State of Working Maine 2024 examines Maine’s economy and how it performs for working Mainers, particularly in the post-COVID era.
A strong labor market defines the post-pandemic economy. Workers are in demand across the United States as baby boomers retire from the workforce. This is especially true in Maine, which has the oldest population in the country. The pandemic also led to a mass reevaluation of employment, particularly for “essential workers” who endured dangerous conditions for relatively little pay. Consequently, employers have been offering higher wages to attract and retain workers and hiring a broader range of people who might have less experience or require more accommodations.
Wage growth has generally been strong over the last five years, leading to robust income growth. For most Mainers, income growth has outpaced inflation since before the pandemic (on average, prices rose nationally by 20% between 2019 and 2023, while median household income in Maine rose 25%).1 Maine stands out from the rest of the US, where inflation has slightly outpaced income growth for most households.
Despite this generally positive outlook, rising costs continue to undermine Mainers across income levels. Around 20% of Mainers in the households with the lowest incomes remain behind in real terms relative to 2019. This includes people who aren’t able to work or people who haven’t changed jobs or received significant raises in the past five years. Even for Mainers with higher incomes, key costs remain a burden:
- Housing and food costs have risen more than most in the past five years.
- Health care costs remain high, despite improved access to insurance.
- Child and vulnerable adult care costs are prohibitive, even as workers in these industries are severely underpaid — these costs not only cause economic pain to individuals and families, but they weaken the overall economy by restricting employment mobility, reducing children’s academic success, and limiting participation in the workforce.
Some of the ways lawmakers can help Mainers include expanding access to affordable child care and health care, strengthening safety net programs for people temporarily or permanently unable to work, allowing more workers to receive minimum wage, building more housing and continuing Maine’s rental assistance program, and cracking down on corporate power.
State of Working Maine 2024 provides lawmakers with an overview of these issues and points to policies that can build on the labor market’s success while tackling the rising costs many Maine families face.
Economy
Maine’s post pandemic recovery
Maine’s post pandemic recovery has boosted many incomes, but left some behind
Despite the exceptional upheaval caused by the outbreak of the COVID-19 pandemic in Maine in March 2020, Maine’s economy has generally strengthened over the past five years. The pandemic necessitated mass furloughs and recommendations to stay at home, which greatly reduced economic activity. But robust federal aid and recovery packages accompanied these actions, which allowed the economy to weather the downturn and rebound stronger than before. For most Maine households, this has meant higher incomes in 2023 compared to 2019, even after accounting for rising prices over this period. For the typical Maine household, post-inflation incomes in 2023 were 5% higher than they were in 2019 (see Figure 1).
Yet not all Mainers experienced these gains. Over the past four years, real income for households with the lowest incomes declined 1%, as inflation increased faster than any gains they made in their own income. As a result, the share of Mainers living in poverty has not changed significantly over the same period, and in fact, the share of Mainers living below half the poverty level — sometimes characterized as “deep poverty” — increased (see Figure 2).
The labor market has been the greatest contributor to the improvement in living standards, allowing more Mainers to work and increasing the wages of those who are working. The improvements have been greatest for the most marginalized workers, and earnings have risen most for the workers with the lowest wages.
However, tens of thousands of Mainers still live in poverty despite the strongest employment outcomes in decades, demonstrating the limits of work as a remedy for poverty. Physical or mental health conditions, care responsibilities, and immigration status are among the barriers preventing these Mainers from working. There are policies that can help break down these barriers. But policymakers also need to realize that Mainers will inevitably require support during periods of unemployment — and that some Mainers are engaged in valuable pursuits beyond traditional employment. Policies need to support Mainers who do unpaid care work, build stronger communities through volunteering, or go to school, which have a wider benefit not captured by the labor market.
Greater Portland gap
Gap between greater Portland and the rest of Maine persists
All Mainers deserve the opportunity to thrive, no matter which part of the state they live in. Yet economic disparity has persisted and in some cases widened in recent years, as the manufacturing base of rural Maine has continued to decline, and Mainers with college degrees have left rural areas for Portland or other states.
