Maine’s Weak Jobs Recovery

 One Cent's Worth
By ZACK ANCHORS  |  September 11, 2013

Governor LePage’s press office sent a message to reporters last week that touted the state’s declining unemployment rate and accused the media of ignoring his administration’s record on creating jobs. There’s a simple reason the story of a rebounding jobs market hasn’t been told: Four years after the end of the recession, Maine’s economy is weak and its unemployment rate is high. Sure, the national economy isn’t exactly flourishing either, but there’s no doubt the state’s recovery is particularly pathetic. The most glaring proof of this is that for several years Maine has consistently ranked near the bottom in the nation for job creation. Why? The causes are complicated, but there are a couple big culprits: slow population growth, lots of aging baby boomers, and wrongheaded policy in Augusta.

Let’s start with the easy target: LePage. Our governor can’t be blamed for state’s fundamental economic weaknesses, but the lack of a strong recovery flies in the face of the guiding principle of the LePage administration, which is that the economy will thrive if the private sector takes precedence over everything — from fixing roads to providing basic assistance to the state’s vulnerable citizens. If Maine’s economy were experiencing a robust turnabout, maybe the tradeoff would be worth it. If there were credible signs that young Mainers were ceasing to migrate elsewhere for opportunity, and if vibrant businesses with quality jobs were springing up in the most impoverished parts of the state, then maybe those gains would be worth the watering-down of environmental laws, the steep cuts to social services, the rising property taxes, the bullying of opponents that apparently comes with LePage’s version of being business-friendly.

But it’s clear by this point that it hasn’t worked out that way. Maine has only recovered about one-third of the jobs it lost during the recession (the unemployment rate is currently 6.9 percent) and GDP growth (just 0.5 percent last year) has lagged both the nation and New England.

Granted, both of those measures fall far short of accurately gauging the economic well-being of ordinary folks. Thousands of Mainers don’t even count as unemployed because they dropped out of the labor force when they gave up looking for work. And if recent decades have taught us any economic lesson, it’s that the bulk of the benefits from economic growth in modern America tend to be narrowly distributed.

The fact that the Maine unemployment rate is lower than it was a year ago makes it a bit easier to see the economy in a positive light. But the 0.4 percent drop, statistically, means unemployment is essentially unchanged. And it has fallen much more slowly since the recession than in other New England states and the nation.

Republicans are quick to point out that the lags in economic growth and job creation in Maine is due in large part to demographics — namely, our slow population growth and our surplus of aging baby boomers. And they’re right. More people died than were born in Maine last year, and a huge share of our population consist of boomers. Slow population growth means that there are fewer people to fuel the economy and hold jobs. And as baby boomers age out of their prime working years they are retiring or cutting back hours. Both factors contribute to the numbers showing slow job growth.

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