Commentary

“Full Employment” is a Faux Reality in Maine

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The state of Maine, specifically its metro areas of Portland, Lewiston and Bangor, has achieved full employment. Well, at least in economic terms.

Charles Lawton, the chief economist of Planning Decisions, a Maine-based research and planning firm, told the Portland Press Herald that our state has reached full employment and that our largest cities are attributing the most to that rating.

In December, the unemployment rate in Portland was a mere 2.8 percent, with just 5,602 unemployed of the 197,201 person labor force in Maine’s largest city. In the United States, 387 individual municipalities are designated as metro areas. Portland rounded out 2015 as one of just 25 in the U.S. with an unemployment rate below 3 percent.

Lewiston and Bangor share surprisingly similar numbers as well. Lewiston’s unemployment rate in December was just 3.4 percent, with only 1,856 jobless of 54,996 total workers. Bangor had the highest unemployment rate of the three with 3.7 percent. The Queen City has a workforce of 70,612, with 2,599 unemployed workers.

Economists consider full employment to be achieved when the unemployment rate is at 4 percent or less, meaning Maine’s three largest municipalities have reached full employment in economic terms. Maine as a whole has been at the full employment mark since last August. A Bureau of Labor Statistics report released in December shows that 25,810 Mainers were unemployed in a workforce of 675,496 people. The last time Maine saw its unemployment rate consistently below 4 percent was in the summer of 2002.

Some Mainers were put back to work by bold policy reforms. Gov. Paul LePage’s welfare reforms put 12,000 able-bodied Mainers back to work, or in active search of work while simultaneously volunteering or participating in state-sponsored training programs. These refinements of our state’s welfare law have saved taxpayers roughly $15 million in federal benefits for able-bodied, working-age childless adults.

But due to low unemployment rates, analysts worry that businesses won’t consider expanding in Maine because there aren’t many Mainers looking for work. This could push companies to move or expand to other areas of the country, where the jobless are readily available for employment.

However, broader examinations of Maine’s unemployment rate suggest that nearly 10 percent of our state remains unemployed. That figure takes into account workers who saw their hours cut, can’t find full-time work, are only engaged in a part-time job or have stopped looking for work entirely.

Regardless of what percent of Mainers are actually jobless, there is more that we can do in our state to bring down these numbers. Our business climate and state demographics alone hinder job growth and create disincentives for businesses to operate in Maine.

The cold hard truth is that Maine is old and exports its youth. The median age in Maine is nearly 44 years old, the highest rate in the country. Additionally, only 21.4 percent of our population is age 18 or younger, the second worst for any state in the country. And, almost 16 percent of our population is over the age of 65, which is the seventh highest rate in the nation.

These numbers make a big difference, too. Utah, which has the lowest median age of 30, leads the country in Forbes assessment of Best States for Business.

Maine, on the other hand, pales in comparison. Maine ranked last in Forbes assessment from 2010-2013, but our state is slowly making progress. However, our state is still plagued by one of the toughest regulatory environments and suffers from high business costs.

Overall, Maine’s job growth in 2015 only increased by .8 percent, but that number is up marginally from previous years. Our private sector job growth increased just .1 percent in 2015, which is telling of how (literally) taxing it is to own and operate a business in Maine.

But, there are steps to reverse these trends.

First and foremost, Maine has to expand its number of 25-44 year-old working-age adults. This can be done in a number of ways. Removing restrictions and regulations on businesses will give business owners the courage to expand, attracting workers and creating a job market for working-age adults to find quality work opportunities.

Additionally, companies can offer internship-to-work programs for college graduates who seek stability after earning their degree, and help pay off portions of their student loan debt to assure longevity as an employee.

Maine also needs to be more open to foreign and immigrant working-age adults. Part of the problem our state experiences is that there are too few working-age adults for quality jobs to be created. Business owners want workers who are young and educated that will dedicate their working lives to a company. Because Maine has one of the lowest populations of persons 18 and under, our future totals of working-age adults will be among the lowest in the country. We must attract foreign and immigrant help, and find new ways to get out-of-state workers to move to Maine.

These policy changes will create new startups in our state, add new workers to our labor force and supply college graduates with gainful employment opportunities in Maine.

While our state and its metro areas have shown improvement, our shortcomings derive from our business climate and demographics. Instead of accepting full employment on paper, let’s bring prosperity to every Mainer by achieving full employment in practice.

About Jacob Posik

Jacob Posik, of Turner, is the director of communications at The Maine Heritage Policy Center (MHPC) and the editor of The Maine Wire. He formerly served as a policy analyst at MHPC. Posik can be reached at jposik@mainepolicy.org.

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