Income gap in Lewiston-Auburn among widest in nation, according to national mayors’ group report

Posted Aug. 12, 2014, at 11:09 a.m.

LEWISTON, Maine — A new report issued Monday shows the gap between the rich and poor in the U.S. continues to grow and it highlights the gap in Lewiston-Auburn as one of the largest in the country.

The report, issued by the United States Conference of Mayors, examines the difference between the average or mean and median household income growth in U.S. metropolitan statistical areas from 2005 to 2012.

Growth in average income is usually considered an indicator of an economy on the upswing, the report states.

“But if average income rises at a faster pace than median income, it usually indicates that more and more income is being concentrated among the richer households,” the report states.

According to the study, average incomes in Lewiston-Auburn increased 17 percent over the seven-year period while median incomes increased only 3 percent.

During the same period, average income nationwide increased 14 percent from $62,556 to $71,317, while median income improved at a slower pace of 11 percent from $46,242 to $51,3711.

Median annual income for Lewiston-Auburn for 2012 was $44,297.

In Bangor, the median income in that year was $41,653 and in the Portland area was $53,701.

Greater Portland’s average income also grew at almost double the pace of its median income from 2005 to 2012, but the disparity was not as steep as in Lewiston-Auburn. Portland’s average income rose about 13.4 percent while median income rose almost 8 percent.

For Maine, the median was $46,709 and the median for the U.S. was $51,371.

Jim Diffley, author of the report and director of U.S. Regional Economics at

IHS Global Insights, the company commissioned to do the study, said the trend in metropolitan areas is reflective of the overall issue nationwide but the growth of the gap appears to be accelerated in certain cities over others.

Diffley said a variety of factors lead to the disparities of income in any given city, including general demographics, available employment sectors and industries.

Above Lewiston-Auburn on the list is Wausau, Wisconsin; Sandusky, Ohio; and Grand Forks, Minnesota-North Dakota; Kokomo, Indiana; Bend, Oregon; Pascagoula, Mississippi; Dalton, Georgia; Ithaca, New York; and Albany, Georgia.

“While the economy is picking up steam, income inequality and wage gaps are an alarming trend that must be addressed,” Sacramento Mayor Kevin Johnson said in a statement issued Monday.

Johnson, the current president of the conference of mayors, said the group would also issue recommendations for what could be done to help reverse the trend.

“We cannot put our heads in the sand on these issues,” Johnson said. “The nation’s mayors have an obligation to do what we can to address issues of inequality in this country while Washington languishes in dysfunction.”

So what does this mean for Lewiston-Auburn?

Auburn Mayor Jonathan LaBonte said Monday that the issue has been on his radar screen for some time and he hopes the report will be a “conversation starter.”

LaBonte said he believes the data partially reflects a growing trend of higher-wage earners from southern Maine choosing to locate in Lewiston-Auburn, where real estate is less expensive.

“Some of this is a reflection of the in-migration of the sprawl, so to speak, heading north out of Portland,” LaBonte said. He said on the other side of the equation are the large numbers of new Mainers or immigrants who are relocating in Lewiston or Auburn and who haven’t yet acquired the job skills or education they need to obtain the best-paying employment.

“This is folks that are moving to Lewiston-Auburn because it’s an opportunity to get a fresh start. It’s going to take a little bit longer to see a rise in incomes among those folks,” LaBonte said.

Among the recommendations in the report is a renewed focus on college and technical education to provide residents of a region with the skills they need to obtain higher-paying work.

The report also suggests that expanding early childhood education programs, helping to put lower-income children on an equal playing field with children from wealthier families, will also eventually buoy academic success and increase the numbers with advanced technical training or higher education degrees.

LaBonte said he has been speaking with Portland Mayor Michael Brennan in discussions about making sure higher education offerings in Lewiston-Auburn and Portland are diverse and focused so that within the region those seeking the technical skills or education that will lead to better-paying employment are readily available.

“We are fortunate to have a number of institutions of higher education,” LaBonte said. “But the dynamic is, are those institutions competing with one another to get the tuition dollar or are they working in a fully integrated way, especially those who are getting a public subsidy, to make sure we are maximizing each dollar for a return on someone earning that degree?”

LaBonte said he thinks the gap for Lewiston-Auburn is also reflective of an economic development strategy in Lewiston-Auburn that over the years has too long focused on attracting big business or large employers rather than focusing on local startups or small business development.

“I think the failure of the data on the median income is an indictment of some of the economic development strategies that some local agencies have been utilizing,” LaBonte said. “Focusing on courting big business and having a real small circle of what is economic development and not doing enough to support small business development and local business development.”

LaBonte said Portland is an example of a city that’s created that “farm system” of focusing economic development resources on smaller businesses and startup companies.

“And that has consequences and it creates limited opportunities for people to lift up their incomes on their own,” LaBonte said.

Lewiston Mayor Robert Macdonald declined to comment on the new study.

The report concludes that according to economic models, the drift toward income inequality will persist in the coming years because it is a structural feature of the 21st century economy.

“Unless policies are developed to mitigate these trends, income inequality will only grow larger in the future,” Diffley said.

BDN business and economics writer Darren Fishell contributed to this report.

 

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