(Augusta, ME) The Maine Center for Economic Policy (MECEP) released today the State of Working Maine 2005 report, by Edmund Cervone.
The Maine economy has improved at a modest pace over the last four years and has performed well relative to New England and the nation. Gross State Product grew 10.6%, employment numbers are up, personal income increased, unemployment remained at or below national figures, and exports hit an all-time high. Despite these positive trends, challenges remain. The workforce is aging, manufacturing jobs continue to disappear; there is inequitable income growth; employer-provided benefits are on the decline; regional disparities exist, and the Brunswick Naval Air Station is slated for closure. In order to ensure continued economic growth, Maine must address these challenges and ensure that segments of the workforce are not left behind.
The structure of the workforce is changing. Baby boomers begin retiring in 2011 and will vacate more technical and managerial positions than the current workforce can fill. Many who lost manufacturing jobs found they must often switch to lower-paying service sector jobs. There also appears to be an increase in single-earner households (e.g.: retirees and single parents raising children). Over 2,000 military jobs will leave Maine with the closing of the Brunswick Naval Air Station. These changes could have negative affects on the economy.
Despite growth in personal income and the median wage, segments of the workforce continue to find it difficult to make ends meet. Lower wage earners experienced the least amount of growth in their wages. Within Maine, geographic differences (rural and coastal) amplify these disparities. Some workers, particularly single parents raising children, are not making enough money to pay for things such as food, rent, and medical care. This situation will deteriorate as more private-employers cut health and pension benefits and will be further aggravated if federal budget cuts limit the ability of publicly funded programs like Medicaid to provide assistance.
Training will be essential for a healthy transition in the workforce. Maine still lags behind the region and the nation in workers with postsecondary education and training. Such training will be needed for the current workforce in order to fill the vacancies left by retiring baby boomers and for those workers making the shift from the manufacturing to the service sector. Without this investment, Maine is at a disadvantage when competing for new industry that pays livable wages, attracts new workers to the state, and grows the economy. Until this happens, lower income earners would be aided by tax reform that decreases their tax rates and by programs like MaineCare and Dirigo Health.
“Maine can be pleased with recent positive economic trends. However, the state must do more to create an environment where all Maine workers can realize success,” said MECEP policy analyst Edmund Cervone.