Glass half-full? Or glass half-empty? That’s the takeaway from Charlie Colgan’s latest New England Economic Partnership forecast for Maine. The good news? Maine has seen several quarters of job growth; that’s better than the up and down pattern of the past several years. The bad news? Maine in not likely to regain its pre-recession employment peak until 2018.
One problem with this Goldilocks – not too hot, not too cold – recovery is that it has a tendency to lull us into missing underlying changes not evident in the overall jobs number. “A couple of thousand more jobs,” we say, “I guess things will just stay pretty much the same.”
Well, not really. Consider for a moment the Department of Labor’s 2010 to 2020 jobs forecast – a broader look at underlying changes that doesn’t attempt to measure the cyclical ups and downs that is the focus of Colgan’s NEEP forecast. Over the entire decade, 2010 to 2020, the DOL forecast calls for an average annual total of new job openings in Maine of 4,361. But it also calls for an average annual total of 15,146 replacement job openings for a total of 19,507 total new openings each year.
Obviously, we haven’t come close to that number over the past several years precisely because of the cyclical downturn and slow recovery of the past several years. But the underlying point remains the same – a small change in the overall total masks lots of underlying turmoil. In Maine, across all occupations, the job openings attributable to replacement account for 78 percent of all openings. For the U.S. as a whole, the figure is 63 percent.
In short, slow growth doesn’t mean no change. Many businesses across the state may not expect – or even want – more growth. But most also don’t want no growth or decline. And to avoid that fate, they must replace workers who leave, retire or die. And without a ready line of junior employees ready to move up or potential new employees ready to move in, those companies are going to (or already do) face a severe labor constraint.
And this constraint will confront even occupations where no growth is projected. In production occupations – where DOL projects a net loss of nearly 3,000 jobs over the decade – there will still be a demand for nearly 800 replacement workers. In architecture and engineering occupations, where total employment is expected to drop by 144, there will still be a replacement demand for 200.
Obviously, the easiest way to meet this replacement demand is to keep existing workers on the job longer. And that is certainly a pattern that is becoming more the norm given the impact of the recession on retirement expectations. But even if the labor force participation of those over 65 doubled, it would not provide a sufficient number of new workers to meet Maine’s projected replacement demand.
In 16 major occupational categories, ranging from farming, fishing and forestry occupations to installation, maintenance and repair occupations to arts, design, entertainment, sports and media occupations, Maine has a replacement share of total job growth that exceeds the comparable national average. In these categories, more than 70 percent of expected job openings will be generated not by overall business growth but by replacement needs.
If we don’t begin to look at our labor force succession planning, Maine will face a future not of the no change type that many of us have come to think of as “just right” but of the collapsing from the inside type that many of our smallest rural communities face today. We can’t afford to mistake no job growth with no change in the labor market. Beneath the outwardly calm surface lies a cauldron of future change.
Charles Lawton is chief economist for Planning Decisions, Inc. He can be reached at: