If you listen to Gov. Paul LePage and his Republican allies, they’ll tell you Maine’s economy has turned a corner. Businesses are creating jobs, more people are working and fewer people are living below the poverty threshold. Fewer Mainers are dependent on government programs to get by.
Sounds like Maine’s economy has recovered, right?
But listen to the governor’s detractors, and you get a different picture. Maine has lagged the nation in job creation and economic growth. Some 50,000 Maine residents are still unemployed. Many still need a hand up from government programs.
In official terms, the nation’s economy started turning around in June 2009 after a recession that started in December 2007, according to the National Bureau of Economic Research.
How far has Maine’s economy come since the start? By a handful of key measures, it’s growing, but slowly, and the state has a ways to go before it recovers completely. Even if Maine recovers to its pre-recession norm, it will still lag the nation on important measures such as household income and productivity.
Slower job growth
The most significant job losses in Maine took place in 2009, according to data from the U.S. Bureau of Labor Statistics.
Maine ended 2007 with 620,600 nonfarm jobs. The state shed jobs during nine of the following 12 months. By December 2008, the state was down to 608,500 jobs. A year later, the state had 592,200 jobs.
Maine hit its jobs low point — 591,500 jobs, or 4.7 percent below the pre-recession total — in August 2010 and again in May 2011.
Today, Maine still hasn’t regained all the jobs it lost during the recession, though the number of jobs has grown from the low point. The state had 602,600 jobs on the books in August — 2.9 percent below its December 2007 total.
Maine isn’t unusual for having fewer jobs today than it did nearly six years ago, but Maine’s jobs recovery has been slower than New England and the nation’s. New England’s July jobs total was 1 percent below its December 2007 count, while the nation’s was 1.5 percent lower.
In New England, Massachusetts is the only state that has more jobs today — 0.7 percent more — than it did before the start of the recession.
While Maine’s job growth has lagged the nation’s, the state’s unemployment rate hasn’t risen as high. In December 2007, Maine’s rate was 4.8 percent, while national unemployment stood at 5 percent, according to the Maine Department of Labor. In July, Maine’s unemployment rate was 7 percent, while the national rate hovered at 7.3 percent. The unemployment rate in Maine translated to 49,966 people out of work in July, down from a peak of 59,076 in February 2010.
Maine has also had a higher percentage of its population participating in the labor force. Maine’s participation rate was 65.3 percent in August, compared with 66.2 percent in December 2007. The national rates were 63.2 percent in August and 66 percent at the start of the recession.
Labor force participation among Maine men slipped to 69.7 percent in 2012 from 72.4 percent in 2008. Among Maine women, the drop has been less pronounced: 60.7 percent in 2008 to 60.5 percent in 2012.
Lower output, slightly faster earnings growth
Unlike the nation, Maine never went a full year without economic growth. Between 2008 and 2009, while the national economy shrank 2.28 percent, Maine’s economy grew 1.11 percent. Since the U.S. economy has begun to turn around, however, the growth in Maine’s gross domestic product has lagged the nation’s.
Between 2009 and 2010, Maine’s economy grew 2.59 percent compared with 3.74 percent nationally. The next year, between 2010 and 2011, Maine’s economy grew slightly more slowly, 2.23 percent, while the national growth rate increased to 3.97 percent. And the Maine and U.S. growth rates stayed about the same between 2011 and 2012, according to the Bureau of Economic Analysis: 2.22 percent and 4.05 percent respectively.
Meanwhile, Maine’s per-capita economic output has long lagged the nation’s — it ranked 40th in 2011 — and generally grown more slowly since the start of the recovery. Maine’s per-capita economic output was $34,597 in 2012, compared with $42,784 nationally.
Middle of the pack on housing prices
Home prices in Maine have yet to recover to their pre-recession levels, according to the Federal Housing Finance Agency’s home price index. That’s also the case for every other New England state and the nation as a whole.
Maine home prices in June of this year were 11.3 percent lower than they were at the December 2007 start of the recession. Across New England, today’s prices are still 12.7 percent below their pre-recession levels. Across the nation, prices are 13.4 percent lower.
Within New England, Vermont’s home prices are closer today to their pre-recession levels than any other New England state’s — just 3.6 percent lower than they were in December 2007.
Rhode Island has seen the most dramatic price slide: Today’s home prices are 23 percent lower than they were before the recession. Connecticut’s are 16.8 percent lower today, and New Hampshire’s are 16.2 percent lower.
More poverty, but less than the nation
Maine’s poverty rate has been lower than the nation’s since the start of the recession. However, poverty rates both in Maine and nationally have yet to return to pre-recession levels.
Data released Wednesday by the U.S. Census Bureau show a stalled economic recovery when measured by poverty and income.
Maine’s poverty rate for 2012 was 14.7 percent, the highest in New England and statistically no different from the 2011 rate of 14.1 percent, according to Census’ American Community Survey. In 2000, 10.1 percent of Maine residents lived below the poverty line.
The Census Bureau this week also released state poverty rates as measured by the Current Population Survey, which showed a slight, but statistically insignificant, year-over-year drop in Maine’s poverty rate; the Current Population Survey surveys fewer households than the American Community Survey.
The nation’s 15.9 percent poverty rate for 2012 was unchanged from 2011. In 2000, the U.S. poverty rate was 12.2 percent.
Income was similarly stagnant between 2011 and 2012. Maine’s median household income of $46,709 for 2012 was about the same as the state’s 2011 income level, $47,811. Nationally, the median income was $51,371 for 2012 and $51,324 for 2011.
Measured in today’s dollars, neither Maine nor the U.S. — where median incomes in 2000 were, respectively, $48,595 and $55,030 — has caught up to precession levels.
Maine’s higher poverty rate since the start of the recession corresponds with a higher percentage of low-income students in Maine schools. In 2012, 46.1 percent of students qualified for free- and reduced-price meals, up from 37.6 percent five years earlier, according to the Maine Department of Education.
As the state’s poverty rate rose, the number of Maine residents receiving food stamps did, too.
The number jumped 46 percent between 2008 and 2012, to 253,000 from 173,000. That jump happened as food stamps eligibility nationwide expanded. Nationwide, the number of people using food stamps jumped even more dramatically: 65 percent. Some 46.6 million people in the U.S. were using food stamps in 2012, up from 28.2 million people four years earlier, according to the U.S. Department of Agriculture.
Matthew Stone is BDN opinion page editor.