April 15, 2012

Charles Lawton: Job growth in southern Maine will help entire state

Spring is here. The daffodils are up, the forsythia are blooming, and apple trees are budding. All across Maine, eager gardeners are raking leaves and poking in the dirt searching for evidence of blossoms to come.

In a similar fashion, economists across the country are poring over jobs reports from the Department of Labor and surveys from the Federal Reserve, searching for signs of recovery. Was last month's slowdown in employment growth just a bump in the road? Or was it a sign that employers are pulling back, waiting for more definitive evidence of growing demand?

Will rising gas prices keep consumers away from the shopping malls? Will the on-again, off-again European debt crisis ever really be solved? Such questions put forecasters and employers and investors and would-be employees in the same position as early-season gardeners -- hopeful, but searching for more signs.

In my own raking and digging, I see two hopeful signs. The first is the relatively faster rate of job recovery in the York and Cumberland county region compared to the state as a whole.

From the second quarter of 2008 to the second quarter of 2009, total employment in Maine fell 3.7 percent and in York and Cumberland counties it fell 3.5 percent. In 2010, it fell another 0.8 percent in Maine and another 0.9 percent in our two southernmost counties.

Moving ahead another year to the second quarter of 2011, Maine as a whole saw employment growth finally turn positive, but just barely, rising 0.1 percent. But in York and Cumberland counties, employment grew by 0.9 percent. Not exactly gangbusters, but far better than the state as a whole. And, more importantly, with this higher growth rate, our two southerly counties matched the growth rate of the Greater Boston metropolitan area.

And this brings me to the second hopeful sign. In an editorial last week, the Bangor Daily News cited research by Richard Florida and the University of Maine's own Todd Gabe asserting that "without a base of young, technologically savvy, artistically inclined, entrepreneurially driven people, business and wage growth stagnate." OK, nothing new here. But wait, the editorial goes on to say that this requirement for "a more densely concentrated labor force" "may lead Maine policy makers to think about encouraging business development in the Greater Portland and the Bath-Brunswick areas."

Yes, that's right, an editorial in Bangor suggesting a state policy supporting business development in southern Maine.

Now that's what I call a hopeful sign, just as the opening of the Southern Maine Community College Midcoast Campus at the former Brunswick Naval Air Station is a hopeful sign. And, even more significantly, just as the opening of a pre-engineering site on that campus run by the University of Maine's School of Engineering is a hopeful sign.

In 2005 to 2006, employment growth in York and Cumberland counties exceeded that of both Maine as a whole and the Metro Boston area. But from 2006-07 to 2009-10, the two-county growth rate fell back to tracking more closely the rate of Maine as a whole. And therein, I think, lies the dilemma.

Will the areas of Maine closest geographically to the base of technologically savvy and entrepreneurially driven people in Greater Boston become closer in social, educational, recreational and entrepreneurial ways?

Or, will state policy -- through intent or neglect -- continue our long-standing tradition of spreading the few development resources we have evenly across the state in politically satisfying but economically irrelevant ways?

If we follow the courageous suggestion of the Bangor editorialists and "encourage business development" closer to the creative core of New England, employment growth for Maine as a whole will gradually inch up from its current 0.1 percent annual growth toward the 0.9 percent rate of our southernmost counties.

If we don't, we'll see the same negative dividend we've always seen for the political benefits of giving everyone a little handout -- employment growth in southern Maine will regress toward the state's 0.1 percent rate.

Charles Lawton is senior economist for Planning Decisions, a public policy research firm. He can be reached at:

clawton@maine.rr.com

 

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