Before the Great Recession, policy analysts used to fret about “the two Maines” – one a northern, resource, manufacturing and rural economy, and the other a southern, service and largely urban economy.
On a regular basis, they’d scratch their heads, think hard and hold conferences devoted to finding ways “to spread the prosperity,” to somehow bring whatever was generating growth in southern Maine to northern Maine. While the boundary between north and south was always vague – north of Portland, north of Augusta, north and east of Bangor – the motivation was always similar: Let’s make Maine one.
The recent release of the newest Measures of Growth report from the Maine Economic Growth Council and the Maine Development Foundation led me to revisit the topic of regional divisions while widening the scope. Let’s look for a moment at three regions:
• The Boston metropolitan area (five northeastern Massachusetts counties plus Rockingham and Strafford counties in New Hampshire).
• The Portland metropolitan area (York, Cumberland and Sagadahoc counties).
• The rest of Maine.
Viewed from this broader regional perspective, the cascading nature of economic growth is striking. Over the period of recovery since the “official” end of the Great Recession (2010 to 2014 – the latest period for which comparable data are available), total production in private industry grew by 16 percent in the Boston area, 8 percent in the Portland area and 3 percent in the rest of Maine.
Total employment grew by 8 percent in the Boston area, 4 percent in the Portland area and 2 percent in the rest of Maine. Total population grew by 4 percent in the Boston area and 2 percent in the Portland area; in the rest of Maine, it fell by 1 percent.
For individual sectors, the growth rates move up and down, but the same relative pattern holds. For example: Total production in professional and business services grew by 23 percent in the Boston area, 19 percent in the Portland area and 10 percent in the rest of Maine.
Total production in retail trade grew by 14 percent in the Boston area, 9 percent in the Portland area and 4 percent in the rest of Maine.
Only in the government sector did the pattern vary, with growth of 7 percent in the Boston area, 0 percent in the Portland area and 3 percent in the rest of Maine.
Arts, entertainment, recreation and accommodations (the travel industry) was the only sector in which the Portland area and the rest of Maine (both with growth rates of 16 percent) approach the Boston-area rate of 21 percent.
While helpful in clarifying Maine’s position within northern New England (or at least its eastern corridor), these figures seem to present no obvious answers. Instead of the challenge of figuring out how to spread the prosperity around the “two” Maines, we’re now faced with the same problem of spreading the prosperity around three sections of a broader region.
A closer look at one element of the data, however, sheds some light on how a good deal of “spreading around” is already taking place.
The federal Bureau of Economic Analysis distinguishes between earnings by place of work (the location of an employer) and earnings by place of residence (the home of an employee). In 2014, employees who worked in the Boston area but did not live there earned over $14 billion more in that region than residents of the region working elsewhere brought back into the region.
For both the Portland area and the rest of Maine, in contrast, the flow of out-of-region earnings was positive. In 2014, Portland-area residents earned nearly $415 million more elsewhere than nonresidents earned in the Portland area. Much of this income came, undoubtedly, from the Boston area, some from the rest of Maine and some from wherever around the globe Portland-area residents can convince employers to pay them.
Workers in the rest of Maine earned even more outside their home region in 2014 – just over $431 million more than nonresidents earned in the rest of Maine. Unfortunately, this is actually down from $470 million in 2010, probably reflecting a decline in the overall population and a failure to develop the skills needed in other regions.
The point here is that the most important way to “spread prosperity around” is to make it easier for workers to move around, first in the old-fashioned way by driving, second in the digital way by navigating the Internet and, most importantly, by creating more widely available, shorter-term and less-expensive ways for residents of rural Maine to acquire the skills needed to get on either of these highways.
Charles Lawton is chief economist for Planning Decisions, Inc. He can be contacted at:
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