

Right-to-work support nationally

All voters: 82% support, 10% oppose

Republicans: 86% support, 6% oppose

Democrats: 76% support, 14% oppose

Independents: 80% support, 6% oppose

Far from being a political liability, support for right-to-work legislation puts lawmakers on the side of supermajorities of voters.  

Conclusion

Right-to-work laws have been studied for decades. Research shows mixed results on some points, clear results on others. What’s become evident over the decades is that right-to-work laws are associated with statistically significant gains in employment, particularly manufacturing employment, job opportunities, population growth and economic growth. If New Hampshire adopts a right-to-work law, we would expect to see improvements in all of those areas, along with an improvement in state business tax revenues resulting from the additional business activity.

As for freedom vs. coercion, workers have First Amendment rights not to associate with or fund membership organizations that they choose not to join. If workers want to join unions, they should be free to do so. Preferably, they would have the option of joining more than one union (something that current federal law makes difficult). Right-to-work laws create freedom, not freeloaders. And for that reason, they are extremely popular, which is why they have been adopted in a majority of U.S. states. New Hampshire’s economy, and its workers, would benefit if the Granite State becomes the 27th state to protect workers’ First Amendment rights by adopting a right-to-work law.

Download this policy brief here: JBC Brief RTW Facts vs. Myths.

 

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The right-to-work freeloader fallacy

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Labor unions negotiate benefits on behalf of all employees of a collective bargaining unit, not just their own members, unions say. Since non-members receive the benefits, they should be compelled to pay the union for negotiating them. 

Because right-to-work laws forbid non-union employees from being compelled as a condition of employment to pay any portion of their wages to a labor union or a union’s third party affiliate, they turn non-members into freeloaders, unions say.

At a public hearing on Wednesday, opponents of House Bill 238, this year’s right-to-work bill, made liberal use of this freeloader fallacy.

The freeloader argument has three parts.

  1. Unions are required by federal law to represent non-members.
  2. Non-members benefit from union representation itself.
  3. Non-members benefit from the results of union representation.

Piling fallacy atop fallacy

Several speakers at Wednesday’s hearing used the American Automobile Association (AAA) as an analogy. 

Imagine that a driver who never joined AAA gets in an accident, then calls AAA for roadside assistance. AAA would rightly refuse the request. Right-to-work laws do the equivalent of making AAA provide assistance to non-members, they claimed.

In defending one fallacy, these speakers committed another, the false equivalence fallacy.

First, AAA is nothing like a union. If AAA worked like a union, instead of sending you a tow truck, it would send you a lawyer to negotiate with a towing company. 

Further, under federal law, if a majority of a bargaining unit’s employees vote to form a union, that union represents all employees. (Which is what unions want.)

AAA enjoys no such monopoly status. It sells memberships in the open marketplace. 

There are two ways the AAA analogy could work. 

AAA could make these five changes:

  1. Unionize licensed drivers.
  2. Obtain federal certification as the only provider allowed to negotiate benefits for all drivers.
  3. Secure agreements with a third party to provide those benefits.
  4. Let only members vote on the benefits packages the third party will offer.
  5. Obtain authorization to charge non-members for these negotiation services.

The other option is for unions to operate like AAA. They could do this in three steps:

  1. Forego federal certification, thus opening their workplaces to other unions.
  2. Provide benefits (such as insurance, paid leave, etc.) to their members, rather than negotiating for employers to provide them. 
  3. Compete against other unions on price and quality to attract more members.

Tellingly, unions do not want option two. 

Who benefits from the benefits?

Unions claim that right-to-work is unfair because all employees enjoy the benefits of union representation. 

These benefits fall into two categories: 1. The compensation packages unions negotiate, and 2. Union representation itself.

Representation

Putting your workplace negotiations in the hands of a third party involves a great deal of trust. It also means sacrificing your autonomy as an employee. Your compensation is no longer dependent on your performance, but on your group status.

That tradeoff can make one better off. Or it can backfire. Union representation isn’t always in the best interests of a union’s own members, much less non-members.

In 2009, Gov. John Lynch had to cut $25 million in labor costs from the state budget. He offered rotating furloughs to workers so no one would have to be fired. The State Employees Association said no, choosing layoffs instead. The governor laid off 250 state employees. They clearly were made worse off by the union leadership’s inept negotiations.

