Imagine where Maine would be without Greater Portland. Between 2000 and 2012, total employment in Maine grew by 2 percent. But this average was the result of a growth of 7 percent in the Portland metro area (York, Cumberland and Sagadahoc counties) and a decline of 1 percent in the rest of the state. For wage and salary employment, the differential was 2 percent growth in metro Portland and a 4 percent decline in the rest of the state. For self-employment, the numbers were better but still starkly different – a 31 percent increase in metro Portland compared to an increase of 10 percent in the rest of the state.
For total earnings from work, the same pattern held true – a 50 percent increase in metro Portland compared to a 36 percent increase in the rest of the state. The only category where the non-Portland area outpaced metro Portland was in commuting. The adjustment to account for earnings in one area earned outside that area grew by 68 percent compared to only 53 percent in metro Portland. In other words, more non-Portland residents traveled outside their area to earn their incomes.
The only area where income growth was comparable between the two areas was unearned income. The now-infamous transfer receipts (call it welfare or not) increased 113 percent in metro Portland over the period and 110 percent in the rest of the state. Similarly, property income from dividends, interest and rent increased by 37 percent in metro Portland and 35 percent in the rest of the state.
In a word, Greater Portland is increasingly becoming the economic engine for the entire state – in the income earned by its residents, in the income provided to nonresidents who commute there to work and in the taxes paid on that income that help fund statewide services.
The implication for all Maine residents and for state economic policy makers should be clear. Economic development is not a zero sum game. Policies that help generate job growth in metro Portland do not take resources from the rest of the state – they help build the state. The more economic policies either focus on spreading resources in small amounts evenly across the state or, even worse, degenerate into inter-regional squabbles that result in no action, the only winners are the states where Mainers who can’t find jobs here migrate in search of better opportunities. The choice we face is not between parts of Maine, but between anyplace in Maine and anyplace else in the world.
Indirectly, therefore, these intra-state trends highlight the need for scale. Maine needs not just more self-employed sole proprietors (they are certainly great, and their contributions to growth should be applauded), but more self-employed entrepreneurs that grow to become small employers, then large employers and then world leaders. Maine needs enterprises of large scale because they create not just jobs for the people who work for them, but, perhaps even more importantly, because they create demand for existing businesses and still more startups. Over time, large businesses – through both the backward linkages of their supply chains and the forward linkages of their delivery to customer systems – create sales opportunities for separate enterprises.
And herein lies another reason for the importance of metro Portland – its commercial density. Businesses located here create more opportunities for other businesses located here, if for no other reason than that they know one another, bump into one another, get to learn about their successes and failures, to share opportunities. Any and all such exchanges in metro Portland have a vastly greater probability of creating a job in rural Maine than the same exchange in Raleigh, North Carolina, or Austin, Texas, or even Boston. The more buzz we generate in metro Portland, the more we can pollinate our rural periphery.
Charles Lawton is chief economist for Planning Decisions Inc. He can be contacted at: