Labor

Maine’s labor force participation lags the rest of New England

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While the number of jobs available in Maine has recovered to near pre-pandemic levels, the state’s labor force participation rate is declining.

According to monthly data reported by the state’s Department of Labor (DOL), the labor force participation rate fell 0.8 percent between December 2021 and January 2022, despite an increase in the seasonally-adjusted number of jobs available, from 616,300 in December 2021 to 631,800 in January 2022, during that time.

Throughout 2022, seasonally adjusted estimates of the state’s labor force participation rate have continued to fall, sitting at 58.8 percent as of July 2022, the last month for which data was available.

In a May publication about Maine’s labor force recovery from the COVID-19 pandemic, DOL noted that participation in the state’s labor force has been trending down for some time as a result of Maine’s aging population.

“Labor force participation has trended lower over the last 20 years, reflecting the rising share of

retirement age people in the state. The decrease that occurred over the last two years was greater than expected from aging trends. Though reliable detail on the demographic characteristics of those who remain out of the labor force is not yet available for Maine, national data indicates that a very large share of those who left the labor force were close to or at retirement age,” DOL’s Center for Workforce Research and Information (CWRI) wrote in the May 2022 publication exploring the state’s labor market recovery after the pandemic.

“Covid prompted some to retire for personal reasons. Record high real estate and financial asset valuations allowed many to retire at a point when they were a few years younger than their predecessors at retirement. This is likely a larger factor in Maine than the nation because of the state’s higher share of people in their 60s and 70s,” the report states.

The state’s data show an increase in the number of people aged 65 or older who reside in the state, rising from approximately 284,000 in 2019 to approximately 310,000 in 2021, but also an increase in the labor force participation rate and employment to population ratio for the same age demographic.

The CWRI publishes demographic data derived from the US Census Bureau’s Current Population Survey. Between 2018 and 2021, it shows an increase in both the number of people aged 65 and older in the civilian labor force and in the civilian labor force participation rate. In 2018, the data shows approximately 47,000 people in that age bracket in the labor force. In 2021, it shows 62,000. During that time period, the labor force participation for that age graphic also rose, from 17.8 percent in 2018 to 20.1 percent in 2021.

Other age brackets, including those for individuals aged 55 to 64 and individuals aged 45 to 54, saw a decrease in overall numbers and in labor force participation during the same time period.

In 2018, there were approximately 149,000 individuals aged 55 to 64 in the workforce. That number fell to 140,000 in 2021. In 2018, the labor force participation rate for that age group was 69.9 percent. In 2021, it was 67 percent.

Similarly, the number of individuals aged 45 to 54 in the workforce shrunk from 150,000 in 2018 to 120,000 in 2021. The labor force participation rate for the same age group fell from 83.7 percent to 80.1 percent during the same time period.

CWRI’s data also shows a diminished number of individuals aged 25 to 34 and aged 35 to 44 in the workforce between 2018 and 2021.

According to World Population Review, Maine is slightly older than nearby New Hampshire and Vermont and people aged 65 or older make up a slightly larger portion of its population. In 2022, the median age in Maine is 44. The median age in Vermont is 42.6 and 42.4 in New Hampshire.

Individuals aged 65 or older makeup 21.7 percent of Maine’s population, according to data from the 2020 census. For Vermont, that number is 20.6 and for New Hampshire it’s 19.3.

But despite a similar share of that age demographic, the not seasonally adjusted labor force participation rates in both New Hampshire and Vermont are higher than in Maine.

In June 2022, New Hampshire’s overall labor force participation rate was 66.7 percent, according to data from the US Bureau of Labor Statistics and compiled by the Federal Reserve of St. Louis, compared to a 59.8 percent rate for Maine. Vermont’s participation rate of 62.8 percent was also higher than Maine’s for that month.

Both Vermont and New Hampshire’s labor force participation have been above Maine’s from January 2020 through the present. 

Maine’s most recent labor force participation rate is also below the rates in southern New England states. In July 2022, Rhode Island’s labor force participation rate was 64.2 percent, Massachusetts’ rate was 65.8 percent, and Connecticuts’ rate was 64.5 percent.

Maine’s age demographics are slightly older than the states that makeup southern New England. In Rhode Island, 18.1 percent of the population is aged 65 or older and the state’s median age is 39.9 years. 17.4 percent of Massachusetts’ population is 65 or older and the median age is 39.4 years. In Connecticut, 18 percent of the population is over the age of 65 and the median age is 40.6 years.

Maine DOL did not return a request for comment about whether it possesses any more detailed demographic information or whether it possesses information more recent than 2021.

About Katherine Revello

Katherine Revello is a reporter for The Maine Wire. She has degrees in journalism and political science from the University of Maine. Her writing has appeared in Reason, The Washington Examiner, and various other publications. Got news tips? Contact Katherine at krevello@mainepolicy.org.

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