Union contracts that favor seniority over merit disadvantage young, ambitious workers, making it harder for them to advance up the career ladder.

Benefits

Even if workers don’t like the idea of being represented in this way, unions say they are made better off by the compensation packages negotiated on their behalf, so they still must pay for the representation they don’t want. But that argument also fails on closer examination.     

During Wednesday’s hearing, Rep. Daniel LeClerc, D-Amherst, made the case that unions negotiate better benefits for employees. His own union benefits include no employee share for health insurance, he said. Because his employer covers the entire expense, he gets health insurance at no cost to him.

That might be a great deal for Rep. LeClerc. But of course he does pay for that insurance coverage. Instead of higher wages, he receives a larger portion of his compensation in the form of health insurance coverage. 

Health benefits aren’t bonus compensation. They’re a trade of cash for coverage. Employees pay for benefits by receiving lower wages than they otherwise would receive.

In the United States, private sector employees on average receive 70% of their compensation in wages and 30% in benefits, according to the Bureau of Labor Statistics.

In manufacturing, the breakdown is 66.5% wages and 35.5% benefits.

The government classifies all of this as compensation. So do employers.

Union-negotiated compensation packages are not “freebies” given to employees by a union. They are compensation packages negotiated between union representatives and employers. And those packages favor some employees over others. 

Benefits preferences vary by age, marital status, sex and other factors. Those preferences can be highly personal. 

A 2024 Ford Motor Co. survey found that only 33% of American Baby Boomers would take a 20% pay cut in exchange for a better quality of life, but 60% of Millennials would.

A young employee who would gladly exchange a lower wage for more flexible hours is made worse off by a union contract that makes the opposite trade. 

When union leaders, who tend to be older, negotiate a package heavy on pension contributions that require a decade to vest, younger workers who intend to stay for fewer than 10 years are harmed. 

Gen. Z Americans stay in a job for about 1/4 as long as Baby Boomers do. 

Because federal law gives a certified union monopoly status as the exclusive bargaining agent for employees, the individual employee is stuck with whatever package the union leadership negotiated.

Unions suggest that the choice is between benefits and no benefits. It’s not. It’s between one discrete package vs. any number of other possible packages. 

Many employees who give up their autonomy to a union might well be better off in the long run. But not all of them will be. In a free country, no one should be made to trade his workplace autonomy for collective representation.

Forced representation

That tradeoff is the issue. Unions claim that they make all workers better off. This is demonstrably untrue. Some workers are made worse off by losing their workplace autonomy. 

Unions say they are required by federal law to represent non-members. But they sought that law. And it applies only if they pursue and accept National Labor Relations Board certification as the exclusive collective bargaining representative for a bargaining unit. That is, only if they seek and accept government designation as a monopoly provider.

Unions could request decertification and represent only their members. They could further seek to change federal law if they see it as such a burden.

But that would put an end to collecting fees from non-members who would stop paying those fees if given the choice. 

Far from creating freeloaders, right-to-work laws restore a measure of financial autonomy to workers. Unions in right-to-work states can no longer behave as monopoly providers, but must convince non-members to join. That changes their behavior and makes them more responsive to the needs and preferences of all members of a bargaining unit.

Introducing this market incentive is the only way to improve the percentage of workers who will actually benefit from union representation.

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Residents continue to flee Massachusetts (primarily to N.H.)

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People have always relocated between New Hampshire and Massachusetts, for a variety of reasons. But the flow from Massachusetts into New Hampshire is larger than the outflow, and it has been increasing, an analysis from the Pioneer Institute in Boston shows. 

From 2010-2023, New Hampshire gained a net total of 98,879 immigrants from Massachusetts, nearly enough to create another city the size of Manchester. (These figures exclude the pandemic year of 2020.)

Florida was the No. 2 destination for Bay Staters during those years, with the Sunshine State gaining a net 90,372 new residents from Massachusetts.

“In 2023 an estimated 184,534 individuals over a year old left Massachusetts for other states while 145,021 relocated here from other states. That means that on net the Commonwealth lost 39,513 domestic residents,” the Pioneer Institute’s debut Mapping Mass Migration newsletter shows.

“Net out-migration remains elevated, with Massachusetts losing more domestic residents each year from 2021 to 2023 than it did in 2019 (no ACS data is available for 2020). In total, net out-migration has increased exponentially over the last decade; out-migration levels were 10 times greater in 2023 than they were in 2010.”

