Much has been made lately of Maine’s skills gap — the chasm between what skills and knowledge workers have and what employers need. Gov. Paul LePage has made closing this gap a high priority.
This work is complicated by the fact that the gap — and its causes and consequences — varies widely across the state.
Consider the tale of two counties. Cumberland County, with an unemployment rate that is significantly lower than the national average and a per-capita income that is much higher than the state average, has for years stood alone in Maine as a marker of prosperity, according to former Maine State Economist Laurie LaChance.
It is close to the urban areas of both Boston and Portsmouth, N.H. It has a diverse economy, a major airport, a seaport, passenger rail and a highway.
Large multinational corporations in fields including technology, medicine and retail have located their headquarters in the county, along with thousands of good, competitive jobs. A recent study by the Portland Regional Chamber of Commerce found that more than 40 percent of jobs in the state were located in the Portland region alone.
Cumberland County also has the state’s highest education rates, with nearly 40 percent of its residents over age 25 having obtained at least a bachelor’s degree, according to U.S. Census figures.
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“When you have a population where the income is a little higher and the educational attainment is higher, it provides opportunities,” LaChance, who is now the president of Thomas College in Waterville, said this week. “Success does breed success, I think.”
But the story is very different in other parts of the state, including Piscataquis County, where LaChance was raised.
The large and sparsely populated northern county is home to moose, much of Baxter State Park, abundant natural beauty and one of the oldest populations in the state. It also has an unemployment rate that is now hovering around 10 percent and a median household income of $34,016, which is well below the statewide median of $46,933.
It also has Maine’s lowest education rates, with just 15 percent of the county’s over-25 population having obtained a bachelor’s degree.
“To support business activity, you have to have a certain amount of labor force,” LaChance said. “All those factors make it difficult for businesses to grow in the area. They just can’t find the workforce they need.”
Something else that stands out to her about Piscataquis County is that it is one of the only areas in Maine that is not home to a branch of the University of Maine, a private college or a dedicated community college — although the Maine Community College System has an off-campus center in Dover-Foxcroft.
Piscataquis is one of the state’s so-called rim counties, along with Oxford, Somerset, Franklin, Aroostook and Washington counties. These places tend to be older and to have strong traditions in mature economic areas such as fishing, farming, forestry and manufacturing. They are also places that have languished, with lower income levels, fewer jobs and lower educational attainment.
“As the global marketplace has evolved, it’s just been exceedingly tough,” LaChance said. “Education is the one great equalizer. … With every single increment of education, you see the unemployment rate going down. Education is what sets you on your path. If you can find a way to bring up the educational attainment in a region, that’s going to help to attract certain businesses and start certain businesses.”
‘The Thinking City’
Todd Gabe, an economics professor at the University of Maine, recently tackled a research project in which he grouped cities in the United States and Canada based on the types of skills found in the workforce.
The report, “Knowledge in Cities,” included Portland as one of the metropolitan areas that Gabe and his colleagues examined.
Among the metropolitan areas, they found “innovating regions,” where people know a lot about information technology and commerce. There are “making regions,” where people have a high knowledge of manufacturing, but low knowledge of commerce and the humanities.
Then there is Portland, which Gabe characterizes as a “thinking region.” Philadelphia is another example of a thinking region, he said.
“A thinking region tended to have high knowledge about arts, humanities, IT and commerce,” he said. “It was lacking knowledge about things like production and processing. To me, it sort of fits the idea of Portland to a T.”
He said that the fact that Greater Portland has such a high percentage of people who have a college degree has led to higher productivity and higher earnings.
“You put nine economists in a room and you get 10 different opinions,” he said. “But the receipt of a college degree enhances earnings. There’s universal agreement on the impact of college attainment.”
A county such as Piscataquis, with its much lower educational attainment levels, is going to have a much harder time growing a diverse economy. Those 15 percent of college-educated people include the teachers, the doctors, the attorneys, the accountants, the insurance agents and the other professionals who provide services for everyday life.
“That does not leave a lot of room for computer programmers,” Gabe said. “Or a lot more people beyond just the providers.”
