Some say we must study history to avoid past mistakes. Others say the best we can do is listen for history’s footsteps and try to jump on as it rushes past.

In either case, it is interesting to see if there are any lessons to learn or footsteps to hear by examining Maine’s path through the last three recessions.

In the early 1980s, Maine’s total wage and salary employment fell for two years, but recovered rather quickly. Total employment fell from its 1980 peak in both 1981 and 1982, but by the end of 1983, employment had already surpassed its 1980 peak.

And five years after the 1982 low point, employment was up 17 percent.

For the Greater Portland area, there was no recession.

Wage and salary employment grew right through 1981 and 1982. 1987, five years into the recovery, employment in Greater Portland was fully 27 percent greater than in the recession trough of 1982.

In the 1990-91 recession, the employment drop was longer and the recovery slower, both for the state as a whole and for Greater Portland.

Wage and salary employment in Maine fell from its 1989 peak for three full years. And it didn’t recover that peak until 1997.

In the 1990s, five years of recovery merely got us back to the level we had in 1989. And this recession did hit Greater Portland.

In fact, from the 1989 peak to the 1992 trough, employment in Greater Portland fell more in percentage terms than in Maine as a whole.

But again, the recovery was stronger in the Portland area. 1997, employment in Greater Portland was up 9 percent from its 1992 trough compared with an increase of only 6 percent for the state as a whole.

The 2001 recession was short and the recovery quick, but the different regional patterns remained the same.

Employment in both Maine and Greater Portland fell from its 2001 peaks during 2002 and had fully recovered those peaks by 2003.

However, five years into “recovery,” total employment in Maine was up only 2 percent from its low point while employment in Greater Portland was up 4 percent.

In short, this brief economic history makes two points.

First, recovery from economic recession has become progressively more anemic in both Maine and Greater Portland.

In Maine as a whole, the level of five-year employment recovery from the depth of the recession has dropped from 17 percent in the 1980s to 6 percent in the 1990s to 2 percent in the 2000s.

For Greater Portland, the equivalent rates are 27 percent, 9 percent and 4 percent.

Clearly this historic pattern does not augur well for job creation over the next five years, presuming 2009 was the low point of this most recent recession.

The second point to be drawn from this quick glance at our economic history is that, weaker though it may be becoming, Greater Portland is our best hope for economic recovery.

Four percent of Greater Portland’s current employment is just as large a number as 2 percent of Maine’s total employment.

If through investment in higher education, job training, school improvements and infrastructure, we could push that employment growth even to 5 percent, it would do more for the state as a whole than current policies.

In short, whatever effort we as a state put into building our capacity for economic growth, Greater Portland is where we’ll get the greatest bang for our buck.

In formulating our economic development strategies for the future, we can continue the nonpolicy, which was criticized in the 2006 Brookings Report on Maine’s economic prospects, of spreading our resources all over in thin little dollops of cash here and there, gaining political tranquility but accomplishing very little economically.

Or we can face the facts of our global economic reality and make the commitment to focus our development resources on the area of the state where we stand some chance of altering the slow growth trend that now seems to be our economic destiny.

 

Charles Lawton is senior economist for Planning Decisions, a public policy research firm. He can be reached at:

[email protected]