The Mass. exodus is costing the state billions. 

“Massachusetts lost $10.6 billion in adjusted gross income (AGI) to net out-migration between 2020 and 2022, more in those three years alone than the $10 billion it lost from 2012 to 2019,” a separate Pioneer Institute study in November concluded.

“In all, the Commonwealth experienced a four-fold increase in AGI loss from 2012 to 2022,” the study found. “The net loss of taxpayers followed a similar pattern, rising from just over 6,000 in 2012 to more than 26,000 in 2022.”

A University of New Hampshire analysis found that from July of 2023 to July 0f 2024, Massachusetts, Connecticut and Rhode Island lost more U.S. residents than they gained, but mitigated those losses with “a substantial influx of immigrants.” 

In Massachusetts and Connecticut, “immigration provided over 90 percent of their substantial population gain. In Rhode Island, immigration produced the entire population gain,” the UNH Carsey School of Public Policy analysis concluded.

The Pioneer Institute analysis also noted Massachusetts’ foreign immigrant boom.

“While Census Bureau population estimates show an increase of 18,481 people in 2023, that was largely thanks to an influx of 50,000 new foreign immigrants. Without them the state would have lost significant population,” Pioneer noted.

New Hampshire and Maine were the only New England states to have more domestic in-migration than out-migration from July of 2023 to July of 2024, and the only ones to have more domestic than foreign in-migration, the UNH analysis showed.

The cost of living in Massachusetts is a major factor in the state’s population loss, and New Hampshire’s comparatively lower cost of living is a major factor in our state’s attractiveness.

“To make Massachusetts more competitive and attractive to current and potential residents and employers, Massachusetts needs to do more to lower its overall cost structure. Affordability solutions from growing the housing supply, easing tax burdens, and improving public transportation must be considered,” the Pioneer Institute’s December analysis concluded.

Likewise, finding ways to further lower the cost structure in New Hampshire would help keep the state competitive and potentially reduce the outflow of younger adult residents. 

That’s why regulatory reforms that allow for more residential and commercial development, more educational competition, and more occupational freedom (including right-to-work and reduced licensing requirements) are so important, along with lowering energy costs.

Lightening regulatory burdens and expanding market competition are proven ways to lower costs and improve service quality, both of which would make the state more attractive to employers and our own young people.

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New Hampshire could boost manufacturing jobs with one simple trick: becoming a right-to-work state

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Reviving American manufacturing is a hot topic in the nation and New Hampshire once again. A new Department of Business and Economic Affairs report on the state’s advanced manufacturing sector has drawn attention to that field’s recent growth here (well above the New England average) as well as its economic benefits (tens of thousands of jobs, billions in economic output).

Policymakers hoping to help specific industries tend to suggest protectionist measures (such as tariffs). But with manufacturing, as with the economy as a whole, recent research shows that enhancing individual freedom by repealing protectionist regulations is a more effective way to stimulate significant job growth. 

To create a surge in domestic manufacturing jobs, all a state has to do is pass a right-to-work law. 

Right-to-work laws do not prohibit unionization or collective bargaining. Unions remain perfectly legal and capable of organizing and bargaining for their members in right-to-work states. The laws simply prohibit employers from transferring any portion of non-union workers’ pay to unions without the workers’ consent. 

Several recent studies have found that the adoption of right-to-work laws causes a significant increase in manufacturing jobs. 

  • A 2021 Harvard University study found that the adoption of a right-to-work law led to a 28% increase in manufacturing jobs in counties that bordered a state without a right-to-work law. Moreover, those jobs were net gains, not substitutions. Right-to-work counties had employment-to-population ratios 3.51 percentage points higher than their neighbors over the border. The researchers also found that the newly right-to-work counties experienced increased levels of in-bound commuting from over the border. For New Hampshire, that would mean fewer people commuting to Massachusetts for work and more people commuting from Massachusetts into New Hampshire. 
  • “Job creation in industrial sectors such as manufacturing especially improves under Right-to-Work laws,” a 2015 Illinois Policy study showed. “Since Indiana passed its Right-to-Work law, Hoosier manufacturing jobs increased by 44,500, while Illinois lost 8,300 manufacturing jobs in the same time period. And Michigan added 46,900 manufacturing jobs since it enacted Right to Work, while Illinois lost 10,900 factory jobs during that time.”