In State of Working Maine 2017, MECEP highlighted the divide between economic growth in Maine’s largest metropolitan region, the Portland-South Portland metro area, and the remainder of the state. Since then, the gap has only continued to grow. Between 2019 and 2022, the real gross domestic product of the Portland metro region grew almost three times faster than that of the rest of the state (14% versus 5%).2 And while the faster-growing population of this region (which encompasses all of Cumberland, Sagadahoc and York counties) contributes to this trend, there is also a widening gulf in productivity between the two areas. In 2001, the GDP per capita for residents of the Portland Metro area was one-third higher than the rest of the state; in 2022 that gap had widened to more than 50% higher.3
On the other hand, there have been some positive recent developments for rural Maine. In particular, the labor market has continued to strengthen in counties which had previously seen high unemployment rates. A decade ago, parts of rural Maine had particularly high rates of unemployment, but now the unemployment rate is consistently low across the state (see Figure 3). For example, Hancock County’s average annual unemployment rate dropped from 5.6% in 2015 to 3.4% in 2019 and then to 3.2% in 2023.4
Wages have also grown faster than inflation for most of the state, though wages remain significantly higher in the Greater Portland metro area than in other parts of the state (see Figure 4). Similarly, poverty remains stubbornly high in the more rural parts of the state. In 2023, the share of Mainers in the Portland metro area living below poverty was just 7.1%, compared to 12.6% in the rest of the state.5 The disparity among children is even larger — in 2023, 16% of children outside the Portland metro area lived in poverty; more than twice the rate of those within.6 Having said that, it is important to note that within Portland proper there are some communities with poverty rates equivalent to or greater than those found in other parts of the state.7
Policies that aim to improve the conditions of Mainers who are struggling most to get by will broadly help Maine’s rural population and prevent it from falling further behind. Rural Mainers are already more likely to benefit from food assistance programs like Supplemental Nutrition Assistance Program (SNAP) and health care programs like MaineCare. Children in rural Maine are most likely to benefit from a fully refundable federal Child Tax Credit. Tuition-free public higher education will make it easier for rural Mainers to attend school and remain in their communities after graduation.
Labor
Labor market
A strong labor market for all Mainers
Maine’s post-pandemic economy has demonstrated the importance of a strong labor market for the wellbeing of workers and the strength of the economy as a whole. When Mainers have the opportunity not only to be employed but to be employed in a job that values their skills and pays them appropriately, they are
better off as individuals and as part of our collective success.
Maine’s current labor market is one of the strongest in decades. Compared to the period before the pandemic, an additional 19,000 Mainers are employed in payroll jobs, while unemployment remains at or below 3%. By one measure, there are around two job openings for every unemployed worker in the state (see Figure 5).8
At first glance, this may appear to be a continuation of the pre-pandemic trend — February 2020 marked the 50th consecutive month of unemployment rates below 4% in Maine, and the headline rate has only narrowed slightly since then (from 3.2% to 2.9%).9 However, the additional strength of the labor market has led employers to hire more people who have historically faced greater widespread unemployment, especially Mainers without a college education, people of color, and Mainers with disabilities.
As a result, the share of working-age (16- to 64-year-old) Mainers who are employed is higher than it has been in many years. Eighty-two percent of people in this age group had a job at some point in 2023, the highest rate since 2006, and above the national average (see Figure 6). With workers in demand and wages high, more working-age Mainers are returning to the labor force.
While this is good news for Mainers and the economy at large, weaknesses remain that lawmakers should heed. For example, while the number of Mainers working part-time has declined slightly, it remains relatively high (25% of working-age Mainers),10 as does the share of workers who work less than year-round (29% of working-age Mainers).11 By comparison, 21% of working-age people nationally work part-time and 25% work less than year-round. Many Mainers have lower earnings than they would like because they can’t find fulltime, year-round work. Among people who work less than 40 hours a week, the most common reason is the need to care for a child or other family member.12
Lawmakers must also tread a balancing act between maintaining the gains of the strong labor market while avoiding a widespread labor shortage. State of Working Maine 2023 discusses implications of a workforce shortage and strategies to address it.
Wages
Wage growth
Wage growth has reduced inequality
All Mainers deserve a livable wage for the work they do. Employment should allow people to not only meet their basic needs, but to plan for a better future. Due to the strong labor market, wages in Maine have grown significantly, especially for workers in traditionally low-wage occupations, but many are still short of a truly livable wage.
For the typical worker in Maine, wage growth has outpaced inflation by 4% between 2019 and 2023, as local hiring conditions have led to employers offering wage increases above the national rate of inflation.13 Real-term increases have been especially high for service occupations that have traditionally been among the worst-paid in Maine. For workers in the bottom 25% of the income distribution, hourly wages have risen 12-14% above inflation since the pandemic (see Figure 7).
A closer look at specific sectors shows gains in weekly earnings (which reflect changes in hours worked as well as hourly wages) have been especially high in key areas. Some of the largest paycheck increases have come in hospitality and in health care support roles. Some retail establishments have also increased wages for staff, though wages at grocery stores have increased much less than similar businesses (see Figure 8).
