July 22, 2019
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Key to Maine’s economic future is attracting people to move to the state, economist says

BANGOR, Maine — If Maine’s going to continue to dig itself out of the recession and thrive in the future it needs more people, according to an economics and public policy professor with 12 years of experience in the State Planning Office under three governors.

Charles Colgan, a public policy and management professor at the Muskie School of Public Service, shared his research and projections about Maine’s economy with members of the Bangor Region Chamber of Commerce during a Tuesday morning breakfast at the Spectacular Event Center.

Colgan said that one of the state’s greatest economic challenges is its aging population.The generation known as the baby boomers is approaching or at retirement age, and younger people will be needed to take over those jobs and take on any new positions as the state tries to climb back to prerecession employment levels, according to Colgan.

The number of 20- to 34-year-olds in Maine has declined 20 percent from two decades ago, Colgan said. His forecasts project that the state needs its population to grow by about 2,500 per year to meet employment needs in 2017. In recent years, it has been increasing by an average of just 800. Because deaths are exceeding births in many parts of the state, Colgan said, all of that growth will need to come from people moving to Maine.

“Sooner or later, it’s going to hit that we just don’t have enough people,” Colgan said.

Addressing the chicken-or-egg scenario of whether Maine needs more people to attract job growth or more jobs to attract people, Colgan said, “my answer is yes,” the state needs to focus on both simultaneously.

Pulling people into the state can be a challenge, as one of the determining factors for people looking to relocate is wage levels. The question is whether bringing up wages will make it more difficult for Maine business sectors to remain competitive.

In the wake of economic collapse, Maine’s economy appears to have stabilized, Colgan said, as the state has seen three consecutive quarters of job growth and expects a fourth consecutive quarter at year’s end. This is the first time such a trend has been seen since 2007.

Colgan said Maine was slow to fall into the recession, experiencing it about six months after the rest of the nation, and its employment rates didn’t fall as far. However, Maine also has been much slower to climb back to pre-recession levels of employment compared with states such as Massachusetts with its more dynamic technology industry.

“Our challenge will be to make Maine a continually more attractive place to move to,” Colgan said.

Other points Colgan made during his presentation included:

• The most job growth in Maine over the next decade will occur in Greater Portland and Bangor. Colgan said he is worried about employment prospects in rural Maine.

• Canada’s economy fared better than that of the U.S. in recent years, which works to Maine’s advantage. Canada is Maine’s largest foreign trading partner.

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