New Hampshire had 70,000 manufacturing jobs as of 2022. A 20-28% increase in manufacturing employment triggered by adoption of a right-to-work law (the range between the Mackinac Center and Harvard studies) would mean the addition of between 14,000-19,600 new manufacturing jobs in New Hampshire. 

If we cut those estimated effects in half, that still would represent 7,000-9,800 jobs. For comparison, the population of Litchfield is about 8,500. 

If New Hampshire policymakers want to improve the state’s manufacturing sector without spending a dime of taxpayer money, there’s a very simple way to do it. Pass a right-to-work law. 

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New Hampshire ranked the freest state in North America for the 23rd year

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New Hampshire is once again the freest state both in the United States and on the North American continent, topping each index in this year’s Economic Freedom of North America report, released today by the Josiah Bartlett Center for Public Policy in conjunction with Canada’s Fraser Institute.

“Granite Staters continue to choose policies that empower people, not government. When you do that for a very long time, you wind up freer than your neighbors,” said Andrew Cline, president of the Josiah Bartlett Center for Public Policy, which partnered with the Fraser Institute in releasing the report. “In 2025, legislators have a tremendous opportunity to build on this success and liberate Granite Staters from some of the outdated policies that keep us from being even freer.”

Since the Fraser Institute began publishing its Economic Freedom of North America Index two decades ago, the Granite State has ranked No. 1 in 23 of the 26 years studied in the international freedom index. It has ranked No. 1 in 23 of the 42 years covered in the U.S. freedom index.

New Hampshire Gov. Chris Sununu said that notching another first place win shows that New Hampshire’s approach to governing works.

“The model we’ve set here in New Hampshire isn’t just the gold standard for the 50 states, it’s the envy of all North America! The New Hampshire Advantage is more than just a slogan — it’s proof that freedom stems from creating opportunity for the individual without big government,” Sununu said.

This year—the 20th year that the Economic Freedom of North America index has been published—New Hampshire is again the freest state among all U.S. states, having scored 8.12 out of 10 in this year’s report, which measures government spending, taxation, regulations and labor market restrictions using data from 2022, the most recent year of available comparable data.

“In the freest economies, individuals are allowed to make more of their own economic choices—choices concerning work, transactions with others, and owning and using productive property. As government limits these choices, people have less economic freedom and as a result they tend to be worse off,” said Matthew Mitchell, a senior fellow at the Fraser Institute and co-author of the report.

Rounding out the top five freest states are South Dakota (2nd), Florida (3rd), Tennessee (4th), and Texas (5th).

Once again, Puerto Rico came in last among U.S. jurisdictions with a score of 2.13 out of 10. The least free U.S. states were New York (50th), California (49th), Hawaii (48th), New Mexico (47th) and Vermont (46th).

Among the remaining New England states, Massachusetts ranked 28th, Connecticut 29th, Maine 38th, Rhode Island 42nd, and Vermont 46th, making New Hampshire at No. 1 the only New England state to rank in the top half of states for economic freedom.

The report also includes an all-government ranking, which adds federal government policy to the index and includes the 50 U.S. states and the territory of Puerto Rico, 32 Mexican states, and 10 Canadian provinces.

Taking into account both federal and state policies, economic freedom peaked in 2004 then declined and bottomed out in 2009. From 2009 to 2017, economic freedom in North America slowly increased, but has remained more than a quar­ter-point below its 2004 peak ever since. In fact, average economic freedom across all 93 jurisdictions in the index has fallen every year since 2017 and is now only 0.02 points above its all-time low.

And even though the U.S. remains more economically free than Canada, the gap is relatively small.

“The evidence is clear—higher levels of economic freedom are associated with more prosperity, faster economic growth, more investment, and more job opportunities,” said Dean Stansel, economist and research associate professor at Southern Methodist University and co-author of the report. According to the report, total employment grew about three times faster in the most economically free U.S. states than it did in the least free over the last decade.

The Economic Freedom of North America report is co-authored by José Torra, the head of research at the Mexico City-based Caminos de la Libertad, and Ángel Carrión-Tavárez, director of research and policy at the Instituto de Libertad Económica in Puerto Rico. It is an offshoot of the Fraser Institute’s Economic Freedom of the World index, the result of more than a quarter century of work by more than 60 scholars, including three Nobel laureates.

