Entering 2020, Maine’s economic forecast appeared bright. A decade after the onset of the Great Recession, the state had seen six consecutive years of economic growth. The unemployment rate in December 2019 sat at three percent, part of a 39-month streak of under four percent joblessness.
But the coronavirus pandemic erased that rosy economic picture in a span of a few weeks, forcing businesses across the state to shut down and temporarily throwing as many as one in every six Mainers out of work.
Maine’s economy began to recover over the summer as businesses reopened and many people were able to return to work. But job growth has slowed again this fall, a sign that the recovery may be stalling. Here are five numbers that explain what happened to Maine’s economy this year — and where it could be headed in 2021.
48,000 fewer people working
Total employment — the raw measure of the number of people in Maine who are working — is down by about 48,000 compared to a year earlier, according to state data. About 588,000 Mainers were employed in non-farm jobs in November, a decline from 636,000 at the same time in 2019.
The drop in total unemployment presents a bleaker statistic than a more commonly cited figure, the unemployment rate. But the unemployment rate, which sat at 5 percent in November, only includes individuals who are actively looking for work, while the decline in total employment also represents people who dropped out of the workforce due to health concerns, the need to care for family members or frustration about the lack of opportunities.
The news is not all bad. Total employment in Maine is trending in the right direction, as the state has added jobs every month since April. However, the rate of job growth has slowed over the past few months, an indication that recovery could be stalling.
2 sectors account for half of job losses
The virus had vastly different consequences for different parts of Maine’s economy. Two sectors — leisure and hospitality and health care and social assistance — accounted for 51 percent of job losses between February and November, according to a state report released this week.
Public sector employment was also hit hard, with state and local governments accounting for 16 percent of net jobs lost over the same period. On the flip side, the construction sector has fully recovered from initial pandemic-related job losses, the report found, due to an increase in demand for housing.
10,639 job openings
Maine’s official state job board lists 10,639 jobs available, about one job for every four workers currently receiving unemployment benefits. Several private estimates show fewer openings — Monster.com lists just over 6,000 jobs while Opportunity Insights found 6,500 postings in December.
The number of job openings is comparable to pre-pandemic levels, according to Opportunity Insights’ metrics. But it comes during much higher unemployment, showing that workers looking for jobs face more competition.
5 percent increase in weekly earnings
Wage and salary income for private sector employees continued to rise this year despite the pandemic. Average weekly earnings in Maine rose to $905 this fall, up from $860 dollars over the same period in 2019, according to federal data.
Earnings data only includes employees who are still working. The rise likely reflects that layoffs were most common in low-wage jobs. Workers who stayed employed, including many higher earners, may also have seen their incomes grow this year.
The increase in earnings differs from the Great Recession, when average income remained stagnant for several years. It could be a positive sign for recovery, as higher earnings typically translate to more consumer spending, which could help Maine’s economy rebound quicker in 2021.
$650 million shortfall
State and local tax revenues have been hit hard by the pandemic-related economic downturn. The Maine Revenue Forecasting Committee now projects a state revenue shortfall of $650 million through mid-2023 compared to pre-pandemic predictions. Local budgets are struggling too, and economists have warned that revenue shortages risk further public sector layoffs, which could prolong the virus-induced recession.
That latest state forecast is less dire than projections early in the pandemic, when analysts predicted that Maine’s shortfall could be as high as $1.4 billion. But the $650 million gap — slightly larger than what Maine faced at the onset of the Great Recession — will still dominate state budget debates next year.