The latest round of the American Community Survey (ACS) released by the US Census Bureau in September offers a snapshot of economic and social conditions in Maine in 2022, giving us the first comprehensive look at conditions in the recovery from the COVID-19 pandemic. The ACS data covers many data points, but the most salient are those relating to incomes, the share of Mainers in poverty, and the number without health insurance coverage. Around the same time, the Census Bureau also released its estimates of the “Supplemental Poverty Measure,” which considers the costs of essentials like housing, child care, and food, as well as the value of safety net programs and after-tax income like tax credits and COVID-19 relief payments.
Health insurance data shows gaps remain — and could get bigger
The ACS data for 2022 found 6.6 percent of Mainers — approximately 90,000 people — were without any health insurance coverage. While slightly higher than the share in 2021 (5.7 percent), it is well below the 8 percent (106,000 people) without coverage in 2019, before the pandemic. The decline can be attributed to several factors. One is the expansion of Medicaid in Maine, passed by voters in 2017, but not implemented until 2019. Many previously uninsured individuals now qualify under the expanded eligibility guidelines. Expanded Medicaid enrollment was also aided by pandemic emergency provisions. Most notably, the temporary “continuous eligibility” provision meant anyone enrolled in MaineCare (Maine’s Medicaid program) would not lose coverage, even if their income rose. Between March 2020 and March 2023, enrollment in MaineCare rose from 293,000 to 416,000, according to Maine DHHS data.
Because the continuous eligibility period overlapped with the roll-out of expanded MaineCare under the Affordable Care Act, it’s difficult to know how many of the new enrollees will be deemed ineligible as Maine DHHS begins the process of “unwinding” the continuous eligibility provision over the coming months. So far, DHHS has taken a thoughtful approach to ensure as few people as possible are disenrolled for paperwork mistakes, and as many as possible are connected to new health insurance through mechanisms like the ACA marketplace. So far, only 1,208 Mainers have been deemed ineligible for continued coverage, though another 35,000 people have their eligibility pending. Maine’s approach contrasts with many other states nationally, where millions of people have lost coverage, up to three quarters of which have been for procedural reasons (like paperwork errors).
The full impact of both Medicaid expansion and the public health “unwinding” may not be known until the ACS data for 2024 is released.
The health insurance coverage data also highlights some continuing challenges for policymakers in Maine. While the number of uninsured Mainers was near historic lows, there were still significant gaps, even with pandemic protections in place. The 90,000 individuals without insurance coverage is significant — and it includes around 12,000 children, for whom gaps in health care can have lifelong consequences, and almost 19,000 people whose income should have qualified them for MaineCare coverage. Some of these gaps could be addressed with better outreach to vulnerable groups.
Minimum wage and strong labor market softened inflation hardships
The ACS data on household incomes reflects two competing pressures on the value of wages — a strong labor market and recovery from the pandemic, which pulled wages up, and high levels of inflation, which eroded their real values. For example, the median household income in Maine increased 18 percent between 2019 and 2022 — but over the same time, the inflation rate was 14.5 percent, resulting in a “real-terms” income increase of just over 3 percent over three years. However, the typical Maine household was better off than households nationally, where median household incomes fell in real terms by 0.6 percent over the same period.
In fact, Maine households across the board fared better than their peers nationally, with most groups seeing a real-terms increase in incomes since before the pandemic, and all groups outperforming the national trend. However, notably, Maine households with the lowest incomes still saw a 5 percent real-terms decline in incomes over this period — not as much of a decline at the national level for the comparable income group, but still significant.
Maine’s strong labor market likely helped Mainers in the lower-middle portion of the income distribution. Not only did wages increase generally over the period (see below), but the share of the working-age population working full-time and year-round remained consistent. Likewise, Social Security incomes are indexed to inflation and automatically keep pace with the cost of living, so households receiving Social Security were largely insulated from the effects of inflation.
It’s not immediately clear why the poorest households fared so badly during the pandemic and recovery period, especially compared to other income groups. The lower fifth of households has an average income of just under $16,000 a year and is more likely to be composed of households without access to programs like Social Security and with limited opportunities for employment.
Trends in earnings show that for Mainers who were working, wages increased faster than inflation at all income levels between 2019 and 2022. The largest wage gains were among workers in the bottom half of the income distribution (people earning less than roughly $18 per hour in 2019). Two factors contribute to this. First, as companies rehired workers in the wake of the pandemic, low-wage service industries in particular had to offer higher wages to remain competitive.
Second, workers in this group were more likely to be impacted by Maine’s minimum wage, which is automatically increased each year to account for inflation. While the share of Mainers who are working at or near the minimum wage has decreased as a result of employers voluntarily raising wages in a tight labor market, the minimum wage remains an important tool for ensuring no workers are left behind.
Poverty rates impacted by policies providing relief and support
The Census Bureau publishes two measures of poverty. The “official” poverty measure is derived from the ACS and determines whether a household’s total regular annual income is above a certain threshold. In 2022, the poverty line for a family of three was a little over $17,000.