See the full report at https://efotw.org and fraserinstitute.org/studies/economic-freedom.

New Hampshire’s scores in key components of economic freedom (from 1 to 10 where a higher value indicates a higher level of economic freedom), from 2021 to 2022:

  • Government spending: Unchanged, at 8.84 both years
  • Taxes: changed to 7.47 from 7.18
  • Labor Market Freedom: changed to 8.34 from 7.93

Read the entire report here: us-economic-freedom-of-north-america-2024

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Freedom’s just another word for everything to lose

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Among his many memorable contributions to American arts, the great singer-songwriter Kris Kristofferson, who passed away in September, wrote one of the most quotable lines in rock history.

“Freedom’s just another word for nothing left to lose.”

It’s a fabulous drifter anthem. 

It’s also entirely wrong. 

Part of the American political left at the time was infused with a hippie ethos that disdained possessions and social connections. Freedom to them meant getting “back to the garden,” to quote another anthem of the era. 

They should’ve read fewer radical poets and more Enlightenment philosophers.

Ancient humans had “nothing left to lose” in the sense that they had few possessions. Life was a pretty big thing to lose, though, and life in a state of nature was not exactly full of lattes and free health care. If you were lucky enough to survive childhood, you still had to escape war, pestilence, famine, all the Old Testament stuff.  You were only free until someone more powerful came along and subjugated you. And then there were no U.S. Marines to come to the rescue.  

For most of human history, either chaos or subjugation was the rule for most of humanity. Humans spent millennia poor and unfree. 

The development of democratic governments along with institutions that decentralized power and incentivized innovation and upward mobility changed everything. 

When humans replaced extractive institutions dominated by elites for inclusive institutions that empowered outsiders, as MIT economist Daron Acemoglu concisely frames it, an unprecedented era of human flourishing began.

In 1820, 75% of the world’s population lived in extreme poverty, as the chart below from Our World In Data shows. By 2018, only 11% did. 

“For most of human history, life expectancy has been short – perhaps 25 years for our hunter-gatherer ancestors and only 37 years for residents of England in 1700,” a paper by Harvard, Princeton and UCLA researchers in 2011 determined. “Dramatic changes began in the 18th century, with life expectancy in England rising to 41 years by 1820, 50 years by the early 20th century, and 77 years today.”

In the past 13 years, life expectancy in England has risen to 80.

Economic growth more than tripled human life expectancy and has nearly eradicated extreme poverty.

“Economic growth made it possible to leave the widespread extreme poverty of the past behind,” Oxford University professor Max Roser writes. “It made the difference between a society in which the majority were lacking even the most basic goods and services – food, decent housing and clothes, healthcare, public infrastructure and transport – and a society in which these products are widely available.”

What economist Dierdre McCloskey calls “the great enrichment” was driven by a surge in economic growth, but what drives economic growth? 

Acemoglu notes that short bursts of economic growth have occurred under authoritarian regimes throughout history. But, like the people, they were short-lived. Why?

“Authoritarian systems often rely on some amount of repression, because they seek to maintain an unequal distribution of political power and economic benefits. They also adopt economic institutions and policies that protect incumbents and create rents for those who hold political power,” he wrote in his epilogue to Introduction to Modern Economic Growth.

He found that “a distinguishing feature of growth under authoritarian institutions is that it protects the interests of the current elite. So in the final analysis, growth must always rely on existing techniques and production relationships. It will not unleash the process of creative destruction and the entry of new talent and new businesses necessary to carry a nation to the state of sustained growth.”

The entry of new talent and new business (and new ideas) is crucial for raising living standards and for maximizing individual autonomy (freedom). 

Institutions and policies that seek to protect insiders by suppressing competition, innovation and freedom of individual action hurt economic growth by curtailing freedom and thus limiting opportunity for outsiders. 

Democracy alone does not protect against such collusion by insiders. Even in democratic regimes, special interests pressure ruling authorities for protections against outsiders. 

Such protections remain woven into American and New Hampshire laws even today. 

From tariffs and confiscatory tax rates at the national level to occupational and business regulations at the state level to housing restrictions and food truck bans at the local level, regulation and taxation continue to slow economic growth and reduce opportunities for average folks. 

