Maine’s Lack of Population and Job Growth Tamps Down Growth in Wages and Salaries

Today’s data release from the Bureau of Economic Analysis shows Maine’s personal income growth kept pace with the nation and the region in the second quarter of 2014, but Maine’s lack of population and job growth will make it difficult for the state to keep up over the long run.

Personal income is the sum of wages and salaries, fringe benefits, bonuses, income from investments, “pass through” income from businesses, and transfer payments like social security checks and Medicare and Medicaid payments.


Wages and salaries are the biggest single component of personal income, but Maine’s growth in wages and salaries in recent years trails the nation and the region and ranks near the bottom of states.


The slow growth in wage and salary income should be no surprise considering Maine’s lack of job growth, which in turn is due at least in part to the state’s lack of population growth and aging workforce. It is Maine’s aging population that receives Social Security and Medicare benefits who are largely responsible for Maine’s higher percentage of transfer payments.

It’s important to keep in mind that income for typical Maine households hasn’t grown at all in recent years and remains below pre-recession levels. The growth in total wages and salaries shown in the chart above mostly accrued to wage and salary earners in the upper half of the income distribution, and it isn’t adjusted for inflation.

Barring more job growth and/or population growth, we can expect Maine’s slow growth in wages and salaries to continue. With wages and salaries making up the largest component of personal income, it’s going to be hard for Maine’s total personal income growth to keep up with the nation’s over the long run.