However, the official measure has a simplistic view of poverty, being ultimately derived from the food budget of a typical household in 1963. It also does not consider expenses for different family types and locations, such as housing, transportation, health insurance, and child care. Nor does it include certain kinds of income. Most notably, it does not include the impact of one-off payments (like COVID-19 relief money), tax credits (like the child tax credit), or the monetary value of in-kind programs like the Supplemental Nutrition Assistance Program (SNAP) or MaineCare. To address these shortcomings, the Census Bureau also publishes a more comprehensive Supplemental Poverty Measure, based on a different survey. Unfortunately, because of the smaller size of this sample, data for the SPM for Maine is not generally reliable for year-to-year comparisons. However, it can be used for comparisons over longer time periods.
Regarding the official poverty rate, the ACS data reflected the diverging experience of the lowest-income households and the remainder of the population. While there was no statistically significant change in the number of Mainers below the poverty line in 2022 compared to 2019, the share of Mainers living in deep poverty (on incomes less than half the official poverty level), grew slightly, from 4.0 percent in 2019 to 4.9 percent in 2022. On the other hand, there was a substantial decline in the share of children living in poverty between 2019 and 2022 — from 13.8 percent to 11.7 percent — around 5,000 fewer children in poverty. For children under 5, the decline was even greater, from 17.1 percent in 11.3 percent in 2022. For both groups, that’s the lowest share recorded in Maine going back to the beginning of the ACS data in 2001. Here again, wage increases for workers with low wages may have played a significant role; prior MECEP research has found a disproportionate number of parents work in low-wage jobs and increases in those wages can significantly reduce child poverty.
In the Supplemental Poverty Measure data, too, there were positive trends for Mainers. Nationally, the most noticeable datapoint was a spike in child poverty under the supplemental measure between 2021 and 2022, reflecting the expiration of the expanded child tax credit. This caused about 3 million children nationally to fall below the supplemental poverty line in 2022.
Such granular data is not available for Maine, but the Census Bureau does publish a three-year estimate for the average supplemental poverty rate in the states between 2020 and 2022. This measure found Maine had the lowest poverty rate of any state during this period. Just 4.6 percent of Mainers — around 63,000 people — were in poverty using this expanded definition during that period. Nationally, the rate was more than twice as high, at 9.8 percent.
What’s more, while national supplemental poverty rates remained consistent between 2019-21 and 2020-22, they declined substantially in Maine, a divergence from the typical pattern in which changes in Maine’s supplemental poverty rate track national trends closely.
One reason for the significant decline in poverty in Maine compared to the rest of the country could be relatively robust pandemic relief measures. Mainers received three separate COVID-19 relief payments — $285 between November 2021 and April 2022 for people with employment earnings; $850 in 2022; and $450 in 2023. The payments in 2021 and 2022 in particular appear to have brought a significant number of Mainers out of poverty in this period. (Most states did not send out relief payments, so the national data largely does not reflect state payments.)
To a smaller extent, the trend in Maine also reflects recent changes to the state tax code. In particular, the creation of the property tax and sales tax fairness credits, and the refundability of the state’s earned income tax credit, have allowed more Mainers with low income to receive refunds on their state taxes. Before 2016, virtually all Mainers paid more in combined state taxes (including income, sales, and property taxes) than they received in credits. However, in the period 2016-2019, around one in eight Mainers (13 percent) received a net rebate. And during the pandemic period, helped by one-time relief payments, that share doubled to more than one in four (almost 27 percent).
Some of that progress will continue into the 2023 tax year, with changes in the last legislative session making Maine’s child tax credit more available to families with low income.
In addition to using revenue from taxes to provide tools and opportunities to people and communities, Maine tax policy has also ensured these supports are funded by taxes from those who can afford to contribute. Part of ensuring more Mainers have resources to afford necessities is reimbursing people with low income for taxes they pay and increasing their income through refundable credits and rebates.
It’s worth noting while the one-time relief payments appeared to help lift thousands of Mainers out of poverty in 2021 and 2022, the untargeted nature of the payments meant much of the money went to people who did not need it so urgently. And because the payments were non-taxable, the state missed an opportunity to retrieve some money from people who needed it least. Between the three programs, Maine spent almost $1.3 billion to reach up to 800,000 residents. According to the SPM data, those efforts helped move around 10,000 Mainers out of poverty. However, reducing the number of recipients would have allowed larger payments to have more impact. By contrast, the recent expansion of the state child and dependent credit cost $29 million a year to reach 100,000 of the most vulnerable children and dependent adults.
As MECEP pointed out in this Bangor Daily News op-ed, the changes in income, poverty, and health show the decisions made by elected officials matter. Good public policy — like the child tax credit, earned income tax credit, MaineCare, and SNAP — creates well-being and opportunity for people and makes our economy more resilient.