Population density, like geography, has a lot to do with whether a region will thrive, Gabe said.
Cumberland County had 337.2 people per square mile in 2010, compared with Piscataquis County, which had only 4.4 people per square mile the same year, according to U.S. Census data.
When it comes to population, Cumberland County has had the edge for the past 100 years. It has been the most populated Maine county since at least 1900, when it had 100,689 residents. In 2010, its population had grown to 281,674, representing an increase of 179.7 percent over 110 years, according to U.S. Census data.
Piscataquis County, on the other hand, increased its population by only 3.5 percent over the same 110-year period, from 16,949 residents in 1900 to 17,535 residents in 2010.
“There’s a lot of research that looks at how bigger cities just tend to be more productive,” Gabe said. “Being around other smart people makes you more productive. There’s a spillover effect. It’s got to be frustrating for rural areas that don’t have a large population base to begin with. They’re kind of swimming upstream.”
“Educated versus skilled”
But not everyone agrees that the attainment of a bachelor’s degree is the only way to assess education levels, or the best way to measure a skilled workforce.
Charles Colgan, a professor at the Muskie School of Public Service at the University of Southern Maine, said there’s often an “overemphasis” on bachelor’s degrees when measuring the education level of a population.
“Bachelor’s degrees are stunningly varying in quality,” Colgan said, “so to simply say someone has a bachelor’s degree is a very, in some ways, crude measure of education levels.”
There’s also a difference between being educated and being skilled, according to Peter DelGreco, president and CEO of Maine & Co., a private, nonprofit corporation that provides free consulting services to companies looking to move to or expand in Maine.
“It’s educated versus skilled,” DelGreco said. “Does the workforce have the skills that your employers need? We gain those skills through some level of education, but there are different ways of doing it.”
For example, online education, short-course training and certificate programs are becoming an increasingly common educational tool for people. The problem is economists and demographers haven’t caught up with the trend.
“We know a lot more people are getting educated that way, but we’re not necessarily picking it up in the degree-oriented measurements we usually use,” Colgan said.
That creates a certain irony as more effort is being placed on ensuring communities have an educated workforce. “As we focus more on it, we’re becoming less able to measure the multiple dimensions of an educated workforce,” Colgan said.
Finding the “underutilized” workforce
There’s more to a company’s decision about where to locate than where the most educated workers are. Supply and demand for that workforce will also be a factor.
Portland may have the largest number of skilled IT engineers, software developers or laboratory technicians, but it’s also true that competition for those people is higher, which in the end will increase a company’s labor costs. “So it’s entirely plausible that a company would look for an educated workforce, but not want to compete with everything else going on in Portland and look to a place like Bangor,” Colgan said.
Companies looking to relocate to Maine often ask DelGreco to help them find areas with underused workforces throughout the state. For example, when data storage provider Carbonite Inc. came to Maine in 2011, it had a cost structure that fit better with Lewiston than Portland, DelGreco said. When athenahealth came to Maine several years ago, Portland was the attraction, but after touring the state, the health information company settled in part of MBNA’s former Belfast location.
And when companies ran into a dearth of qualified workers — especially in the IT field — as they continued to expand within the state, some private-sector officials got together to do something about the problem. They helped create Educate Maine, an initiative which seeks to champion college and career readiness and increased educational attainment in Maine.
IDEXX Laboratories, a global company that employs 1,800 at its headquarters in Westbrook, also supports Maine’s STEM Strategic Plan. STEM stands for Science, Technology, Engineering and Mathematics. “It is estimated that in the next decade one in seven new Maine jobs will be in STEM-related areas, and these jobs will produce wages that are 58 percent higher than wages for other occupations in Maine,” according to a 2010 report by Educational Development Center Inc.
How well an area’s business and academic communities collaborate on addressing workforce issues is also important in its overall economic development.
As an example, the University of Maine in Orono has been nationally known for its expertise in natural resources-based industries, providing chemical engineers and foresters to those industries for decades, Colgan said.
The rural divide
For Piscataquis County and the rest of rural Maine, Colgan believes the health care industry will be the key to increasing the educational level of the workforce.