In addition to the strong labor market, Maine’s minimum wage law has also helped to maintain a floor on wages for the lowest-paid workers (around 100,000 Mainers annually). Because Maine’s
minimum wage is indexed to the Consumer Price Index, it has increased at the same rate as the cost of living even as inflation has been high nationally and around the world.
Despite these gains, many working Mainers are still far from a livable wage. Even with the recent improvements, 45% of wage earners in Maine earned less than $22 per hour, which by one measure represents a living wage for a single adult without children or two working adults with one child.14 The inadequacy of even these increased wages is exemplified in the care home sector, where a recent change has increased MaineCare reimbursement rates to reflect a wage of at least 125% of the state’s minimum wage. This has contributed to average weekly earnings growth of 17% above inflation, yet weekly wages are still some of the lowest in the state ($869 per week on average) and the industry is struggling to recruit and retain workers.
Higher education
Postsecondary education is an opportunity for Mainers to access a wider variety of jobs and improve their earnings. Yet for many years, the expense of obtaining a college degree and the threat of decades of student loan debt have undercut the promise of higher education. Recent policy changes, such as the continued free community college program in Maine and reformed federal student loan repayment and forgiveness programs have made education more affordable for Mainers, and recent data shows obtaining a post-secondary qualification is still valuable.
At the same time, in the strong post-pandemic labor market, employers have been more willing to hire Mainers without a college degree, and unemployment rates for these people have declined. Compared to the pre-pandemic period, the unemployment rate for Mainers without a high school diploma has declined
from 6.0% to 3.8%, and for those with only a high school diploma, from 4.0% to 3.0% (see Figure 9).15 Earnings have also increased faster for Maine workers with a high school diploma, though they still lag behind those of college graduates. Between 2019 and 2023, inflation-adjusted median earnings for Mainers with only a high school qualification increased by 8% — while for those with a bachelor’s degree, earnings actually fell 2% (see Figure 10).16 For the relatively small group of adults in Maine who do not have a high school qualification, median earnings rose as much as 18% above the rate of inflation. These increases in annual earnings reflect both the ability of these Mainers to garner higher wages, and the ability to find more consistent employment through the year.
Even with these successes to narrow the gap between workers with and without a college degree, unemployment rates for Mainers with only a high school diploma are still twice as high as they are for those with a bachelor’s degree, while wages for high school graduates are 27% lower than for bachelor’s degree holders. It remains important to ensure all Mainers have access to an affordable college education to improve their economic situation.
Public sector
As the second-largest employer in Maine, state government has an obligation to lead the way in providing jobs that pay a sustainable middle-class wage. Ensuring public-sector jobs are good jobs allows state and local governments to provide effective and reliable services to all Mainers, from plowing the roads to educating our children.
While wages have increased for public sector workers in recent years — partly spurred by successful union negotiations — these gains have not been as large as those in the private sector. The result has been high turnover and difficulty hiring in both state and local governments.
On paper, Maine state government has taken actions to boost public sector pay, both for its own employees and for the educators employed by local school departments. The Maine Service Employees Association successfully negotiated a series of pay increases in recent years, and the legislature lifted the minimum salary for public school teachers to $40,000 per year. (In 2024, legislators also voted for a minimum hourly wage for support staff, which will take effect in the 2025/26 school year).
Yet both state government and local school boards wrestle with acute staffing shortages — and data on public and private sector pay in Maine reveals why. A September 2024 report by the Maine Department of Administrative and Financial Affairs found that, on average, public-sector workers in Maine are paid 14% less than peer workers elsewhere.17 This is barely any progress since a 2020 report found state workers were paid 15% less than comparable workers.18
Other data suggests the situation may be even worse. Since 2019, inflation-adjusted median annual earnings for full-time employees in Maine’s private sector industries increased 5%, while those for Maine’s state workers remained flat, likely widening the pay gap between state workers and their private sector peers.19 Local government and school district employees have fared even worse, with inflation-adjusted median annual earnings for these workers down 5% (see Figure 11).
As a result, state government reported a vacancy rate of 16% among its positions in early 2024,20 while school districts across the state had critical positions open as the 2024/25 school year began.21
Public officials at the state and local level need to recognize the realities of today’s labor market and ensure public sector worker wages and conditions keep pace with the private sector.
