Employment in Maine is expected to shrink by nearly 16,000 jobs over the 10-year period ending in 2028, according to a new labor market outlook report compiled by state economists.
The projected drop in employment between 2018 and 2028 is the result of the number of baby boomers reaching retirement age outpacing the number of young Mainers aging into the labor force, according to the report from the Maine Department of Labor’s Center for Workforce Research and Information.
Although the trend seems worrisome, it is actually just a 2 percent decrease in the state’s labor force, researchers said. Jobs are expected to peak around 2026 before declining through 2028, the result of an increase in Mainers aging out of the workforce.
Moreover, a shrinking labor pool could boost employment competition, improve wages and maintain or increase productivity, they said. The coronavirus pandemic is likely to have a lasting impact on the state’s labor market, but it is unclear what the long-term effects will be. Tens of thousands of Mainers remain on unemployment and some sectors including restaurants and hospitality have been hit particularly hard by the economic crisis triggered by the pandemic.
“In the decade through 2028, the labor force is expected to become modestly older and smaller,” the report says. “This situation should not be viewed as a crisis. There is every reason to believe that continued productivity gains will be enough to meet the needs of a population that is modestly increasing in size.”
Maine’s population growth in the past five years has mostly come from people moving into the state. Economists expect that trend to continue or even accelerate in the aftermath of the pandemic as professionals and others move to the state to take advantage of a lower cost of living and remote work arrangements.
“We do not yet know the extent to which the pandemic and other factors may prompt people to move to Maine,” the report says. “If there is a large upswing in migration to the state, the size of the labor force may not contract at all.”
The jobs outlook report comes out every two years and provides a snapshot of labor market conditions and their probable trajectory, said Ed McKersie, owner of Portland recruiting firm Pro Search and founder of workforce development group Live + Work in Maine. It may not, however, take into account seismic changes to the business and employment landscape such as the recently opened Roux Institute at Northeastern University in Portland, a recent $500 million pledge to the state’s economy from the Harold Alfond Foundation, and work from FocusMaine and other groups to bring new employers to the state, McKersie said.
“In Maine, you have to be bullish about the future, especially with the effects of COVID-19,” he said. “If Maine continues to do the things we’ve always done, the report’s outlook make be the way we end up. There is no plugging in the really big investments from very smart people to put Maine on the leading edge of some really important industries.”
In a call with reporters Tuesday, state economists said a 2018 job report elicited a number of inaccurate and misleading news reports and commentary. That report projected the state would only produce 100 new net jobs by 2026.
Some commentators then took the report to mean a stagnant labor pool could and stunted economy, and they worried older Mainers would be forced to put off retirement, delay investment and deprive younger workers of opportunity, said Glen Mills, deputy director of the Center for Workforce Research and Information.
Job growth does not necessarily lead to increasing wages and broader economic growth, Mills said. He pointed to the 1970s, when the number of jobs increased rapidly, but there was high unemployment, weak wage gains and economic turbulence.
The tight labor market in the four years preceding the pandemic, by contrast, produced historically low unemployment and the highest average wage gains on record, he said. Even if the workforce is shrinking, the number of job postings is still high – the department expects 750,000 new job postings through 2028, roughly the size of the state’s entire labor force.
“The notion that even if employment declines this will be a negative situation is not quite right,” Mills said. “A tight labor market incentivizes investment in productivity tools, and drives up wages – that is an incentive for people to remain here and move here.”
Increasing retirement among older workers also should provide new job opportunities for younger workers, Mills said. People at least 65 years old will be a larger part of the workforce than in previous years simply because they will be a larger part of the population, he said. Many “younger seniors” in their upper 60s and early 70s will continue working because they can or want to, not necessarily because they cannot afford to retire.
“For now, it is not that older people have to work, it is just they will work in their older years,” Mills said.
Furthermore, he said it is incorrect to blame Maine’s demographic changes for the difficulty of hiring enough workers across nearly all sectors, aside from the seasonal hospitality and tourism industry.
“The notion that staffing challenges were due to our demographics is not correct,” he said. “It is generally that the economic conditions were very strong, and the hiring challenges occurring in Maine were occurring in the rest of the nation.”
While a tight labor market may raise wages, Maine would be in a better position if it had more in-migration, said Garrett Martin, executive director of the Maine Center for Economic Policy. However, local and state policymakers should help create the jobs, communities and high standard of living that can draw people in, such as a robust state minimum wage and paid time-off laws, Martin said.
“Good public policy can attract more and diverse workers to Maine and build a stronger, people-powered economy,” he said. “We shouldn’t rely on market forces alone to get us there.”
Health care, and to a lesser extent food service occupations, are among the 25 jobs expected to grow the most in Maine by 2028. Retail workers, clerks and administrative assistants, fabricators and educators are expected to experience the highest net job losses, according to the analysis.
Health care, social assistance and hospitality are expected to be the industries with the highest percentage of job growth, while information – including publishing, telecommunications and broadcasting – retail trade, wholesale trade and manufacturing, are expected to experience the highest percentage of job loss, the state projects.
Some of the fastest-growing jobs include solar panel installers, physician’s assistants, information security and operations research analysts, and nurse practitioners. Switchboard operators, data entry professionals, news reporters and correspondents, hand grinding and polishing workers, and executive administrative assistants are expected to have the fastest rate of job losses.
Jobs with the largest annual job openings include low-wage, low-skill positions such as retail sales, restaurant servers, cashiers, janitors and cleaners, and personal care aides. Those positions typically have more openings, part of the normal churn of the labor force as younger workers graduate from entry-level jobs to careers that require training and education, Mills said.
“You will always see lower-paying and lower-skilled jobs with more openings,” he said. “The jobs that have higher requirements in terms of education and skills that take longer to gain and pay well have low turnover rates, as well.”