Deeper dive into employment data finds continuing weakness in Maine’s labor market

May 2, 2014

On the first Friday of each month, the U.S. Bureau of Labor Statistics announces national employment data for the preceding month. Financial markets and political polls rise and fall on the data released. Later each month, the Maine Department of Labor, in partnership with the Bureau of Labor Statistics, issues state employment numbers.

If the only information you have heard are official press releases and media coverage of those monthly reports, then you know that since the Great Recession of 2007-09 ended, Maine’s unemployment rate has been declining and remains slightly lower than the nation’s as a whole. But that is not the whole story. To produce a true understanding requires a deeper dig.

A more thorough assessment of Maine’s labor market conditions reveals the challenges still confronting Maine workers in 2014:

Maine consistently ranks near the bottom in job growth. Among the 50 states and the District of Columbia, Maine ranks 45th in its return to pre-recession levels of employment, 46th in total job growth since January 2011, and 42nd in private-sector job growth since January 2011. Maine also has lost 4,400 state and local government jobs since the recession began in December 2007. Maine’s slow population growth accounts for some of this poor job growth, but even adjusting for that, Maine still ranks in the bottom third of states in total job growth.

In recent months, the decline in unemployment has accelerated, and Maine is about two-thirds of the way back to pre-recession unemployment rates. But the state still has recovered only 54 percent of the jobs lost due to the recession.

The picture is even more complicated depending on where in Maine you live, your age, whether or not you have a full-time job, and if unemployed, for how long.

Of the 11,600 net jobs Maine employers have added since the end of the recession, 9,200 have been located in the vicinity of Maine’s three largest cities: Portland, Lewiston and Bangor. The greater Portland area alone accounted for 7,800 of the additional jobs. Outside of Maine’s three largest cities, Maine has added only 2,400 jobs. Unemployment rates remain stubbornly high in most of rural Maine. Among states where unemployment is higher in rural areas than in urban areas, Maine’s difference is one of the largest in the nation.

Since the recession ended, Maine ranks 3rd in the nation for the increase in the employment-to-population ratio, which is simply the percentage of employed adults. However, it is older Mainers who are driving this improvement. Not only do Mainers age 55 and older represent a disproportionately large share of Maine’s total population, they have increased their attachment to the labor force and employment more than in every other state. In contrast, the percentage of Mainers age 25 to 54 with jobs has not increased at all since the end of the recession. These are the men and women in their prime working years and who are most likely to be raising children and saving for their families’ future.

The most recent comprehensive unemployment and underemployment data show that nearly 96,800 Mainers want more work but can’t find it or have given up looking for work altogether.

Maine has the fifth highest percentage nationally of part-time workers who want more work but can’t find it. The unemployment rate counts these folks as employed even though they are still looking for a full-time job.

Eric Rosengren, president and CEO of the Federal Reserve Bank of Boston cited this concern in a recent interview with the Bangor Daily News at Husson University. The official unemployment rate also does not count another 8,400 unemployed workers who stopped looking for work because they could not find a job or opted to take care of family, go back to school or retire.

About 30 percent of Maine’s unemployed have been looking for work for more than six months compared with 14.2 percent of unemployed workers before the recession began. Research has shown that the long-term unemployed — those without jobs for 27 weeks or more — face significant disadvantages in the labor market simply by virtue of their status as being long-term unemployed. Studies have shown that even with credentials similar to someone unemployed for a shorter time, long-term unemployed workers are less likely to get the job.

Five years after the recession officially ended, thousands of Mainers still struggle to find the employment they need. Many federal and state policy choices in recent years have needlessly prolonged the economic malaise and made it harder for Maine workers, particularly those most likely to be raising families and saving for the future, to find jobs and provide for their families. For now, a more broadly shared recovery that creates better opportunities for all Maine workers and their families remains elusive.

Bangor Daily News

Joel Johnson is an economist with Maine Center for Economic Policy, and Garrett Martin is the organization’s executive director. Their recent report, Maine’s Labor Market Recovery: Far From Complete, is available on the organization’s website, www.mecep.org.