Older Mainers and Mainers with disabilities
Mixed outcomes for older Mainers and Mainers with disabilities
Not all Mainers are able to take full advantage of the strong labor market. Mainers with disabilities, for example, have seen slower earnings growth in the post-COVID economy than those without. Using the Census Bureau’s broad definition of disability, median inflation-adjusted wages for those reporting “any difficulty” in a range of activities rose by 2.1% between 2019 and 2023, compared to 4.8% for those without a difficulty (see Figure 12).22
And while the unemployment rate for people with a disability fell from 7.6% in the 12 months preceding the COVID-19 pandemic to an average of 6% in the 12 months ending July 2024,23 the share of working-age Mainers with a disability who are employed remains very low, rising from 39% of the population aged 18-64 with a disability in 2019 to 44% in 2023. In other words, most Mainers who report a disability are still unable to work for one reason or another.
While many Mainers with disabilities who are unable to work qualify for inflation-indexed payments in the Social Security Disability program, these payments are often very low. The average monthly payment for the 47,000 disabled workers in Maine who receive Social Security Disability benefits is just under $1,500 a month.24 As a result, Mainers with a disability were two-and-a-half times as likely to live in poverty as Mainers without a disability in 2023.25
Similarly, most Mainers who retire are eligible for Social Security’s retirement benefit. Like the disability benefit, this payment is indexed to the cost of living. Between March 2020 and January 2024, Social Security disability and retirement benefits increased by 20.3%.26 However, according to one estimate, more than half of older Mainers were economically insecure in 2022, without the income needed to meet their basic needs, demonstrating the fundamental inadequacy of Social Security payments for retirees.27
What’s more, not all retired Mainers qualify for Social Security retirement benefits. Retired teachers and state workers rely primarily on the state pension, which has a much lower cost of living adjustment (COLA). State law caps the annual COLA for Maine state pensions at 3% unless otherwise specified by the legislature. COLAs for state pensions also only apply to a portion of pension income. Between 2019 and 2024, state pensioners have received cumulative increases of 11.5% on average,28 even as the CPI increased almost 23%. That means 39,000 Mainers who rely on state pensions to meet their needs are getting nine cents less on the dollar than they would if their pensions actually kept pace with inflation.
Overall, income increased slightly faster than inflation between 2019 and 2023 for the typical older household in Maine, but real incomes declined for approximately one in four, reflecting the reduced ability of older Mainers to take advantage of the strong labor market (see Figure 13).
Racial wage and unemployment gaps
That we should all have equal opportunities to succeed regardless of our racial or ethnic background is a long-held American value. But despite the presence of anti-discrimination and civil rights laws, Mainers of color, like their counterparts across the country, continue to face barriers in the labor market that hold back their ability to find good jobs and earn livable wages.
In State of Working Maine 2020, MECEP found that Black, Indigenous, and Latino Mainers earn less and face higher unemployment rates than white non-Hispanic Mainers on average. These differences persist across education levels and cannot be explained by factors like experience or worker productivity.29 Instead, discrimination and exclusion of certain occupations from basic labor laws play a large role in depressing the wages of these Mainers.
However, in today’s tight labor market, unemployment has fallen, and wages have risen substantially for people of color in Maine. Compared to the period before the pandemic, the unemployment rate has more than halved for both Black and Latino Mainers (see Figure 14).30
While publicly available information is not expansive enough to allow for a granular analysis of wage growth by individual racial and ethnic groups over the past five years, data does show a narrowing of the gap between white non-Hispanic Mainers and Mainers of color. Between 2019 and 2023, median real hourly wages for white non-Hispanic Mainers grew by 3.9%, while those for Mainers of color rose by 7.1%. However, median earnings for Mainers of color are still just 83% of white non-Hispanic Mainers (see Figure 15).31
These improvements continue a positive trend for Mainers of color in recent years, when there have been substantial reductions in poverty from extraordinarily high levels. For example, the share of Mainers who identified as Black alone below the poverty line averaged 44 percent between 2014 and 2016; for the period 2021-2023, that rate had almost halved to 26 percent. Similarly, the poverty rate for Mainers who identified as American Indian fell from 34 percent to 16 percent over the same period, while for Hispanic Mainers it fell from 18 percent to 11 percent.32
Gender wage gap
The gap between men’s and women’s median hourly earnings — the “gender wage gap” — is a disturbingly persistent trend in the US economy. While the size of the gap has narrowed over time, progress has been slow over the last half-century. While for 75 years it has been illegal in Maine to pay women less simply because of their gender,33 differences in pay persist for several reasons:
- Career interruptions: Women take on most of the unpaid care work in the US, which leads to lower earnings as women take more time out of the workforce to care for family members. In 2023, Maine women were approximately eight times as likely to take time off from work to care for a family member.34
- Occupational segregation: Occupations traditionally occupied by women, such as teaching or nursing, are underpaid compared to traditionally male occupations.
