Decline in health tied to decline in workforce

September 4, 2017

People of prime working age have dropped out of the workforce at levels not previously seen by labor economists, especially outside greater Portland. According to a forthcoming study by the Maine Center for Economic Policy, just under 30 percent of 25- to 54-year-olds without a college degree in rural Maine have dropped out of the workforce, twice the 15 percent rate in 1997.

View the Lewiston Sun Journal editorial on line here

With Maine’s unemployment rate near historic lows, and the state’s economic output climbing back to pre-recession levels, there is a lot to celebrate this Labor Day. But what about the people that the unemployment rate doesn’t count?

People of prime working age have dropped out of the workforce at levels not previously seen by labor economists, especially outside greater Portland. According to a forthcoming study by the Maine Center for Economic Policy, just under 30 percent of 25- to 54-year-olds without a college degree in rural Maine have dropped out of the workforce, twice the 15 percent rate in 1997.

 

Clearly this is a product of the changing Maine economy, in which thousands of good-paying jobs have disappeared, replaced with low-paying jobs in retail or tourism. But intertwined with the loss of manufacturing jobs is a question of declining health.

Sickness, including chronic conditions like diabetes, is the top reason people give for stopping their job search, according to U.S. census data evaluated in the study. That rate has climbed steadily since 2011, even though the rate of people who receive disability income from the government has not changed.

It’s easy to see how these two trends are connected. Rural Maine has lost 40,000 middle-income jobs since 2011, and they have mostly been replaced by low-wage jobs. The new jobs often don’t provide health insurance, sick days, paid vacation or incomes that keep families out of poverty. And there is ample evidence to show that being poor is bad for your health.

People with incomes under $25,000 a year are twice as likely to smoke as people whose incomes are higher than $25,000. They are almost three times more likely to have diabetes, and 30 percent more likely to have high cholesterol. They are also twice as likely to report being depressed, abuse alcohol and drugs and have a much higher suicide rate.

It’s important to remember that workers lost more than income when the local paper mill shut down. They also lost health insurance for themselves and their families.

Getting sick is not just a result of long-term unemployment, it’s also something that will keep you unemployed.

Expect this dynamic to interfere with Maine’s economic growth in the years ahead unless there are changes in the way health insurance is provided. Businesses report being unable to fill good-paying jobs that require high levels of education and training. But those jobs won’t be filled if prime age workers keep dropping out of the labor force.

Relying on employers to provide health insurance worked well when jobs were stable and people could work their whole careers in one place. But today’s economy requires workers to be more nimble. Health coverage that does not end when the job goes away is essential if we are going to have workers who can retool themselves and apply themselves to new lines of work.

On Labor Day, we should celebrate the great strides made by American workers, but we should not forget those who are being left behind. Health care should be considered part of any economic development plan.

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