March 25, 2019
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Reports on Maine workers’ productivity don’t include ‘working in place’

Four months ago, the Maine Development Foundation released a report about the productivity of Maine’s workers. The report, which ranked Maine’s workers 48th for productivity in the nation, gained a considerable amount of media attention and led to the usual bleak opinions about the economic future of the state.

I was curious, however. Since moving to Maine in 2007, I have worked mostly for an organization based in Washington, D.C. My wife also works from home for a software company headquartered in another state. Most people call what we do “working remotely.” But I prefer to call it “working in place.”

Did the foundation’s calculations of Maine’s worker productivity include the contributions of workers like us?

The authors of the productivity report gave Maine its 48th ranking by using data from the Bureau of Economic Analysis. Does the bureau’s data count people like me?

I’m not an economist, but I can read the technical literature. When I did, I found that the bureau’s data on state gross domestic product (which the Maine Development Foundation used in its calculations) doesn’t include something called a “commuter adjustment.” This allows them to factor in people who work in one state but live in another (people who work in place would be a subset of this group).

Maybe I was reading something wrong. So I wrote to the bureau and received a note back, which included this:

“GDP by state is measured by place of work. State personal income is measured by place of residence. So, workers who live in Maine but work in another state would be treated differently for GDP than personal income. Those workers would be included in Maine’s personal income, but not in Maine’s GDP.”

That confirmed it. The Maine Development Foundation’s report had undervalued the productivity of Maine’s workers because it hadn’t counted all the workers or measured their economic impact. The data didn’t account for people who work in Massachusetts or New Hampshire, commuting every day across state lines. Nor did it include workers such as my wife or me who have the freedom to work from another state. Thus, as a whole, Maine’s workers ended up looking less productive than they actually are.

Building the economy of Maine depends on attracting more people like this to the state. It’s more effective to attract individuals and households than it is to attract businesses. Not only are households more nimble, but businesses require tax breaks and economic incentives which often can end up losing money for local governments.

Also, people who work in place don’t stress the infrastructure, such as the roads, because they don’t drive to work. This means cleaner air and fewer cars on the road during snowstorms. At the same time, they pay income and sales taxes. They buoy the real estate market. They send their kids to schools. Because they stay here all year long, they understand the seasons and become part of the communities where they live.

I’m not under any illusion that counting the work of those who work in place will make Maine rise in the worker productivity ranks, and I’m not arguing that there are uncounted tens of thousands of workers like me. However, I am saying there’s untapped opportunity to build the state’s economy that’s being left on the table.

In order to attract more of these people, we need to know how many are already here, and we need to figure out how to measure their economic contribution.

Over the summer, I reached out to Jennifer Hutchins, executive director of the Creative Portland Corporation, a nonprofit group that works to attract the “creative class” to the area. To be honest, I told her, I’d never felt that Creative Portland was for me, because I’m not an entrepreneur, artist or sole proprietor.

I was mistaken, it turns out. In a conversation, Hutchins agreed that it’s crucial to see how many people in the Portland area and the state work in place and find out what they need. Together with my wife, we are planning a conference to be held in Portland, which will serve as a summit for everyone who hires, manages and researches people who work in place.

It will also help to put Portland on the map as a great place to work from — because your family wants to be here, too.


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