Maine has essentially reached full employment, especially in the state’s three metro areas.

“Effectively, we are over full employment,” said Charles Lawton, chief economist at the Maine consulting firm Planning Decisions.

The December unemployment rate in Portland was just 2.8 percent, making it one of only 25 metro areas in the country – out of 387 – with a jobless rate below 3 percent. Only 5,602 people were jobless in the Portland metro area out of a workforce of 197,201.

That clearly doesn’t mean everyone has a job, but full employment is an economic concept that takes into account that some people aren’t good candidates for the jobs that are available, or are between jobs at any particular time. In general, most economists consider full employment to be reached when the jobless rate is 4 percent or less.

Statewide, Maine’s unemployment rate has been below 4 percent since August. In December it was 3.8 percent, the federal Bureau of Labor Statistics reported, with 25,810 Mainers out of work in a labor force – the total number of people working or actively looking for a job – of 675,496.

Unemployment rates below 4 percent also were seen in the late 1980s and during the summers of 1998 to 2001, but seasonality is a major factor in Maine employment and jobs are usually more plentiful in the summer. The last time the state had a December unemployment rate of 4 percent or below was in 2001.


The labor bureau numbers are not adjusted for seasonal changes in job availability and are subject to revision in the months ahead as the agency gathers more data.

The unemployment rate was near rock-bottom in all three Maine metro areas in December. In addition to Portland’s low rate, Lewiston’s was at 3.4 percent (1,856 of 54,996 workers jobless) and Bangor’s was 3.7 percent (2,599 jobless out of 70,612).

While it’s good news that so many people have found work as the state recovers from the Great Recession, there is a downside to all of those rosy employment figures.

A lack of readily available workers could cause businesses to put off expansion or shift work to states where more people are looking for jobs, said Glenn Mills, an economist with the Center for Workforce Research at the Maine Department of Labor.

“It’s already constraining job growth,” said Mills, who noted that a number of demographic factors, chief among them that Maine’s population has the highest median age in the country, are complicating efforts to increase the number of jobs in the state.

Christopher Hall, chief executive officer at the Portland Regional Chamber of Commerce, said he often hears businesspeople complain about the tight labor market and struggles to find enough workers.


“People are looking for folks,” said Hall, who worries the issue could slow economic growth if it becomes more of a problem.

John Reny, president of the Maine-based retail chain Renys, said his company has been able to fill open spots fairly easily. But he noted that Renys has kept many workers for years, so it usually doesn’t have to search for a large number of employees all at once.

However, filling jobs became a little more difficult last summer, he said, particularly at the company’s store in Wells, a town where thousands of seasonal jobs open up every year.

“We did have some problems finding people,” Reny said, and he worries the situation could be repeated in the upcoming summer, especially with the winter unemployment rate so low.

He said Renys plans a job fair in March to find 40 to 50 workers for its new Windham store, the company’s 17th, which is expected to open in April. The turnout will likely indicate whether it will be difficult to find new workers going forward, he said.

“That will be telling,” Reny said.


Brianna Hodgkins, a manager at Rudy’s at the Cape restaurant in Cape Elizabeth, said a tight labor market and abundance of job openings also can make it hard to retain employees. A worker might leave for a better-paying job or one closer to home.

But Mills, the Department of Labor economist, said the job market might not be as tight as the unemployment numbers suggest. He said a broader measure of employment suggests that 9.8 percent of Mainers in December had either seen their hours cut, were looking for full-time employment but finding only part-time jobs, had become discouraged and stopped looking for work, or were otherwise not captured in traditional measures of unemployment. Economists sometimes look at that figure for a better read of the employment picture.

Mills said it suggests there are more people who would come calling if a good job was posted than is reflected in the traditional unemployment rate. In 2007, before the recession hit, those numbers were 8.3 percent for Maine and 8.4 percent nationally, so by that broader measure of joblessness, employment hasn’t yet bounced back fully, he said.

Mills said labor force participation by people ages 25 to 44 – a key segment – are still not back to pre-recession levels, for reasons that economists don’t know. That means there are some people on the sidelines who could rejoin the job-hunting game.

“Things are tight,” Mills said, “But there’s still a little more slack than the unemployment rate would imply.”

Both Mills and Lawton said it will be harder for employers to fill vacant jobs with the unemployment rate so low, but there are ways to do it.


First, they said, wages will rise, which will draw job-seekers from away and bring local people back into the labor force. For instance, a retiree could return to work because the pay is attractive, but may insist on accommodations, such as a part-time schedule instead of a 40-hour week.

Mills also said that few jobs these days require a great amount of physical exertion, and a 70-year-old can usually perform office work as well as a 50- or 60-year-old.

With the leading edge of the huge baby boomer bubble hitting 70 years old this year, Mills said, some of those retirees may be willing to go back to work.

Lawton said employers probably will have to consider a number of incentives that weren’t needed when the unemployment rate neared 10 percent. For instance, he said employers could offer internships to students with the promise of a job after graduation, or could offer to pay off part of a student’s college debt after being hired.

There also might be other factors that affect employment, Lawton said, such as more housing construction to attract out-state-workers to Maine. He said that may have been a factor in a developer’s recent decision to double the number of apartments in a mill project in Biddeford.

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