Santa Ana, originally of Honduras, works the production line at Barber Foods on St. John Street in Portland in 2022. Ben McCanna/Staff Photographer

Maine has hit targets for productivity and wage growth in the last few years, but faces a declining labor force, the state reported Friday in its updated 10-year economic development strategy.

Real wages – employee pay after inflation – and productivity were up 10% in the last four years, according to “The Maine 2020-2029 Economic Development Strategy: The 2024 Reset.” Though Maine has made “significant progress” in labor force growth, it’s fallen short “of where we need to be,” the report said. Productivity measures how efficiently money and labor are used to produce goods and services.

The updated plan was released at an event at Bigelow Laboratory for Ocean Sciences in East Boothbay Friday morning.

The initial report in 2019 was intended as a “roadmap to execute,” Commissioner Heather Johnson of the Department of Economic and Community Development said in an interview.

“Now it’s time to refresh that project suite. It is an implementable plan and we’re all focused on it,” she said.

Unlike the initial report that was submitted to the Legislature for its consideration, this report can serve as a guide for lawmakers “as they work on policy,” Johnson said.


The state set a goal of adding 75,000 workers to the labor force over 10 years but reports an increase of 13,400 in three years. At that rate, Maine would add fewer than 45,000 employees in a decade.

The goal of increasing what the report calls the “talent pool” would be achieved by migration and an increased labor participation rate, the report said. “The pandemic affected both factors,” it said.

Migration into Maine, particularly of residents younger than 45 years old has increased. At the same time, more Maine workers in the baby boom generation – those born between 1946 and 1964 – are retiring than young people are joining the workforce, the state said.

“So we are doing better than expected, but not as well as we need to do,” the report said.

Johnson said Maine’s demographic trends have been “true for decades.” In the 1980s, however, the problem was high unemployment, she said. More recently, technology is driving greater productivity, allowing employers to use fewer workers, she said.

The state Department of Labor reported this week that the number of non-farm jobs in March was the second-highest on record, at 656,100, after hitting a record high of 656,400 in February. While the state’s unemployment rate is near a record low of 3.3%, the labor force participation rate of 59.3% was down slightly from the previous three months.


The state report said labor force participation has recovered from the pandemic, but still remains below its levels in the early 2000s. Maine projects a gap of about 100,000 workers between its labor force goal of 725,000 in 2030 and a projection of about 625,000.

A stagnant or shrinking labor force undermines the economy by slowing growth as fewer goods and services are produced, leading to higher taxes as government struggles with a smaller revenue.

The report cited a few ways to expand the labor force. In 2022, Maine made community college free for recent high school graduates. More than 11,500 students have enrolled, nearly 50% more than projected, the report said. The same year, Maine established the Maine Career Exploration Program, which provides paid work experiences for Mainers ages 16 to 24; 2,000 are enrolled.

As of 2021, 55% of Maine adults have a credential of value, which is up from 44% in 2018, and “well on the way” to a planned goal of 60% by 2025, the report said. And enrollment in Career and Technical Education is up 18% since 2018, with 10,012 students enrolled in 2023.


Maine’s $93.1 billion economy increased by a 5.9% annual rate in the fourth quarter of 2023, the fastest among the six New England states, according to the U.S. Department of Commerce. However, Connecticut’s $340.2 billion economy grew the fastest in the region for the year, expanding by 6.5%, while Maine’s economy grew more slowly, at 6.2%.


Gov. Janet Mills, introducing the report, touted Maine’s rebounding economic performance. Maine was one of the last states to fully recover from the recession of 2008-09 and economic growth had increased at only a third of the rate of the rest of the U.S. in the previous decade, she said.

Patrick Woodcock, president and CEO of the Maine State Chamber of Commerce, said legislation that Mills recently signed to put a $25 million research-and-development bond on the November ballot will provide the “seeds for long-term economic prosperity.”

However, businesses had hoped for “some type of support” in the recently concluded session of the Legislature for childcare to help businesses hire more workers and parents to enter the labor force.

To attract workers, businesses are creating more flexible shifts, partnering with day care to help working parents and male-dominated employers are looking at ways to hire more women, Woodcock said.

“A lot of this you cannot solve with just government policy,” he said.

Rep. Tiffany Roberts, D-North Berwick, the House chair of the Legislature’s Innovation, Development, Economic Advancement and Business Committee, said the report “aligns with what we have done and maybe informs us about what the next step is.”

The Legislature has helped expand the workforce with measures easing occupational licensing and earmarking $1 million for nurse faculty loan repayments, Roberts said.

Related Headlines

Comments are no longer available on this story