BELFAST, Maine — Snow fell heavily Wednesday afternoon outside Colburn Shoe Store on Main Street, which proudly advertises itself as America’s oldest shoe store.
Inside, owner Brian Horne was busy weathering a storm of the economic variety as he fitted a pair of custom-ordered winter boots on the feet of a local woman.
“In Belfast, we mirror the rest of the country in some ways. We don’t know which way we’re going,” Horne said as he rang up the sale. “But I think we have to be optimistic.”
In a week beset by more terrible economic news, national and statewide, it is clear that the recession in Maine has deepened more swiftly and severely than experts predicted just a month ago and that optimism is as thin on the ground as the snow is thick.
The national unemployment rate has risen to 7.2 percent, a 16-year high, and the Maine rate is hovering just below that at 7 percent. The number of people receiving unemployment benefits in the country has reached the highest level on records that go back more than 40 years, U.S. government officials said Thursday.
“The danger that we will have a recession and job losses as bad as in the early ’90s has grown,” said Charles Colgan, chairman of Maine’s Consensus Economic Forecasting Commission.
Colgan, who also is a professor at the Muskie School of Public Policy at the University of Southern Maine, said the speed of the national decline has surprised him.
At the end of December, he predicted that the current recession would be most comparable to the one that walloped the country in the early 1980s. It wouldn’t be nearly as severe in Maine as the recession of 1991-92, which was caused by the sudden loss of manufacturing jobs and a hit to the state’s retail industry, he said then.
But that is changing, and stores like the ones on Main Street in Belfast have remarked on the difference.
“I have noticed that … people have been very careful about spending money,” said Eunice Palmer, 78, owner of the Belfast Home Supply Center.
Peter Nesin, an optician who ran into the hardware store to make a purchase, said that it has hit him, too.
“My business is probably down 20 percent, as a guess,” he said. “Businesses are going to have to ride out this economic depression that we’re having — or recession, whatever you want to call it. Politicians want to use euphemisms. The fact is, it’s tough times right now for people.”
City reinvents itself
Tough times are nothing new to Belfast. This small midcoast city of more than 6,000 people has had its share of ups and downs over the last 30 years.
Economists say that the city’s experiences in inventing and reinventing itself — and its current focus on diversification — are important to consider as other communities around the state consider how to ride out the recession.
“Belfast is an interesting community,” said Chris Shrum, director of community services for Eastern Maine Development Corp. “If you look at the last 20 years, what has helped Belfast is the diversification in their employment base. Communities that take a proactive role in planning for their economic future, that’s what pays dividends. That results in overall community vibrancy.”
Thirty years ago, the region’s primary industry was chicken farming and processing. Locals remember the days when chicken feathers blew down the city’s streets and tell apocryphal tales about chicken blood in the harbor attracting sharks.
But when the poultry industry collapsed in the 1980s, it set the local economy reeling.
“When it went, it was really bad,” recalled Mike Hurley, former mayor and co-owner of the Colonial Theatre. “It was tough for a lot of people. It wasn’t such a nice industry, perhaps, but when that’s how you make your living and you lose it, it’s not a pleasant experience.”
The city bounced back and reinvented itself, thanks in large part to attracting the attention of credit card giant MBNA.
“Belfast went from being a chicken town to a bank town,” Shrum said.
When MBNA was sold to Bank of America in 2005, the city’s fate was once again uncertain — but efforts to diversify have helped Belfast, experts say. Telemarketing skills learned in the credit card industry have been more transferable than skills learned in the chicken-processing plants.
“There’s no question that the diversification of the economy is the principal reason that [the state’s] unemployment rate now is below the national average,” said Christopher St. John, executive director of the Maine Center for Economic Policy.
In contrast, during the recession of the early 1990s Maine’s unemployment rate was higher than the national average.
“Now there’s a greater variety of work that Mainers can do,” St. John said. “Mainers are a little better trained than before and more adaptable.”
Belfast City Manager Joe Slocum said that continuing to develop the local economy is a big part of the city’s plan.
“We’re very aggressive about economic development,” Slocum said.
Changes have happened because of the national recession, he said. In August, city officials “equally divided” their efforts to attract business to the area and to retain business that was already here. Now, 80 percent of efforts are spent on retention and just 20 percent on attracting new business.
“If your local economy can sustain itself for a while, this [recession] will ride itself out,” he said.
But not all is rosy in the small city on Penobscot Bay. Area merchants such as Horne and Nesin report downturns in their businesses, and the city manager can gaze at several empty storefronts from his office overlooking High Street.
The vacancies worry locals such as Hurley.
“I believe there is something fundamentally wrong with Belfast, and I’m not sure what it is,” Hurley said. “I’ve been taking pictures of empty storefronts and empty businesses. There are all these things that are dead. You go, ‘What the hell is going on here?’ What does it mean for the future? Why aren’t people starting busi-nesses here? Why aren’t they successful in business?’”
Hurley said he plans to present the photos Tuesday to the Belfast City Council in an effort to encourage it to take action.
Mike McDonald is the owner of Belfast Bicycles, which opened in 2004. He said that he had been working for Ford Motor Co. in New York and wanted a more peaceful lifestyle.
As he shoveled the sidewalk in front of his shop Wednesday, McDonald said that business was down about 10 percent in 2008.
“I don’t panic,” he said. “I’ll take it as it comes. Look, I didn’t come here to get rich.”
McDonald did say that the downtown’s shuttered shops are “worrying.”
“It’s not a good thing,” he said.
But from his perch, Slocum sees something different in the darkened windows — something that sounds like a perfect future for a former chicken town.
“They’re eggs waiting to hatch,” he said. “It’s not all, ‘Get into the fallout shelters, the tornado is coming, life as we know it is gone.’ That’s not true. I’m hugely optimistic about the future.”