In the five years since the depth of the Great Recession, Portland’s metro area has led the state in economic resurgence. But the extent of the city’s dominance in the state’s job growth comes as a surprise to some, and not necessarily a good one.
Portland has added nearly four out of every five new jobs in the state in the past five years, according to recent data from the U.S. Bureau of Labor Statistics.
The Portland metro area, which encompasses an area from Freeport to Kennebunk, has added 8,900 jobs from January 2010 to April 2014, reaching its prerecession level. The rest of the state has added only 3,500 during the same time period. However, more than half of those jobs are in the Bangor area, with another 900 coming from Lewiston-Auburn — which means the rest of the state outside those three metro areas has added roughly 700 jobs in the last four years.
“It’s a bigger number than I would have guessed,” said Chris Hall, CEO of the Portland Regional Chamber of Commerce, of the number of jobs created in the Portland area.
But that number isn’t necessarily a cause for celebration. He called it “unhealthy.”
“We need economic growth distributed more broadly across the state,” Hall said. “Why does the Portland chamber guy care about that? Why doesn’t he want all the jobs? Well, when you look at the state’s economy as a whole the consequence of a lack of growth in the northern and eastern parts of the state hurts Portland, it doesn’t help.”
Portland is inexorably linked to the rest of the state, Hall said. Maine companies, no matter where they are located, will often work with suppliers and partners in the Portland area. If companies in rural Maine aren’t healthy, then that hurts Portland in the long run, he said.
Joel Johnson, chief economist for the Maine Center for Economic Policy, keeps a close eye on the monthly data releases from the BLS. He wrote a brief blog post on May 29 about Portland receiving a disproportionate number of new jobs in the state.
“I don’t think it’s surprising,” said Johnson, who also sits on the state’s Consensus Economic Forecasting Commission. “I mentioned in the post that you’re going to expect this as we continue to see manufacturing jobs erode. That’s a long-term trend that stands across multiple business cycles.”
In addition to the loss of manufacturing jobs – the state has lost nearly 20 percent of its manufacturing jobs in the past decade – rural Maine is also impacted by the loss of 900 jobs in government sectors since January 2010 and a lack of the stronger recovering sectors like professional and business services.
While Portland has recovered all the jobs it lost since January 2008, rural Maine – the area outside the Portland, Bangor and Lewiston-Auburn metro areas – still has 13,700 fewer jobs in April 2014 than it did at that time.
In the Portland area, three sectors are fueling the jobs recovery: health care, education and professional and business services.
Of those 8,900 new jobs created since January 2010, 3,300 of them (or 37 percent) are in professional and business services, which includes service-related jobs in accounting, law, engineering and information technology. Another 3,200 new jobs in the Portland area (or 36 percent) have been created in the educational and health services sectors. Baxter Academy, the new charter school in Portland, and Intermed, a health care company with physician practices in Portland, South Portland and Yarmouth, reflect the trend.
Intermed has added roughly 15 jobs during the last five years, according to CEO Dan McCormack.
Baxter Academy created 17 jobs before it welcomed its first class last September, according to Michele LaForge, Baxter’s head of school. LaForge is now in the process of hiring another 11 people to expand the school next year.
The data reflects the changing nature of state economies, according to Johnson. Cities have always been service centers for the surrounding regions, but the trend in Maine is that more of those services, including health care, are moving from the rural areas to the cities. For instance, escalating costs to deliver health care in rural settings is causing some physicians to close rural practices and align with city hospitals.
“I think it partially reflects a new reality in economies across the nation and across the globe,” Johnson said. “Portland is becoming a more and more important to Maine’s economy, and not just Portland, but our other metro areas, as well.”
The challenge for rural areas is how to remain vibrant in the face of these broader trends, Johnson said. That’s not a new dilemma, but one that will continue to be important for Maine to figure out.
“In the short run, we’ll continue to see a slow recovery in the rural areas, but in the long run this is the kind of thing that’s going to continue to pose challenges in terms of having high-quality job opportunities that can support a family and pay a livable wage in rural areas,” he said. “That’s not news. People have been thinking about these issues for a long time.”