Tuesday September 10, 2013 | 12:06 PM

 

 Yesterday's "Maine By the Numbers" box ran a surprising and seemingly disheartening bit of data:

Maine by the numbers

A daily snapshot of the state's economy

AVERAGE HOURLY EARNINGS

Hourly earnings for nonfarm workers in the Portland/South Portland/Biddeford metro area in July 2013

$22.21

Hourly earnings for nonfarm workers in the Portland/South Portland/Biddeford metro area in July 2012

$23.10

- Source: Maine Department of Labor

Given the conventional wisdom that we're in an economic recovery, this bit of data seemed counterintuitive and disappointing. What's going on here?

I went to the source data from the Maine Department of Labor's Center for Workforce Research and Information to get a more complete view of the same data going back to July 2009:


 

Source: Maine Department of Labor (download the raw data here)

These numbers aren't "seasonally adjusted" — there are slight dips in wages every summer, and peaks in hours worked, due to a large influx of minimum-wage high schoolers coming into the workforce for summer jobs. But even if you account for that, this year's average wages are generally down from last year.

I dug around some other data from the Department of Labor and found one possible explanation for this — possibly even a silver lining to the news that wages are down. 

Here's another chart, showing employment trends (also not seasonally adjusted) for the past four years. The blue line is the "civilian labor force" for the greater Portland labor market area, including Biddeford and Saco. This is the population of people who have jobs or are looking for a job, are at least 16 years old, are not in the military and are not institutionalized. The people eligible to work in the economy, in other words. The red line is the number of people who are actually employed.

Source: Maine Department of Labor (download the raw data here)

Note that every year, employment bottoms out in February, then climbs up again to a summertime peak. And for the last four years, around 7,000 or 8,000 people come back into the labor force sometime between February and July, while employers add between 10,000 and 12,000 jobs in the same period. 

Except this year. This year, the labor force steeply increased by over 11,000 people, a lot more than in previous years. And the greater Portland labor market found more than the usual number of jobs for those workers — we added nearly 13,000 new jobs between February and July. 

So our workforce and our employment grew more quickly than usual this spring — which is undoubtedly good news. 

But I suspect that this is also what's behind the decline in wages compared to last year. More workers means more competition — which means that firms can pay lower prices for workers' labor. In past years, there were generally about 1.5 new seasonal jobs for every new seasonal worker who joined the workforce. This year with so many new seasonal workers coming into the workforce, there were only about 1.2 new seasonal jobs created for every new worker. So, firms had more bargaining power, and wages went down. 

 

 

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I'm an economics wonk and an online content producer for the Portland Press Herald.

You can get in touch with me by emailing cmilneil [at] mainetoday.com, or by calling 791-6307, or by following @vigorousnorth. Also check out my business and economics list on Twitter.

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