Maine’s unemployment rate is down, but so is total employment

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The LePage administration loves the fact that Maine’s unemployment rate is below 4 percent – it’s proof, they argue, that the Governor’s tax, spending, economic development strategies are working. Not true.

The rosy unemployment figure masks the fact that Maine’s total employment has actually declined over the last several years – we’re approaching recession lows. More importantly, many who have lost jobs can’t find work, and have stopped looking. Maine’s participation rate (the percentage of Mainers with a job or looking for a job) has recently dropped sharply.

Maine Bureau of Labor Statistics data shows: pre-recession total employment in Maine reached a high in December 2006 of 672,000; recession lows (December 2009) saw this figure drop to 636,000; 36,000 jobs were lost.

As Maine slowly climbed out of the recession, total employment (December 2013) rose to nearly 663,000 – 27,000 jobs were recovered.

But this upward movement has not continued. Instead of gaining another 9,000 jobs to finally climb out of the recession, Maine lost 12,000 jobs. In March 2016, total employment stood at 651,000.

More ominously, Maine’s participation rate, which had hovered around 65 percent for over six years, has dropped precipitously over the last two years – it now stands at 61.7 percent.

In short, it’s not good news when our unemployment rate is artificially driven down by the bad news that we’ve lost 12,000 jobs in two years, that many of the unemployed have stopped looking for work, and thus our participation rate is falling.

Though some highly skilled/high tech employers can’t find enough workers, the larger reality is, we face a jobs shortage. This shortage is largely due to LePage’s backward-looking tax, spending and industrial development strategies.

He wants to breathe life into Maine’s dying pulp and paper mills; he wants to cut more wood; he wants to forestall the closure of outmoded biomass plants – all with an eye to preserving jobs.

But these traditional employment activities are facing a national as well as a global squeeze – none of these activities are the employment wave of the future.

He wants “Open for Business” zones where employers who invest $50 million and hire 1,500 people will get a myriad of tax breaks, investment credits, relief from existing labor laws, etc. This is little more than wishful thinking.

On a smaller scale, he champions “New Markets Tax Credits” administered by the Finance Authority of Maine (FAME). Similar authorities in one form or another have existed for more than 40 years – there is no record of sustained job growth. Most recently FAME gave us the Cate Street Capital debacle – Maine taxpayers paid $16 million for nothing.

What the Governor refuses to do (in spite of his small business rhetoric) is put the weight of his office behind small businesses/small projects that are the acknowledged driver of employment growth in Maine and the nation.

For example:

The Governor killed the solar energy bill – a carefully drafted compromise bill with bipartisan support – a bill that meets future energy needs. Passage would have allowed hundreds of small projects go forward, dozens of small firms throughout the state would be benefited. Hundreds (or more) jobs would have been created.

The Governor has repeatedly vetoed Maine’s participation in the Affordable Care Act. Not only does this leave 80,000 Mainers without health care insurance, but it robs the state of millions of federal dollars that would have filtered into every corner of the state. Over 4,000 jobs in hospitals, doctors offices, rehab and testing facilities would be created almost immediately. Moreover, these health care-related jobs are projected to increase over time.

The Governor’s past refusal to issue highway bonds robbed the state of construction jobs when we needed them most – unemployment was high, interest rates were low, bid prices were coming in below engineer’s estimates, the backlog of work was (and remains) immense. Now he refuses to issue elderly housing bonds – more construction job opportunities will be lost.

The Governor killed offshore wind development by driving Statoil from the state; he has slowed onshore wind development. He ignores a jobs/energy source of the future. We were on the cutting edge: Statoil was prepared to invest $120 million in Maine, but they instead recently invested 10 times that amount in European offshore wind. Dozens of Maine firms have supplied onshore wind developers; this number would have expanded to meet Statoil’s needs. The employment potential was huge.

Finally, the Governor refuses to support a National Monument in the Katahdin region– a gift to the state (87,500 acres, which could be expanded to 150,000 acres and a $40 million dollar support endowment). This is one of the most economically depressed parts of Maine – historic jobs are gone. Any fool can see that Acadia National Park is an economic engine; it drives the whole Bar Harbor region. Hundreds of businesses benefit, thousands of jobs are created, and Katahdin holds a similar promise.

Bottom line: the Governor needs to stop chasing yesterday’s jobs and start going after the jobs of the future. His narrowness of vision is killing us.

Orlando Delogu of Portland is emeritus professor of law at the University of Maine School of Law and a longtime public policy consultant to federal, state, and local government agencies and officials. He can be reached at orlando.delogu@maine.edu.

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  • todiscus

    A comprehensive stream of test questions for our legislative candidates this fall.
    Thank you.

  • Chew H Bird

    Let us not forget, the figures in the “less jobs available” category don’t include people who work for themselves or as independent contractors as the data is not yet available. Those self employed and contracting make up a significant portion of employment in Maine. Also, as traditional industries are faced with increased competition and decreased profitability, we are also losing many young workers to other states due to Maine’s high cost of living, high taxes, and better wages elsewhere. Add to the young workers going elsewhere our aging population and the recipe ends up creating an economic scenario that is downright frightening.

    While our current Governor certainly shares some of the blame, there are many other factors at work that decrease the number of jobs available that have been in place for decades. In 1998 I had an opportunity to bring a California based business to Maine and even had competitively priced office space available for them, but they chose New Hampshire due to Maine’s high tax burden. That scenario still exists today and it has nothing to do with out current Governor.

    Most of my work is now out of state with corporations who can afford to pay for my services. Maine’s small businesses are being squeezed by our state government and need to make “cheap” decisions instead of “frugal” decisions and that (to me) is a huge problem that will continue to drain our younger workers and reduce business investments in our economy.