While I didn’t notice any parades or hear any bells chiming from local steeples, we were greeted last week with news that “The Great Recession” had finally ended, at least to the extent that the number of Maine workers with jobs had finally reached the state’s pre-recession total. This was, as they say, a moral victory.
Certainly all those who held jobs back in 2008 didn’t get those jobs back. And both the people who have jobs today and the nature of those jobs are a far cry from those of 2008. Handy as they may be for documenting the cyclical nature of economic activity, these employment numbers are only a starting point for understanding the complex interplay of demographic, technological and institutional changes that mark the challenges that face our labor market today.
For instance, employment of Maine residents (as measured by household surveys asking, “Do you have a job?”) increased by 5 percent from 2010 to 2016. Employment in Maine (as measured by payroll reports and surveys of businesses) increased by only 4 percent over the same period. Apart from technical differences in the sources of data, this fact seems to say that at least some of Maine’s recovery from the recession is the result of Maine residents commuting out-of-state for their jobs. Ironically, this pattern reversed in the more recent period from 2014 to 2016. Jobs in Maine (measured by the business survey data) increased by 2.1 percent while employment of Maine residents (measured by the household survey) increased only 1.5 percent – perhaps indicating that Maine businesses are picking up their hiring pace.
But these intriguing differences between jobs in Maine and jobs held by Maine residents fades to insignificance compared with the larger demographic trends affecting our labor force. The largest measure of Maine’s potential workforce is called the Civilian Non-institutional Population. It is comprised of all Maine residents age 16 and older who are not in active military service, not in prison and not living in a school dormitory. In 2016, this population in Maine was estimated to be 1,031,000. Within this group, the so-called Civilian Labor Force (all those who hold a job or are actively looking for a job) was estimated in 2016 to be 693,000, about 63 percent of the Civilian Non-institutional Population.
The central and clearly most significant challenge to continuing Maine’s recovery from the Great Recession lies in the unsustainable nature of the relative growth of Maine’s employment and that of its potential and actual labor force. While jobs held by Maine residents increased by 5 percent between 2010 and 2016 and jobs provided by Maine employers increased by 4 percent over the same period, the growth of our Civilian Non-institutional Population was only 2.5 percent over that period and the growth of our actual labor force was a mere 0.4 percent.
No wonder our unemployment rate has fallen to a historical low and our need for domestic and international immigrants is at a historically high level. Our employers simply cannot continue to expand unless they can attract more workers from outside Maine and convince more workers already here to put off retirement or come back to work in second and third careers.
And this search for workers is only getting worse. In the most recent 2014 to 2016 period – a time of accelerating job growth in Maine as noted above – Maine’s Civilian Non-institutional Population grew by only 0.4 percent and the labor force actually shrank by 0.4 percent – clearly the inevitable result of our ever-aging population and the natural pull of retirement regardless of the blandishments employers may make to entice older workers to hang on.
In short, Maine (particularly southern Maine) sits at the fulcrum of a demographic/economic teeter totter. If Maine employers continue to expand their offerings of good, high-paying jobs and continue to find people to fill them – both through attracting immigrants and through creative internships, work-study programs and other non-traditional methods for developing the talents now hidden in our Civilian Non-institutional Population – Maine will not merely recover from the Great Recession, it will tip into a new economic golden age not seen since the height of the post-Civil War era of expanding industrialization.
If, on the other hand, Maine’s employers can’t find and develop here – as well as attract from beyond our borders – the talent they need to continue the momentum they have clearly begun over the past several years, they will look elsewhere and our moment of opportunity will pass. Both southern Maine and Maine as a whole will tip in the direction of an ever-older, ever-more government-dependent (read Medicare, Medicaid, Social Security and local property tax) social structure.
The labor force challenge that Maine faces today is not merely one of recovering from the last “Great” recession, but of avoiding its increasingly clear alternative – a catastrophic statewide new Great Depression.
Charles Lawton, Ph.D., is a consulting economist. He can be contacted at:
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