Building an inclusive, prosperous society requires reducing the barriers that insiders erect to protect their own power and status from being challenged by outsiders. 

When insiders collude with government to extract resources from an unfavored group or to protect favored groups from competition or innovation, freedom, opportunity and prosperity are diminished.

The Josiah Bartlett Center for Public Policy advocates for expanding free markets and limiting government coercion because these are proven methods of maximizing freedom, opportunity and prosperity for all Granite Staters. 

Government maximizes freedom not by redistributing wealth after its creation, but by supporting institutions and policies that lift restraints on individual economic autonomy, thus empowering all citizens regardless of social, political or economic status to pursue happiness on their own terms (providing they don’t harm others). 

Such inclusive institutions maximize individual freedom, incentivize innovation and stimulate growth and prosperity. 

Free markets and limited, inclusive government generate maximum amounts of widely shared prosperity by unleashing the full measure of human potential.

It’s no accident that the “live free or die” state is rated No. 1 in economic freedom in North America and has the nation’s lowest poverty rate. 

It’s no accident that New Hampshire has enjoyed historically higher economic growth than Vermont or Maine, and thus has higher household and per-capita income, despite sharing similar geographic and demographic characteristics. 

Free markets and limited, inclusive government make everyone freer and more prosperous.

Freedom is the foundation of sustainable prosperity.

Or to put it another way, freedom’s just another word for everything to lose.

Lose freedom, and all of our modern prosperity collapses.

Acemoglu documents this collapse in numerous authoritarian regimes of the past. People would win a little freedom, which would cause a spurt of growth, which challenged established elites, who responded by restricting freedom, which ended the growth.

From the Mayans to the Romans to the Soviets, the cycle was repeated.

Lose freedom, lose prosperity.

That’s why the Josiah Bartlett Center fights for policies that expand economic freedom. 

If you’d like to help us raise living standards and create greater opportunities for all Granite Staters, you can make a contribution online here. It’s an investment in a freer, more prosperous New Hampshire for everyone.

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New Hampshire can’t thrive as a Hallmark movie set

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Speaking at an event in Portsmouth this month, economist Ali Wolf dropped a stunning statistic. Rents in the United States have risen by an average of 25% since the pandemic—but in New Hampshire they’ve risen by 45%.

Consider the news a follow-up to last July’s revelation that New Hampshire rents rose at double the rate of the prior year, even as rents fell nationwide.

New Hampshire, which is exceptionally hostile to new housing construction, is experiencing exceptionally high rent and home price growth. Go figure!

So, we’re fixing this problem by approving more and more residential units each year, right?

Right?

Well, according to U.S. Census data, the number of new building permits issued in New Hampshire in 2023 was below the number issued in 2022. And that number was down from 2021.

With demand for housing surging, the rate of new construction is slowing. 

This is not good. And it’s hurting the state’s economy and overall quality of life. But too many people can’t see this because the commercial side of the economy looks so healthy.

Last year, New Hampshire passed 100,000 corporate and LLC annual reports filed, setting a new record. And new business applications were up 10% in December of 2023 vs. December of 2022, according to the Small Business Administration.

New business creations are growing, which is a sign of a strong economy. But when only one side of the economy is healthy, it’s at risk from the unhealthy side.

In New Hampshire, there’s a disconnect between the way people think about business growth and the way they think about population growth. Some people (and many town officials) want one, but not the other.

To illustrate the point, consider small businesses that are very popular right now, such as coffee shops, craft breweries and neighborhood pubs. People love them because they create a sense of community. They’re a “third place,” a spot between work and home where people can socialize.

Coffee shops are more than just fun, though. They’re famous for being incubators of economic activity and hubs of information sharing. The London Stock Exchange was created in Jonathan’s Coffee House, located in Exchange Alley in the old City of London. The New York Stock Exchange also first met in Totine Coffee House on Wall Street.

People love coffee shops, which is why local governments are happy to approve new ones. Who protests the permitting of a new coffee house?

When towns approve coffee shops, they do a lot more than give people a cozy place to hang out. They might also be creating other new businesses.

A study published this week by the Bureau of Economic Research has found that the addition of a single Starbucks in a neighborhood can increase business startups. 

