Juxtaposing Realities in New England: RealEcon Visits Massachusetts and New Hampshire

The RealEcon team at the Council on Foreign Relations (CFR) went back on the road in late October for a brief visit to Massachusetts and New Hampshire as part of our ongoing listening tour across the United States. So far, we have traveled to Florida, Wisconsin, western Pennsylvania and New York, and Arizona. (We also had a rich conversation with students at Grand Valley State University in Grand Rapids, Michigan, on the margins of a CFR Election 2024 event.) The purpose of the tour is to understand what Americans across the country think about U.S. involvement in the international economy.

In Boston, we talked to an executive at a major pharmaceutical company, a former Boston city council member, a local journalist, a professor at Tufts University, and a state economic development official. We also held roundtables with students at Boston University and Suffolk University. In Portsmouth, New Hampshire, we met with a group of students (mainly working adults) taking evening courses in accounting and economics at Great Bay Community College.

Until the 1970s, Boston’s economy was dominated by large manufacturers, with companies such as Westinghouse, Baker Chocolate Factory, HP Hood, and Gillette employing thousands. Almost everyone went to the factory to work after graduation. Now, most of those large factories have closed or left the area. While manufacturing is still important for the state, it is mostly limited to producing components that go into final goods such as medical devices.

Today, the main drivers of Boston’s economy are finance, biotechnology, real estate, and higher education, including Harvard University, Massachusetts Institute of Technology, Boston University, and Tufts. Massachusetts General Hospital is the largest employer in the city. Cutting-edge research in biotechnology and life sciences is done in many of Boston’s hospitals and universities. People from all over the world come to Boston to gain access to quality healthcare services and to attend the city’s prestigious universities. The city has also seen a large inflow of investment, with international companies placing their headquarters in Boston to draw on the talented labor pool in areas such as artificial intelligence, climate technology, and life sciences, and to access the city’s robust venture capital base. In addition to foreign investment, Boston relies heavily on international trade, including for food during the winter months.

The students we spoke to from universities in Boston understood the importance of international engagement and had many thoughts on how the United States should—and should not—engage with the world. Most students supported targeted tariffs for key strategic sectors, not broad tariffs that would raise the cost of living. When we asked which sectors they considered “strategic,” they listed chips, defense, aerospace, energy, food, pharmaceuticals, and key components for manufacturing production. On China, some students thought that anti-China political rhetoric was unproductive. For them, it is better for the United States to focus on working with China on economic matters first, rather than human rights. Along those lines, students thought that the United States should not push its own moral and social standards on other countries when providing aid, especially given the country’s failure to live up to its own values at home.

While there is significant inequality and a lack of entry-level jobs in Boston, overall, the city appears to be relatively prosperous and internationally oriented. However, if you travel past Boston into greater Massachusetts, the scene looks very different. We heard how Lowell and Fall River were once thriving cities that were the epicenter of the textile industry in the 1860s. GE employed fifteen thousand people in Berkshire County before it closed in the 1980s. Smith & Wesson moved out of Springfield to Tennessee in 2023 due to stricter gun laws in Massachusetts, leaving the city hollowed out. Now the economic engines of those cities and towns are education, tourism, and, in some cases, smaller manufacturers.

According to one local, the biggest economic challenges for Massachusetts are housing and transportation. Decades of underdevelopment have led to a lack of workforce housing, and many people are migrating out of the state because they cannot afford to live there. Transportation infrastructure across Massachusetts is in poor condition, and traffic congestion is a challenge from Springfield to Boston. In the western part of the state and rural areas, access to broadband is also a major concern.

Heading north to Portsmouth, New Hampshire, we spent a few hours at Pease Tradeport, a former air force base that has been converted into a business and industrial park, housing 250 companies and organizations, such as Swiss pharmaceutical manufacturer Lonza, Global Seafood Alliance, and Great Bay Community College. At Great Bay, we asked a combined class of students studying economics and accounting to share with us their biggest economic concerns. The high cost of living—especially housing—was top of the list. A mother of five whose husband owns his own paving business emphasized the price of groceries. Others voiced concerns about the national debt, technology and its influence on children, the overuse of plastic, large companies and monopolies, inequality, and paying for state expenses like education (New Hampshire does not have a state income tax).

Students at Great Bay generally viewed international economic policy through a local/domestic prism. Some students expressed worries about further tariff increases and trade wars that would continue to raise the cost of goods. Others said tariffs could encourage U.S.-based business and spur domestic employment. One person said that they were not opposed to helping other countries via foreign aid but wanted to make sure the United States helped “its own” before giving money away, citing concerns about the Federal Emergency Management Agency (FEMA) running out of money after the spate of hurricanes to hit the United States. In response, another student argued that spending only one percent of the U.S. budget on foreign aid was a good investment. Students were supportive of foreign direct investment from companies like Lonza, as they employed Americans in their community and were not seen as “threatening.” Some felt less comfortable about Chinese companies, citing concerns about “selling out” the United States to other countries.

The contrasting economic realities in Boston and the surrounding areas just an hour or two away are stark. In Boston, we heard biotech professionals talk about financing new vaccines and students discuss their law school aspirations; in contrast, students in New Hampshire talked about finding a stable job with benefits and a high enough wage to give them a chance at owning a house one day. New England is a microcosm of the United States, where contrasting economic circumstances shape how people view international economic policy.