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Charles Lawton: Labor numbers show that to get to recovery, Maine has a job to do

Looking at the local area employment statistics from the Maine Department of Labor for Maine as a whole, a straightforward picture of the business cycle emerges. From 2001 through 2007 -- the expansion phase of the last national business cycle -- employment in Maine grew by 15,606 jobs. From 2007 through 2009 -- the contraction phase of the cycle -- employment in Maine fell by 25,116. Then from 2009 through 2010 -- at least the beginning of the expansion phase -- Maine added 789 jobs. If not boom and bust, at least sputter, bust, sputter.

But drill down to the county level, and a different picture emerges. During the 2001-07 expansion phase, six Maine counties (Franklin, Knox, Piscataquis, Somerset, Waldo and Washington) actually lost a total of 3,028 jobs. Thus Maine's expansion phase gain of 15,606 jobs was actually the net result of combining a gain of 18,634 jobs in 10 counties offset by the loss of 3,028 jobs in six other counties.

For the contraction phase, the picture shows that no such distinction is needed. No one escaped the Great Recession. The statewide loss of 25,116 jobs was spread across all 16 counties, from a high of 5,283 jobs lost in Cumberland County to a low of 321 lost in Franklin County. The national bust was a bust for everyone in Maine.

For the recovery phase, the picture again turns mixed. Maine's net gain of 789 jobs is really the net result of a gain of 2,284 jobs in 10 counties offset by the loss of 1,495 jobs in six counties. Three of these six counties (Franklin, Somerset and Washington) were also among the six that lost jobs during what was, for them, a so-called expansion phase of the business cycle. These three counties, at least in aggregate, escaped the business cycle entirely -- they lost jobs throughout the whole cycle. Another two counties -- Knox and Piscataquis -- saw marginal gains in employment in the 2007-09 expansion, but not enough to offset the continuing expansion of unemployment. For these five counties, the appropriate term may well be depression, not recession.

The cumulative effect of job loss in these five counties has not merely been an increase in the number of unemployed but also a decline in the labor force.

In these five counties over the entire 2001 to 2010 period, the number of unemployed increased by more than 3,700 and the number of people in the labor force declined by more than 2,300. Some of this decline is simply the result of retirement (voluntary or forced) and thus a reflection of our aging population. Much, however, is the result of emigration. Those unable to find jobs near home have moved away to seek opportunity elsewhere. These changes are more than cyclical fluctuations to be picked up in the next expansion phase; these are fundamental structural changes in the nature of the economy.

They are also omens for the state as a whole -- paths we must try not to follow. For Maine as a whole, employment grew by nearly 16,000 over the 2001-07 expansion. Over the 2007-09 contraction, we lost more than 25,000 jobs, and our labor force fell by more than 800. In the 2009-10 expansion, we gained fewer than 1,000 jobs, and our labor force continued to fall, dropping by nearly 1,200.

This is not an encouraging sign for recovery and underscores the fact that the central challenge we face is not simply job creation, but job creation for young people who can help offset the otherwise inevitable continued decline in our labor force. Without demographic sustainability, we will never be able to attain any significant degree of economic recovery.

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

clawton@maine.rr.com