Maine has its lowest unemployment rate in 40 years, and there is a larger number of Mainers working today than at any time in history.

Good news, right? Not exactly.

It is good news for the people who currently have jobs and for those who are looking for work. A tight labor market should lead to higher wages when employers have to compete for scarce workers.

But it’s not so great for anyone looking to start a business or expand one who can’t get investors interested when there is not a reliable labor pool.

And another trend tracks the decline in unemployment rate should be a cause of concern: It’s the drop in labor force participation rate – the percentage of the population made up of people who are either working or looking for work.

In 2006, Maine’s labor force participation rate was almost 67 percent, exceeding the national average. It crashed during the recession, but unlike the unemployment rate it has never bounced all the way back. It’s currently 63.4 percent, a 3.5 percent drop that represents 46,700 additional people subtracted from the workforce.


This is sometimes characterized as a problem of welfare cheats who don’t want to work, but the real situation is much more complicated. People outside the workforce include those with disabilities and chronic illness like diabetes, as well as family members who stay home care for them or young children and full time students.

Recent research by the Federal Reserve Bank of Atlanta attributes a national drop in workforce participation to something that should be familiar to anyone who’s been paying attention to Maine trends: It’s our aging population.

There are a troubling number of prime age workers who have stopped looking for a job, but retirement is the biggest reason people are leaving the workforce.

All across the country, members of the baby boom generation (born between 1946 and 1964) are hitting retirement age. Maine has the highest percentage of baby boomers in the nation, so we are seeing the biggest impact. This is not going away. In 2014, state economists predicted that we would see the labor force participation rate to shrink by 1 percent a year until 2024, which would leave just over half the state in the workforce.

That’s not sustainable, no matter how low the unemployment rate gets.

Employers are going to have to be more open-minded when they fill jobs. The recent announcement that the Portland Police Department would consider applicants who are not U.S. citizens, or who have smoked marijuana is an example of that. The department has found that good applicants are too hard to find without being willing to talk to people who would have been peremptorily rejected in the past. Other employers may also have to adjust to reality.

Programs to hire people with disabilities and seniors would make a difference. So would broadband expansion to give more people work-from-home options. Vocational training programs and apprenticeships are a good way to make sure that young people get off to a solid start.

But Maine is not going to be able to survive falling off this demographic cliff without help. Young people will need to move here in greater numbers and that includes young people who may have been born in other countries. Without them, the state will change rapidly for the worse.

Until we find a way to grow the workforce, there won’t be much economic news worth celebrating.

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