Within a decade, 210,000 Mainers ages 55-64 will become eligible to retire. We have just 155,000 children ages 10-19 waiting to take their place. That means our working-age population could soon shrink by more than 50,000.

The potential impact on Maine businesses will be significant. As the Baby Boomers retire, businesses will have more and more difficulty finding employees, even if all of today’s children grow into healthy, skilled, fully contributing members of the economy.

That is unlikely. Roughly one-fifth of Maine children – and one-fourth of children under age 5 – are living in poverty. Based on past trends, the likelihood of them becoming high-performing workers is low.

A growing body of research shows that the instability and insecurity of poverty can have lifelong effects on brain development.

Insecurity triggers the release of stress hormones that, if sustained, can permanently alter how the brain functions.

The insecurity of poverty doesn’t come necessarily from abuse or neglect.

It’s from the anxiety children feel living in a car or a rowdy low-rent apartment building, of homelessness, of not knowing when the next meal will come, of bouncing from school to school as parents search for work. The brain’s response to those stressors can have lifelong consequences. (For a summary of the scientific research on childhood poverty, see “How poverty affects the brain” by Erika Hayasaki, Newsweek, Aug. 25, 2016).

Many poor children struggle to learn and succeed in the workforce. A five-decade study of U.S. children found that nearly half (43 percent) of those from poor households grew up to be poor adults; just 8 percent of children from wealthy households become poor adults.

These findings do not bode well for Maine businesses. Not only do they foretell rising poverty rates, but they also predict a growing pool of low-skilled workers at a time when Maine needs every high-skilled worker it can muster.

One-fifth of the 10- to 19-year-olds waiting to enter Maine’s workforce are living in poverty. That’s more than 30,000 who, based on current trends, will likely struggle to acquire the skills needed by today’s employers.

So, the aging of Maine’s population will leave our businesses short 50,000 workers. The poverty of Maine’s children could cost them another 30,000 potential skilled workers.

Some businesses may respond to labor shortages by automating or outsourcing some jobs. Some may be able to attract workers from other states or countries.

But many will face the disappointment of unfilled openings and missed opportunities that hinder their growth – and perhaps even their viability.

Are there any bright spots in this outlook? Yes.

First, our country has dealt with large-scale poverty before. In 1959, 35 percent of U.S. residents age 65 and older were poor.

Last year it was 9 percent. Millions of elderly people now live healthy, independent lives thanks to economic gains made during their working years and targeted government supports.

Childhood poverty has also declined since 1959 but only marginally, from 27 percent to 20 percent, where it has remained stubbornly since the 1980s. In Maine today, a child under 5 is three times more likely to live in poverty than their grandparents over age 65.

Maine’s demographic outlook creates urgency to ensure that every child grows into a fully capable and contributing adult. We know from our experience with the elderly that poverty is reversible. It takes a sustained effort and, yes, money, but it is possible.

The second bright spot is that investments in child poverty, if done well, benefit everyone and generate high rates of return.

Children gain economic security and eventual self-sufficiency; businesses gain skilled workers; and societies benefit from higher tax revenues and lower payments for things such as welfare, medical and unemployment benefits, and incarceration.

Philip Trostel, an economist at the University of Maine, has calculated that the rate of return to taxpayers on public investments in high-quality early childhood education is 7.5 percent per year; the return on a four-year degree from a public institution is 10.3 percent. Those are great investments.

There is a powerful coalition of Maine businesses and nonprofits building on common ground to address this problem. Sponsors include the Maine State Chamber of Commerce, the Maine Community Foundation and the John T. Gorman Foundation.

The initiative is well-named – “Invest in tomorrow: Solving childhood poverty is everyone’s business.”

 

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