MECEP Report: State lawmakers must chart a different course to overcome Maine’s “elusive” economic recovery

Rural Maine suffered a seven-year recession between 2006 to 2013 and has lost more than 40,000 middle wage jobs since 2001

AUGUSTA, MAINE (September 19, 2017) – The Maine Center for Economic Policy (MECEP) today released its report, the State of Working Maine 2017, revealing that Maine continues to struggle to recover from the Great Recession. Maine’s economy is still 0.9% below what it was in 2007 before the Great Recession. In contrast, the entire US economy grew 12.7% and the overall New England economy grew 7.9% over the past decade.

“While the nation has bounced back from an historic recession, for Maine recovery remains elusive and for rural Mainers unattainable,” said Garrett Martin, MECEP’s executive director. “Policymakers in Augusta have done little to improve Maine’s economic prospects and, in many instances, have undermined them by squandering available resources and failing to invest in the state’s people and communities. The result has been higher property taxes, fewer good paying jobs, less economic security for families, insufficient funding for Maine’s schools, roads, and broadband infrastructure, and a hollowing out of rural communities.”

“Now more than ever Maine needs to increase investments in our people and our communities to begin repairing the damage of past decisions,” Martin continued. “The path forward requires a commitment to leverage federal resources, reject costly tax cuts for the wealthy, and curb race-to-the-bottom policies that undermine our ability to invest in Maine’s economy. Lawmakers must reject austerity, invest in a world class education for Mainers, and build a modern infrastructure to spark and nurture an economic revival that benefits all Mainers, regardless of where they live.”

The State of Working Maine 2017 presents a comprehensive analysis of the economic, demographic, and workforce trends that impact the quality and quantity of jobs in Maine.

MECEP’s major findings reveal strong correlations between a decline in labor force participation among white men without college degrees — chronic health conditions, alcohol and substance misuse, and “deaths of despair” (suicides, alcohol- and drug-related fatalities).

Other findings include:

Rural Maine is struggling to recover and is still in a deep depression. Between 2006 and 2013, economic activity outside the Portland region fell for seven consecutive years. In comparison, during the Great Depression of 1929, economic activity declined just four consecutive years. The Greater Portland metropolitan area has received an annual net influx of a thousand people per year from rural Maine since 2012 and now accounts for 51% of the state’s economic activity.

Unable to find a good job and struggling with declining health, too many Mainers are giving up on work. The labor force participation rate among prime-age workers ages 25 to 54, has fallen dramatically from 87% in 2001 to 82% in 2017. The five percentage point difference in labor force participation from 2001 to 2017 represents 30,000 Mainers of working age who are not participating in the economy.

Maine’s middle class is disappearing. Middle-class jobs have disappeared in large numbers, while low-wage jobs, largely in service, retail, and tourism sectors, have replaced them. This phenomenon began more than 15 years ago after the 2001 recession. Since then, Maine has lost a net of 37,000 middle-class jobs, mostly in manufacturing, largely replaced by low-wage jobs.

Unequal income gains worsen income inequality. Approximately 31% of all real household income growth between 2012 and 2015 went to the wealthiest 5% of Maine households, while the poorest 25% of households realized just 0.2% of the total income growth.

Economic inequality persists among women and Mainers of color. Maine women who work full-time, year-round, earn, on average, 79 cents for every dollar their male peers earn. Similarly, full-time, year-round Maine workers of color earn 85 cents for every dollar earned by white non-Hispanic Mainers and the unemployment rate for black Mainers with a bachelor’s degree is typically the same as white Mainers with just a high school education.

“Deaths of despair” accompany long-term unemployment and poverty. Prime-age Mainers who dropped out of the labor force have been dying in larger numbers every year for the last decade and a half. Opioid overdose deaths in Maine have greatly increased over the last 15 years — up by 273% since 2010. However, opioid abuse is not the only cause of this rising mortality. Centers for Disease Control and Prevention data show that among 25- to 54-year-old Mainers, between 2000 and 2015, suicide rates increased 45%, drug-related accidental deaths (e.g. overdoses) increased 577%, and deaths from drug- and alcohol-related illnesses (e.g. liver failure) increased 185%.

To read the full report, please click HERE.

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