The researchers found that “compared to census tracts that were scheduled to receive a Starbucks but did not do so, tracts that received a Starbucks saw an increase in the number of startups of 5.0% to 11.8% (or 1.1 to 3.5 firms) per year, over the subsequent 7 years.”

Similarly, researchers studying the effects of pubs on social capital in Ireland found that local, rural pubs were important sources of economic activity as well as community cohesion. 

“Third places” like pubs and coffee shops facilitate both economic growth and social capital. People get excited when a new bar, restaurant or coffee shop opens in town because these businesses offer additional social opportunities.

But what happens when local governments approve lots of new bars, restaurants, coffee shops and other businesses, yet deny new housing?

What happens is you get more businesses competing for the same number of customers and employees. That’s what’s happening in New Hampshire.

In the Granite State, it’s much easier to start a business than it is to build a residence. So a lot of economic investment has been shifted away from residential construction and toward commercial and industrial development. As a result, we have a lot of businesses competing for too few employees. That’s created a labor shortage (or at least worsened a broader national labor shortage).

Governments in New Hampshire are approving new businesses, but restricting the supply of both customers and employees, which makes it hard for some of the new businesses to survive. It’s as if local planners are trying to build Hallmark movie sets–beautifully designed spaces that aren’t spoiled by the presence of regular people.

Desperate for workers, employers such as Valley Regional Hospital, the City of Lebanon and Service Credit Union are building housing for their own employees. But most small businesses can’t do that. Unable to find employees, or enough customers, they close. We’ve seen this happen with numerous bars, coffee shops and restaurants in places like downtown Manchester and Portsmouth in the last few years.

The residential shortage is already slowing the state’s overall economic growth, as highlighted by these small business closures. This imbalance between commercial growth and residential growth cannot continue. At some point, the housing supply will have to increase dramatically, or overall economic growth will have to slow further, if not contract. 

In the last several decades, local governments have happily approved new commercial developments while restricting new residential developments, as if businesses (and the economy) could grow indefinitely without any increase in customers or employees. 

Most everyone agrees that building more businesses is good for the economy and the community. They create economic opportunities and improve the quality of life. It follows that building the customer and employee base for all those new businesses is also good. Approving new businesses while deliberately depriving them of employees and customers is not a strategy for long-term success. Communities are strengthened by coffee shops that are filled with people, not by pretty but empty ones.

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Housing affordability is dinging the state budget

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The Josiah Bartlett Center has warned for the last few years that local government inaction on housing might prompt legislators to restrict local zoning authority. But legislators might have an even stronger incentive to act than the growing public frustration with local land use regulations: Falling revenue.

A combination of high interest rates and an extreme shortage of homes on the market has pushed housing affordability to a two-decade low in the state. Though interest rates clearly play a role, the New Hampshire Association of Realtors points out that supply remains the primary culprit. “It’s a lack of inventory that continues to push pricing to record heights,” the association wrote last month.

Home prices have fallen a bit in New Hampshire since hitting a record in October. But that’s not because the market has improved. Rather, interest rates are keeping some potential buyers on the sidelines, causing a decline in the number of aggressive bidding wars. When interest rates ease, buyers will return to a market still plagued by a severe inventory shortage.

No one knows how long interest rates will remain high. If the squeeze of high rates and low inventory continues to push buyers out of the market, New Hampshire could see a prolonged home sales slump. And that will be felt in Concord. In fact, it already has been.

For the first five months of the 2024 fiscal year, real estate transfer tax revenues are down 20%, or $23 million. That’s the largest decline of any state tax this year. 

We know what some are probably thinking right now. “But what about Interest & Dividends tax revenue?” Eliminating that tax, as state law does by the end of next year, will have a larger impact on the state budget. 

But the I&D tax phaseout is part of a strategy to make New Hampshire more economically competitive. The anticipated tradeoff is that making the state more attractive to investors, retirees and entrepreneurs will generate greater economic activity, and thus greater economic growth, in the long term. 

There is no such tradeoff with falling home sales. A $50 million annual decline in real estate transfer tax revenue caused by falling home sales is simply lost revenue. 

Worse, it reflects shrinking economic activity in an important industry, which will have ripple effects in the broader economy. Lawmakers have made clear that they want state policy to stimulate economic growth. Local policies that hurt economic growth, such as overly restrictive land use regulations, are increasingly being scrutinized by legislators. 