- Workplace discrimination and pay negotiation gaps: There remain cases of outright discrimination and “lowballing” wage offers for women.
Between 2019 and 2023, real median earnings rose 0.8% for men working full-time and year-round in Maine, while rising 9% for women. This meant that women’s wages moved substantially closer to men’s.35 However, women’s wages were still just 85% of men’s, and this wage gap has remained persistently stubborn for years (see Figure 16). The gap is even larger when part-time or part-year workers are included, because the care obligations pushed onto women make it harder for them to find full-time work.
Because of additional systemic barriers in the labor market, the wage gap for women of color is even larger than it is for white women. Looking across the wider 2019-2022 period, median wages for Indigenous women in Maine were just 69% of those of white non-Hispanic men, just 60% for Black women born in the US, and just over half for Black immigrant women (see Figure 17).36
In recent years, Maine has implemented some policies that will help to continue to narrow these gaps. A 2019 law, which prohibits prospective employers from asking about prior earning history, diminishes the impacts of past discrimination from continuing to hold back women’s future earnings. The new state Paid Family and Medical Leave law, going into full effect in 2026, will reduce the need for all Mainers to leave the workforce entirely for care needs and encourage men to take on more care obligations.
Policies to improve wages
End exclusions in Maine’s minimum wage laws. While Maine’s minimum wage law provides a strong floor on wages for workers with low income, it does not cover everyone. Certain occupations like agricultural work are excluded entirely, while others, like Mainers who regularly receive tips, receive only limited protections. Many of these exclusions have their roots in historic discrimination against people of color. Maine lawmakers have previously passed bills to include farmworkers in the minimum wage law and basic workplace rights, but Governor Mills vetoed them. Several states are considering phasing out the lower minimum wage for tipped workers this year.
Require wage transparency in job applications. Laws that require employers to list wage ranges on job advertisements are in effect in 10 states and prevent employers from giving lower wage offers to people such as women or people of color. They also improve workers’ bargaining power and generally lift wages. Maine lawmakers passed a bill to implement this in 2023 but failed to fund its enforcement costs.
Require wage gap disclosures. Lawmakers can create a requirement for larger employers to disclose the wage gap in their organizations. Employers already must report information on the number of women and people of color in different roles in their organizations to the US Equal Employment Opportunity Commission (EEOC) — in 2016, the Obama administration proposed adding median wage data requirements, but the Trump administration abandoned the rule. Other countries, like the United Kingdom, have implemented similar systems, which have reduced the gender wage gap. Maine should require EEOC-reporting organizations to provide this information to the secretary of state for annual publication.
Ensure public sector wages keep pace with the private sector. While wages for Maine’s private sector workers have generally been robust over the past few years, the same is not true for many public workers as state and municipal budgets have not kept up with the strong labor market. This has led to widespread shortages in state government and in school districts around the state. Maine lawmakers recently recognized this issue by requiring a minimum wage for education support staff beginning in 2025/26. They should also increase the minimum salary for classroom teachers to $50,000 a year and increase wages for state workers to match private sector gains.
Ensure all workers have access to paid leave. Because women take on a disproportionate share of care responsibilities, ensuring widespread access to paid leave is critical to closing the gender wage gap. Maine has already made significant strides in this area. Since 2021, most Maine workers have been eligible for up to 40 hours a year of earned paid leave to use for short-term care needs. Beginning in 2026, they will have access to a paid family and medical leave program providing partial wage replacement for 12 weeks of leave for longer-term needs. Lawmakers should protect both programs from attempts to undermine them and should expand the earned paid leave program to all workers, not just the 85% who work for employers with more than 10 workers.
Costs
Key costs
Key costs are still troubling Mainers
With inflation in 2022 reaching its highest level in 50 years, it is not surprising that the cost of living consistently ranks as Americans’ top economic concern. Average consumer prices increased 21% between March 2020 and July 2024. While annual inflation rates have almost normalized since their peak in 2022, and wages have even outpaced inflation for most Mainers, higher prices continue to be a source of stress. As of summer 2024, most Mainers (53%) still reported finding recent price increases “very” or “moderately” stressful.”37
These concerns span a range of key cost areas. Almost one-third of Mainers (31%) report having trouble meeting basic spending needs (see Figure 18); 13% of renters report being behind on rent payments; and 9% of households “sometimes” or “often” can’t afford enough to eat each week.38
These statistics have remained relatively consistent throughout the pandemic and recovery period, though the effects of policy and wider economic conditions are evident in the data. In general, hardship declined while the American Rescue Plan’s major provisions (continued unemployment compensation payments, expanded SNAP payments, and an expanded Child Tax Credit) were in place in 2021, and spiked as these expired at the same time as inflation peaked in 2022.