As the population ages, the health care needs will draw educated health care professionals to the areas and create jobs and educational opportunities for residents, Colgan said. An increase in an educated workforce can in turn spur improvements in the general business climate, he said.
“All businesses need creative and good management, and that tends to be associated with people with the highest levels of education,” Colgan said. “Piscataquis County does still have room to improve its workforce and management skills for its existing companies.”
Besides an increase in health care needs, is there anything Pistaquis County can learn from Cumberland County’s prosperity?
Not really, according to Kenneth Woodbury, director of community development at the Piscataquis County Economic Development Council. The two counties are so different it’s hard to find practical lessons, he said.
His county has just 4.4 people per square mile, an aging infrastructure, lacks good Internet access and even a public road that directly connects Greenville and Brownville Junction, two of its most important communities. Piscataquis County has suffered from declining population and a complicated state school subsidy formula that, he said, has hit rural areas such as his very hard.
“We’ve had to close practically all our local elementary schools,” Woodbury said, adding that he believes educational attainment would improve if there were a college in the county. In Greenville, all the students who graduate go on to college — but within a year after high school graduation, they’re back home, he said.
He and other local officials are working to stem the ebbing tide of the county’s fortunes with smart, targeted development projects. Those include the redevelopment of the idle American Woolen Mills in Dover-Foxcroft into a mixed-use project incorporating commercial and retail office space, a boutique hotel, a high-speed data center and a restaurant.
“That would be a major boon to Dover-Foxcroft and the area in providing employment opportunities,” Woodbury said.
Other projects include finding a cheap energy source and building a railroad spur to woo businesses to an industrial park in Milo and developing tourism.
“The state is providing some help, but it’s not focused,” he said.
The chicken or the egg?
The discussion of an educated workforce and its role in economic development raises the question: Which came first? The educated workforce or the companies that employ it?
Hopefully, both processes — an available workforce attracting new companies and existing companies attracting an educated workforce — are under way, Colgan said. “I think that’s one of the real hallmarks of a healthy economy,” Colgan said. “It’s got both things going on.”
Take IDEXX Laboratories. When David Shaw founded the company in 1983, he did so because there was an available workforce in the Portland area. Ventrex, a Portland biotech company at the time, had been sold and moved to California in the late 1970s. Some Ventrex employees packed up and headed to California, but many stuck around, Colgan said. Those Ventrex employees who stayed made up the core of IDEXX and ImmuCell Corp., another Portland biotech firm still around today. “[Shaw] basically took a workforce in a specific area that was here and turned it into a company,” Colgan said.
Now it works the other way. IDEXX has more than doubled its local workforce in the past eight years, to its current 1,800 (while the majority of employees live in Cumberland County, nearly 500 are from throughout the rest of the state). Many of the new employees came from Maine, but many moved to the area for a job at IDEXX, according to Ann Marie Martin, the company’s director of worldwide talent acquisition. Martin is one of those transplants, having moved to Maine from Michigan two and a half years ago to take a job at IDEXX.
“I love it. It’s a great quality of life, great place to raise a family,” Martin said. “That’s a great lure for talent.”
And IDEXX isn’t worried about workforce issues constraining future growth. It broke ground in April on a $35 million expansion that will accommodate up to 300 additional employees.
Another great example of a company drawing an educated workforce to an area is The Jackson Laboratory in Bar Harbor. Hancock County has 39,585 people who are 25 or older, and 30 percent of them have at least a bachelor’s degree, the third-highest in the state. The Jackson Laboratory is the cause for the high percentage of degree-holding residents in that county, Colgan said.
But one company does not make an economic development plan. As Maine and its rural areas try to find the right formula to spur sustainable economic development, a unified vision for the state’s future, and an understanding that success and greater educational attainment won’t come because of one bright idea, is crucial, LaChance said.
“We ask our politicians: ‘What is the thing you’re going to do to fix things?’” she said. “It’s not just one thing. It has to be a number of things moving in one direction.”
She said she is optimistic that positive change will come to Maine.
“I’ve had the chance to travel the state. There are some wonderful things happening,” LaChance said. “I see hope, I really do.”