LePage backers say media missed jobs growth story; economists say picture isn’t so clear

By Whit Richardson, BDN Staff
Posted Jan. 04, 2013, at 7:49 p.m.

PORTLAND, Maine — In the closing days of 2012, a group called Maine People Before Politics released a list of the “20 Least and Worst Covered Maine Political Stories of 2012.”

Topping the list as the number one worst covered story of 2012 was the fact Maine added a net 6,800 jobs between June 2011 and June 2012.

The group, founded in 2011 by former members of Gov. Paul LePage’s election campaign, claimed the job growth was a result of “the pro-growth reforms of the 125th Maine Legislature and Governor LePage.”

While the 6,800 job number is accurate, the variables that impact Maine’s economy are countless, according to Glenn Mills, chief economist at the Maine Department of Labor’s Center for Workforce Research & Information.

To point the finger at one factor and claim it’s the cause of a net increase in jobs between two months a year apart doesn’t make sense, Mills said.

“If they say that, they don’t know what they’re talking about,” he said. “It’s not provable.”

Amanda Rector, Maine’s state economist, wishes it were so simple.

“It would make my job much easier if it were that easy,” she joked.

Maine added 6,800 jobs (excluding self-employed workers), representing 1.1 percent job growth, between June 2011 and June 2012. That’s about the same growth rate Vermont and New Hampshire experienced over the same time period. Mills calculated the number as part of a report he presented in October to Maine’s Consensus Economic Forecasting Commission.

While the June to June time frame may seem arbitrary, it was used because June 2012 is the most recent month for which employment data pulled from business unemployment insurance tax filings is available.

This data — called the Quarterly Census of Employment and Wages, or QCEW — is much more accurate than the often volatile employment survey estimates released each month by the Bureau of Labor Statistics. QCEW figures for the third quarter of 2012 (July through September) won’t be available until February, Mills said.

While the state may have had roughly 6,800 more jobs in June 2012 than the same month the year before, using that number to claim the state has added jobs is misleading, according to Charles Colgan, a professor of public policy and management at the University of Southern Maine’s Muskie School of Public Service.

“It’s a cherry-picked number,” he said. “The implication is we have 7,000 jobs back in 2012, and there’s no evidence that happened on an annual average basis. The third and fourth quarters were, in fact, pretty weak.”

While the month-to-month survey estimates from the BLS are volatile, averaging them out over a year offers a more accurate picture, Colgan said. Doing so shows that job growth in 2012 is going to be flat against 2011, he said.

“We ended 2012 about where we ended 2011,” he said. “You can put whatever spin on that you want.”

But what about those “pro-growth reforms” touted by the Maine People Before Politics group?

Though Gov. LePage has spent two years in the Blaine House, legislation aimed at improving the economy hasn’t had time to take effect, according to Scott Moody, CEO of the Maine Heritage Policy Center and a member of the Consensus Economic Forecasting Commission. ( Moody is also a BDN blogger.)

LePage’s tax cuts only kicked in four days ago and PL 90, the health insurance law passed in 2011, is still not fully implemented, Moody said.

“We’re at very early stages of seeing what effect various reforms of the past two years have had,” Moody said. “I’m, of course, very optimistic that they will have an impact.”

However, a law doesn’t have to be fully implemented to move the needle in a positive direction, Moody said. Just the act of passing laws and making other non-legislative policy changes, such as streamlining a regulatory process, can affect the economic climate by impacting the psychology of Mainers, he said.

“Those types of things are very intangible,” he said. “They’re hard to measure, but they’re very real.”

http://bangordailynews.com/2013/01/04/business/lepage-backers-say-media-missed-jobs-growth-story-economists-say-picture-isnt-so-clear/ printed on August 2, 2014