Even with inflation slowing to near-normal levels, prices are not likely to go down. Lawmakers would do well to help ensure all Mainers can afford basic necessities like food, shelter, energy and health care.
Housing and food
Costs of housing and food are on the rise
Housing regularly ranks as the number one cost concern for Mainers in surveys and polls.39 Being able to have a stable and affordable place to live is one of the most fundamental human needs, and the increasing cost of housing has put incredible stress on many Mainers. Research shows a lack of reliable and stable housing leads to worse physical and mental health.40 For families, needing to make multiple moves causes issues for children including attention problems41 and education disruptions.42 For workers, being forced to move can lead to job losses, worsening their financial situation.43
A lack of supply underlies housing unaffordability in Maine. One study suggests Maine is already short almost 40,000 housing units, a deficit which will rise to 84,000 by 2030.44 Increased demand for housing has exacerbated this problem in recent years as more people move to Maine. Additionally, higher interest rates by the Federal Reserve to fight inflation are making it more expensive to buy a home. According to Maine Housing, the typical home sold in Maine in 2023 was unaffordable to nearly four of out five Maine households,45 an increase from a little over half of households in 2019.
Renters also face significant increases in costs. Even with the rapid gains in wages over the last four years, rents have risen even faster across the income spectrum (see Figure 19). As a result, rent is consuming a larger portion of people’s income. In 2023, just under half of all renter households in Maine were cost-burdened (spending more than 30% of their income on rent), which is somewhat higher than recent pre-pandemic levels, but not as high as in the wake of the Great Recession.46
These higher rents are especially harmful to the most vulnerable groups of Mainers — people of color, those with low incomes, and younger Mainers (see Figure 20).
While filings for forcible eviction statewide are lower than they were in 2019,47 other indicators suggest making rent is still a struggle for many Mainers. Around one in eight renter households report being behind on rent.48
The most extreme impact of the housing shortage and resulting cost increases is homelessness. Rates of homelessness are difficult to use as an indicator of housing instability because they also reflect an increase in people arriving in Maine seeking asylum. Nonetheless, the state’s annual point-in-time reports suggest the housing shortage is driving more people to homelessness. Between 2019 and 2024, the total number of unsheltered people almost tripled, while the number of housed people in shelters increased by 20%.49
The high cost of groceries is a similarly pressing concern for Americans. The cost of food at home has increased faster than many other expenses (25% between 2019 and 2023 compared to 19% for all consumer items)50 and is a core expense that cannot be avoided. It is not surprising, then, that this cost is also squeezing household budgets, even with increased incomes. When asked about the cost of groceries, approximately one-third of Mainers say higher costs cause them to sometimes be unable to buy either enough food or the kinds of food they would like, compared to just over a quarter of Mainers before the pandemic (see Figure 21).51
Note: In Figure 21, “pre-pandemic” is represented in purple.
Policies to address costs of housing and food
Build more homes. Broadly speaking, the most important thing lawmakers can do to lower housing costs is to increase housing supply. Legislators have made steps in the right direction by reducing regulations that increase costs or make it difficult to build, and by subsidizing development of affordable housing. Direct state-sponsored construction of social housing is another strategy that has been successful elsewhere.
Continue the state rental assistance program. In 2024, the legislature set aside $18 million for a pilot program to offer up to $800 a month in rent relief for up to two years for 2,400 Mainers. This new program will help to bridge the gap left by expiring COVID-era rent relief programs and the chronic shortfall in the federal housing assistance program. However, it is likely that this temporary program will not fully relieve housing instability for all Mainers. Lawmakers should make the program permanent and expand it.
Crack down on corporate consolidation. When corporations face less competition, they are more easily able to use inflation as a cover to raise prices further. At least some of the recent increases in prices are due to profit-maximizing by companies, made possible in part by consolidated industries. Both federal and state governments can do more to enforce existing anti-trust statutes and strengthen legislation to stop big businesses from abusing market dominance.
