The latest labor force numbers from the Maine Department of Labor are positively frightening.

In February 2015, Maine’s labor force – meaning people either holding a job or actively looking for one – stood at 690,659. That’s a drop of more than 3,000 just from December 2014, and it marks the 18th month in a row that the number has dropped.

As recently as August 2013, the state’s labor force stood at 708,709. Since that time, the number of Maine people holding a job has increased by 6,334 while the number of people in the labor force has fallen by more than 18,000.

Such changes are great for the unemployment rate. It has dropped steadily from 8.3 percent in July 2009 to 5.0 percent last February. But such changes can’t continue forever. Indeed, the February 2015 numbers may mark an important inflection point. The number of Mainers holding a job in February actually dropped slightly and the unemployment rate still declined. Why? Because the labor force dropped by so much more.

Perhaps this change is just a statistical blip combined with the disappearance of seasonal holiday jobs. But then again, perhaps it isn’t.

Between the end of the dot.com bust in early 2002 and the subsequent peak just prior to the financial crash in spring 2008, employment in Maine grew by over 24,000 – an increase of 3.7 percent. But, over the same period, our labor force grew by nearly 31,000 – an increase of 4.6 percent. Economic recovery both increased the number of jobs and drew more people into the labor force.

In the recovery from the Great Recession of 2008-10, our story is markedly different. Between spring 2010 and fall 2013, Maine gained 25,637 jobs. This wasn’t enough to bring us back to our 2008 peak employment, but was still a gain of 4 percent. Over the same period, however, our labor force increased by only 15,308 – an increase of just 2.2 percent. In other words, the relative pattern of recovery from the earlier recession where employment growth brought forth an even greater increase in the labor force was directly reversed. In Maine, recovery from the Great Recession has seen – at least so far – greater growth in employment than in the labor force.

And over the last year and a half we’ve been seeing the sorry results. While recovery in the U.S. as a whole continues, albeit slowly, in Maine we’re moving in the opposite direction. Employment and labor force have both been falling for a year and a half.

This disturbing trend speaks clearly to the need to think differently about economic development policies. We can’t, as we have for generations, simply wait for the national economy to eventually lift all our boats. The national tide is rising, yet many of our boats seem more deeply stuck in the mud than ever. Indeed many of their skippers have left.

If we are to escape the ever-increasing fiscal pressure that this demographic and economic imbalance is forcing on us, we simply must build and attract more employment creating enterprises and the people to work in them.

Charles Lawton is Chief Economist for Planning Decisions, Inc. He can be reached at:

clawton@planningdecisions.com

Copy the Story Link