Out of work, out of hope – This is what a depressed economy looks like

September 21, 2017 by

James Myall

Tens of thousands of Mainers disheartened by the dim prospects of good paying, middle-class jobs have given up looking for work. Some are discouraged to the point of despair, turning to substance misuse and even suicide. That’s the stark and somber finding of MECEP’s latest report, The State of Working Maine 2017.

Using numerous data sets and incorporating the latest national research, the State of Working Maine demonstrates how Maine’s stagnant economy, rising inequality, and the erosion of the American Dream have resulted in chronic levels of deep poverty, poor health, and lack of work. While the entire country was hit hard by the Great Recession, the State of Working Maine lays bare the extent to which Maine’s recovery has been especially slow, with damaging consequences.

At the most basic level, Maine’s economy is smaller than before the Great Recession. Maine’s Gross Domestic Product, once adjusted for inflation, is 1% below 2007 levels. Meanwhile, New England’s economy grew 8% over the decade, and the national economy grew 12%.

 

As MECEP reported previously, the effects have been particularly bad in rural Maine where the economy contracted in real terms for seven straight years between 2006-2013. The State of Working Maine examines the growing gulf between the “two Maines,” with the economy of the Greater Portland region continuing to grow, while the rest of the state is left behind. The situation is especially dire in Maine’s “rim counties” (Aroostook, Franklin, Oxford, Piscataquis, Somerset, Washington), where poverty and unemployment remain at historic highs.

Some of this crisis has been obscured by policymakers’ reliance on statewide data that papers over the woes of rural Maine with the relative success of the Greater Portland economy. Similarly, headlines touting an historically low unemployment rate are misleading. The unemployment rate only measures people actively looking for work, and cuts out the increasing number of Mainers who have given up on the economy. If Maine’s prime-age workers (25-54-year-olds) were in the labor force at the same rate as they were in 2001, there would be 30,000 more Mainers in the labor force—potentially making the unemployment rate twice what it appears today.

 

The exodus of prime-age Mainers from the labor force is the result of the poor state of our economy, and the failure of policymakers to improve it. Since 2001, Maine has lost a net of 37,000 jobs that pay middle-class wages, mostly in rural Maine, which have been replaced with low-wage retail and tourism jobs, concentrated in the Portland area. Every year since 2012, 1,000 Mainers have left rural parts of the state for the Greater Portland area; but thousands are left behind without the prospect of a decent paying job.

The overall impact is historic rates of poverty and people out of work in Maine’s rim counties; a cycle that means diminishing job prospects and longer gaps on their resume. Poverty and lack of work also have serious detrimental impacts on physical and mental health that hold Mainers back from work. When hitting bottom, some workers turn to drugs, alcohol, and even suicide. Among 25- to 54-year-old Mainers, between 2000 and 2015, suicide rates increased 45%, drug-related accidental deaths (e.g. overdoses) increased 577%, and deaths from drug- and alcohol-related illnesses (e.g. liver failure) increased 185%.

This sorry state of affairs didn’t come about by accident. Policymakers routinely failed to invest in education, infrastructure, and communities, turned away federal resources, and cut taxes for Maine’s wealthiest residents. Those tax cuts have only served to widen wealth inequality as 30% of real-term income growth between 2012 and 2015 went to the wealthiest 5% of households, while the poorest 25% received just 0.2%.

To set Maine on the right course, and to bring new hope to the tens of thousands of Mainers who are giving up on what is seen as a rigged economy, Maine’s lawmakers must realize that investment in Maine’s people is critical. Working Mainers need to be guaranteed a livable wage and need to be able to care for themselves and their loved ones through paid leave. Mainers deserve access to affordable health care so they are healthy enough to continue working, or return to work. Educational opportunity needs to be available to everyone, regardless of zip code. Most of all, lawmakers need to be prepared to show leadership, and ask those who have gained the most in recent years to contribute their fair share in helping to pull all of Maine out of recession.

Read more in our State of Working Maine 2017 report.

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