Continue free school meals. Food provided through school meal programs alleviates hunger among young Mainers and improves their academic performance. It reduces the pressure on parents’ budgets,52 and also has a small impact on inflation, resulting in smaller price increases at grocery stores for everyone as parents buy less food there.53 Since 2022, all Maine K-12 students have qualified for these free school meals, an effort which should continue.
Expand tax credits for Mainers with low incomes. In 2021, the expansion of the federal child tax credit cut child poverty in half, and helped thousands of Maine families cover the costs of essentials like food, clothing, and rent.54 At the state level, Maine has improved its own earned income tax credit and child tax credit in recent years, which also help the most vulnerable families make ends meet. Federal and state lawmakers should expand these already-successful programs to relieve the pressure of rising prices on the families who are most impacted.
Health care
Health care access has improved but costs remain high
Since the passage of the Affordable Care Act in 2010, the share of Mainers covered by health insurance plans has increased significantly. In 2023, 94% of Mainers had health insurance coverage, a modest improvement from 2019, when 92% of the population was covered, and substantially better than 2010, when the figure was just under 90%.55 While this increase in coverage has been accompanied by some improvements in affordability, cost remains a barrier to access for many Mainers.
In 2022, the typical Maine family spent a similar share of its income on health care premiums and out-of-pocket expenses as it did in 2019 (a little under 6%) (see Figure 22).56 However, the number of Mainers who said they had to put off seeing a doctor because they couldn’t afford it fell substantially, from 12.3% in 2019 to 7.3% in 2022,57 suggesting the number of Mainers facing the most acute health care cost pressures has decreased (see Figure 23). This may be due to Mainers with lower incomes seeing a rise in disposable income, as well as the expansion of MaineCare eligibility to an additional 100,000 people since 2019.58
This decline in health care cost pressures spans demographic groups but many vulnerable Mainers still struggle to access health care. In 2022, health care was delayed due to cost by 14% of Mainers of color, 17% of Mainers who had a disability, which made it difficult for them to perform everyday errands, and 24% of people recently unemployed.59 Despite the expansion of MaineCare eligibility, Mainers with low incomes are still more likely to delay health care appointments due to cost than those with higher incomes.
A 2023 survey by Consumers for Affordable Health Care confirms many Mainers still struggle with overwhelming health care costs. Around 60% of survey respondents said they had to take some kind of extraordinary measure due to higher-than-expected costs, including self-medicating or rationing medicine, in addition to delaying appointments.60 High deductibles, unexpected bills, and lack of price transparency were all key problems.
Policies to address costs of health care
Expand access to low-cost health care plans like MaineCare. Expanding MaineCare eligibility has been one of the most impactful policies in improving health care access and affordability. Maine should build on this success and expand eligibility further to leverage federal matching dollars to cover more Mainers with low incomes just above the poverty level. For Mainers with incomes above 150% of the poverty level, federal law allows the state to charge a modest copay to further offset the cost.
Curtail the use of facility fees. Facility fees tacked on by hospitals and other providers drive up the cost of care for patients when insurance doesn’t cover them. The legislature should follow the recommendation of the commission charged with investigating the impact of facility fees and bring more transparency and accountability to the practice (and for telehealth appointments, prohibit them entirely).61
Ensure immigration status isn’t a barrier to health care access. For all Mainers to have access to affordable care, lawmakers need to guarantee no one is excluded due to their immigration status. In 2021, legislators ensured children, pregnant adults without documentation, and recent green card holders would no longer be excluded from MaineCare coverage. Lawmakers need to finish the job and extend eligibility to the remaining population of immigrants.
Erase medical debt from credit histories. Medical debt remains a common burden for Mainers and as a drag on their credit rating can limit opportunities to purchase a home or start a business. However, medical debt is a poor indicator of credit worthiness because it is often the result of bad luck more than poor financial planning. Mainers cannot control how or when they get sick — or how much their treatment will cost — and they should not endure further punishment when they accrue medical debt.
Expand and streamline access to hospital free care. Hospitals in Maine are obligated to provide free care (sometimes called “charity care”) to patients with low incomes and without insurance who might otherwise be unable to afford treatment. However, each hospital in Maine sets its own income eligibility levels and application processes, which confuse patients and reduce use by those who need it. The legislature should create a single standard that is easy to understand and access by patients statewide.
Care economy
Market failures in the care economy
Caring for children, older adults, and family members with disabilities is a growing responsibility for many Mainers. It also creates major strains on families trying to balance these obligations with their ability to work and thrive economically. At least 25,000 Mainers are out of the workforce due to care obligations,62 while many others struggle to balance both work and care. Access to affordable quality care is important both for the individuals receiving care and for their loved ones.