Though state lawmakers and local boards are unable to affect interest rates, they can do something about the housing supply. They can lift regulatory burdens that block or restrict new home construction. 

So far, legislators have been reluctant to preempt local regulations. Yet with  polls showing that most Granite Staters want government to address the state’s housing shortage, pressure is increasing on legislators to act. Falling state revenue by itself probably wouldn’t trigger state action. Combined with rising political pressure to act, though, it becomes another incentive for legislators to do something. 

So local boards (and voters at town meeting) have another warning sign. The longer local governments wait to clear the way for more home construction, the more likely it becomes that legislators will do it themselves. 

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While freedom flourishes in New Hampshire, the rest of New England is a different story

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Most of New England has some work to do to keep up with New Hampshire’s status as the nation’s freest state.

In the latest edition of the Cato Institute’s Freedom in the 50 States report, while New Hampshire finishes first in overall freedom (an index of personal and economic freedom), the other five New England states each finish in the bottom half among all 50 states.

Overall freedom:

  • New Hampshire: #1
  • Massachusetts: #26
  • Connecticut: #33
  • Rhode Island: #36
  • Vermont: #42
  • Maine: #43

When breaking down the rankings, all New England states do well on personal freedom (Connecticut being the lowest ranked at No. 16), but New Hampshire rises above the rest on economic freedom.

Economic freedom:

  • New Hampshire: #1
  • Massachusetts: #32
  • Connecticut: #33
  • Rhode Island: #37
  • Vermont: #43
  • Maine: #45

The two components of the economic freedom index are fiscal and regulatory freedom, on which New Hampshire also scores much higher than its regional neighbors.

Fiscal freedom:

  • New Hampshire: #2
  • Massachusetts: #18
  • Connecticut: #20
  • Rhode Island: #22
  • Maine: #41
  • Vermont: #46

Regulatory freedom:

  • New Hampshire: #17
  • Massachusetts: #39
  • Connecticut: #40
  • Rhode Island: #42
  • Vermont: #43
  • Maine: #45

Needless to say, all of New England, New Hampshire included, could use some regulatory reform. (These rankings accounted for laws enacted as of December 31, 2022, meaning New Hampshire’s universal license recognition law didn’t make the cut.)

In the Fraser Institute’s Economic Freedom of North America 2023, New Hampshire is first in economic freedom among all North American jurisdictions, while Connecticut is the next “freest” at No. 25 among just the 50 U.S. states. After that, it’s Massachusetts (28th), Maine (41st), Rhode Island (42nd), and Vermont (48th).

How free your state is directly affects many important outcomes. One is the movement of people.

“Fiscal, regulatory, and personal freedom are all independently, positively, statistically significantly correlated with net in-migration,” write William Ruger and Jason Sorens, authors of Freedom in the 50 States.

It’s no surprise, then, that New Hampshire is winning the migration game. According to data collected by Kenneth Johnson at the UNH Carsey School of Public Policy, the Granite State experienced a net migration gain of 18,300 in 2021 and 2022. Forty-four percent of those migrants came from Massachusetts, 8% came from Maine and Vermont combined, and 14% came from elsewhere in the Northeast.

New Hampshire was one of only two New England states to see its population increase every year from 2018–2022, growing to nearly 1.4 million today—a 6% increase since 2010—while a state like Vermont sits at about 647,000 people. (The other was Maine, which saw a migration surge during the COVID-19 pandemic.)

Net in-migration isn’t something New Hampshire can take for granted. More people died in the Granite State than were born in 2021 and 2022, and New Hampshire consistently has one of the lowest birth rates in the country, meaning the state’s recent population growth has been entirely due to those moving into the state.

And what explains the Granite State’s net migration gain? “One channel by which economic freedom affects in-migration is by increasing economic growth,” Ruger and Sorens write. “We found a robust relationship between economic freedom in one year and income growth in the next.”

The bottom line is that freedom isn’t just valuable in its own right (which it is). Freedom, fundamentally, leads to greater economic opportunity and prosperity. More freedom generally means more of the other two as well.

New Hampshire’s median household income of $83,449 is $15,000 higher than Vermont’s and $20,000 higher than Maine’s.

While the rest of New England champions increased government spending for social programs and public welfare, higher tax rates, more regulation, and top-down control over education and the economy, they get in return lower levels of economic opportunity, growth, and prosperity than New Hampshire does.

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