Maine is awash in unsettled public policy disputes – affordable housing, Medicaid expansion, education funding and tax reform, to mention but a few. Taken alone, none will ever be resolved. And none of these current policy disputes, or any others, can be solved without considering three questions: Who are we? Where are we? What do we do?
Virtually all of the hottest policy issues today are based on yesterday’s answers to these questions. But whatever resolution eventually passes muster with our voters, our legislators and whoever is elected governor in 2018, it will have to address tomorrow’s realities if it is to succeed. In short, we must today build solutions to tomorrow’s problems.
All of Maine will be transformed by the demographic tsunami we have only begun to experience. While the basic forces of demographic change will be the same in all regions of the state, their size, intensity and impact will vary widely from region to region. As a result, public policy responses that may be appropriate to one region may not apply to others. For that reason, it is important to enumerate the basic factors that will shape tomorrow’s answers to these questions so that they can be documented both for the state as a whole and for the state’s major regions.
These fundamental social metrics (for the state, a region, a county or an individual municipality) are:
• Natural increase: The number of births minus the number of deaths in the state (or region or town).
• Net migration: The number of people from another state (or another region or another town) moving to Maine (or to a given region or town) minus the number of Maine (or region or town) residents moving out of the state, region or town;
• Demographic structure: At its most basic, the shares of the population younger than 16, aged 16 to 64 and older than 65.
• Labor force: Who works, is looking for work or doesn’t work? What share of the working-age population is in the labor force?
• Employers: How many enterprises are seeking workers?
The central issue facing Maine today can be summarized in the following two sentences: Since the end of the Great Recession in 2010, Maine’s resident employment has grown by 4 percent, or about 25,400 employees. Over the same period, Maine’s labor force has declined by about 4,600 people, our deaths have exceeded our births by about 3,600 and nearly 2,000 more Maine residents have left for other states than have come here from the rest of the country.
These trends – growing employment and diminishing labor force – are simply unsustainable. Current projections from the Maine Office of Policy and Management indicate that by 2024, our population will remain essentially stable at about 1.33 million residents. Within that total, however, the office projects that the number of residents age 15 and under (our prime education force, our future) will decline by nearly 21,000 and the population age 16 to 64 (our prime labor force) will drop by over 71,000. Meanwhile, our population age 65 and older (our golden agers) will increase by nearly 94,000. Given these trends, we would need to see an enormous increase in labor force participation within the 65-plus population just to maintain the size of today’s labor force.
It is encouraging that since its low of about 45,500 in 2009, the number of private establishments reporting a payroll – i.e., the number of private businesses offering jobs in the state – has risen to just over 54,000 in 2016. The animal spirits of entrepreneurial capitalism in Maine seem to be alive. But the average number of employees per company has declined throughout the economic “recovery,” and it will be interesting to see how these employers respond to the increasingly challenging task of finding workers in the demographic environment so evident in the figures above.
We and our elected representatives in Augusta and in town halls across the state may support and even enact into law solutions to our housing, health, education, tax, marijuana and assorted other problems, but they are doomed to fall short of our good intentions if we do not integrate them as part of a full-scale assault on our overwhelming labor force problem. For that reason, I intend to devote my next several columns to an exploration of a) how the metrics noted above apply to the major regions within Maine and b) what is being done and might be done to address the problems they present.
Consulting economist Charles Lawton, Ph.D., can be contacted at:
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