Maine’s Department of Labor regularly publishes a list of Maine’s “Top 50 Private Employers.” It doesn’t list the precise number of employees for each firm, but ranks them in broad categories. In the most recent list, for instance, the top two private employers – Hannaford Brothers and Walmart/Sam’s Club – are listed in the 7,001-to-7,500 employees category. Those ranked 32 (Circle K) through 50 (St. Joseph Hospital in Bangor) are all listed in the 501-to-1,000 employee category. Assuming that each company has as many employees as the midpoint of its category, means that these “Top Fifty” companies employ approximately 90,000 people. Since Maine has more than 46,000 businesses providing approximately 495,000 jobs, it is clear that the “Top Fifty” are exceedingly important, providing nearly one in five of Maine’s nonfarm, wage and salary jobs.

The individual rankings are of no particular interest, but grouping by category of business reveals in stark fashion the industrial structure of Maine’s corporate economy. And the most striking fact here is the overwhelming importance of health care. Fully 14 of Maine’s “Top Fifty” employers are hospitals. Add associated service providers (Spurwink, Attendant Services, North Country Associates and Martin’s Point) and the total comes to 18 companies providing over 30,000 jobs. Taking a somewhat wider view by adding our insurance companies (Unum/Provident and Anthem), Idexx Laboratories, Jackson Lab and The University of New England on the grounds that they are all largely health care related and the total comes to 23 of the “Top Fifty” accounting for nearly 40,000 jobs. If a generation or two ago Maine could be called “The Paper Plantation,” today it could, with equivalent accuracy, be called “The Patient Plantation.”

The significance of this dependence is twofold. First, the plus or minus 40,000 jobs in these companies are virtually the definition of “good” jobs. They demand high levels of skill, pay high wages and include generous benefits – all qualities increasingly difficult to find in today’s labor market. And all hard evidence to those of the young who are paying attention that staying in school and learning skills that employers need is the best course for a prosperous life in Maine. The second significant fact about the health-care sector is that it faces a crisis over the next two or three decades that is at least as significant in its industrial arena as the crisis of globalization that has transformed our paper industry over the past two to three decades was in our manufacturing arena.

Dig into all the babble we’ve been hearing on the campaign trail about taxes and deficits and all the arguments about arithmetic sums that do or don’t add up and what one finds is the unsustainable course of the health-care sector. Already the state of Maine is behind in paying its obligations to the state’s hospitals by hundreds of millions of dollars. Regardless of the fate of Obamacare, the tsunami of aging baby boomers will inevitably drive up both the demand for and the cost of health care. If our fiscal policy response is to limit the payments made to providers serving the public insurance holders (Medicare and Medicaid), then providers will cease to take new patients, and we will move to a two-tier (public and private) health-care system. If, on the other hand, our fiscal policy response is to cover rising health-care costs by finding some combination of increased taxes and lower payments for other public services, we threaten the growth of employment in the rest of the economy and thus of our ability to sustain our health-care juggernaut.

Whatever the outcome of the policy debate that will begin in earnest (one can only hope) after this election has passed into history, Maine will be profoundly affected. In 2012, only three paper companies made Maine’s “Top Fifty” list, and collectively they employed fewer than 4,000 workers. We can only hope that a similar fate does not befall our health-care industry over the next generation.
 
Charles Lawton is chief economist for Planning Decisions Inc. He can be reached at:
[email protected]
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