Currently, the typical full-time rate for infant care in Maine is $297 a week, or roughly $15,444 per year.63 This represents a 29% increase from $230 per week in 2021 (just under $12,000 a year) at a time when the typical cost of living increased 11%.64 As a result, the cost of infant care now exceeds 17% of a typical Maine family’s income, far in excess of the recommended 7%.65
While care is becoming increasingly unaffordable for Mainers and their relatives, care industries are unable to pay sufficient wages to attract and retain workers. In 2023, the typical hourly wage for a child care worker in Maine was just $16.35, and for home health aides $17.39.66 This puts most workers in these occupations among the bottom quartile of wage earners, despite the crucial and difficult nature of their job and the need for significant training.
This combination of insufficient wages and high costs is a clear example of a market failure that requires state intervention. For child care, the Biden administration has proposed a system of subsidized care based on income, which would cap daily costs at $10 for many families. This concept is similar to a successful long-running program in Québec.
In caring for older adults and people with disabilities, the state already plays a significant role through MaineCare payments to providers. As a large proportion of the population receiving care services is enrolled through MaineCare, the state essentially funds most of the program already. However, the state’s hourly rates to providers — and indirectly to workers — is too low to cover costs and pay an adequate wage. Those rates must increase if care is to be affordable and sustainable.
For more on problems and solutions in Maine’s care industry for older adults see MECEP’s Closing the Gap: Maine’s Direct Care Shortage and Solutions to Fix It.
Policies to address costs of caregiving
Create a comprehensive subsidized child care program. The child care system is clearly a case of a market failure, which requires state intervention to function properly. In 2023, Maine expanded eligibility for the program from 85% to 125% of the state’s median household income, while requiring the state to develop a plan for a comprehensive subsidy system that covers families earning up to 250% of the median income and ensuring that they pay no more than 7% of their annual income in childcare expenses, and child care providers are paid a living wage. That goal is set to be phased in by 2030, and will require lawmakers to remain committed to developing, implementing, and paying for the program for years to come.
Raise labor rates for long-term care workers. Like child care, the system of care for older adults and adults with intellectual and developmental disabilities requires more state support to function correctly. Low payment rates given to providers and low wages paid to staff hold back the availability of supports and services. Maine needs to set higher rates for MaineCare and state-funded long-term care programs and ensure workers are compensated competitively. The reimbursement rate for the labor portion of direct care supports and services should be raised from the current 125% of the statewide minimum wage to 140%, to better reflect the value of direct care worker labor. The law should also be amended to consider local minimum wages such as those in Portland and Rockland.
Conclusion
Preserving gains and bridging gaps
State of Working Maine 2024 presents a somewhat mixed picture of Maine’s economy. While an exceptionally strong labor market has resulted in large wage gains for most workers, people who are unable to work have fallen behind economically. And the rising costs of essential items like food, shelter, and health care have hit hard even those whose incomes have outpaced the general rate of inflation. As a result, some Mainers continue to report substantial hardship and consider today’s economy bad.
Policymakers have two tasks ahead: preserving the tangible gains Maine workers have made, and acknowledging more work remains to ensure everyone is secure in their basic needs.
Lawmakers should continue to empower workers by bringing more transparency to wage negotiations, and by strengthening important guarantees for workers with low wages like minimum wage and overtime protections. To help more workers participate in the strong labor market, legislators should defend and implement the new Paid Family and Medical Leave program, expand access to affordable care programs for children and vulnerable adults, and continue to make higher education more affordable.
While the worst of the post-COVID inflationary surge is in the rearview mirror, prices remain very high. It is extremely difficult for policymakers to actively create disinflation — and indeed it may be economically dangerous to do so — but they can take steps to stop corporations from exploiting supply shortages to make inflation worse and pad their bottom lines. This can take the form of direct intervention in sectors like care, where a combination of government price-setting and subsidies is necessary to overcome a market failure. In areas like housing, the state can continue to take a proactive role in increasing supply. For other parts of the economy, public officials need to take a stronger stand against corporate consolidation, which allows for abuse of market power in general.
There will always be times when Mainers need assistance. The height of the COVID-19 pandemic demonstrated no one is immune to unexpected hardship, and in such cases public support can help weather the storm. Robust federal and state responses to COVID helped individuals and the economy as a whole emerge stronger than before. It is incumbent on lawmakers to ensure Mainers facing challenges have the tools and resources to weather economic storms and emerge stronger than before.
View full report for notes and acknowledgments.
