Maine’s unemployment rate just notched a run of 36 months – and counting – under 4.0 percent.

But experts say Mainers, especially those who own or operated a business, should hold off on popping champagne corks. The flip side of low unemployment is a tight labor market, and employers continue to experience real difficulty in finding and keeping hires. That can spell trouble for the state’s economy.

The state Department of Labor said Friday that the unemployment rate in November was 3.4 percent, unchanged from October and up a bit from 3.1 percent in November 2017. The last time it was 4.0 percent or above was in November 2015.

The rate has been in a long, steady decline since June 2009, the tail end of the recession, when the jobless rate topped out at 8.3 percent. The jobs lost in the recession of 2008-09 in Maine were recovered by the spring of 2017, although the recovery in Maine has been uneven and lagged behind most of the rest of the country. Still, the unemployment rate bottomed out at 2.7 percent in March, the lowest it had been in the state in 60 years.

The numbers now suggest good times – at least in relation to the number of jobs available – have returned. But the lack of those looking for a job – just 25,000 or so statewide – will make it hard for businesses to start or expand and may lead to sharply higher pay to get people to work. Need proof? Check out the help wanted signs next time you go shopping or stop at a fast-food restaurant.

Early this month, a South Portland barbecue restaurant offered a year’s worth of daily free meals to anyone who referred a worker who is hired and stays on the job. But the owner said it was difficult to even find someone to show up for a job interview, let alone stick with it and go to work every day.

The difficulty of filling jobs is likely to hurt the state economy and pinch tax collections, among other consequences, said John Dorrer, a labor economist and former director of the Maine Department of Labor’s Center for Workforce Research and Information.

“One of the real challenges we have in Maine right now is this persistence of unfilled job openings,” Dorrer said.

MILLS’ WORKFORCE PLANS

The situation had prompted Janet Mills to run on a workforce development platform that included luring former Mainers to return to the state and work remotely. The governor-elect also has proposed state help in training workers, providing low-interest loans to small businesses to help finance hiring a new worker and giving grants to communities that convert buildings to co-working spaces with high-speed broadband access for remote workers.

But those plans will require legislative approval and funding, and Dorrer said it likely will be hard for Maine, the state with the oldest population in the country, to attract younger workers.

“This is a problem that’s going to be around for some time, given Maine’s demographics,” he said. It will be difficult to entice workers to pick up and move here, he said, particularly for low-pay jobs.

“Maine is perceived as an end-of-the-line destination,” he said, and suggests programs that try to get people who are already in Maine back in the workforce. For instance, Dorrer said, tax credits could help businesses take a risk by hiring people who have been unemployed so long they are no longer considered part of the workforce – those that have stopped looking for a job after exhausting unemployment aid, for instance.

He also said that recent high school graduates who don’t go on to college or vocational schools are on the margins of the workforce and could get additional training to increase the pool of workers.

Another potential group of workers is those who have failed drug tests to get a job, or older workers who have been getting Social Security disability aid – all could get help to address the issues that keep them out of the workforce, Dorrer said, and employers could look for workers who have been working part-time involuntarily.

“This gets into a whole new territory and we haven’t embraced it (expanding the pool of potential workers) like they have in Europe,” he said, “but given the tightness in the labor market, we may have to.”

HIGHER WAGES, PRODUCTIVITY

One industry hit hard by the taut labor market is fuel oil companies, said Jamie Py, the president and chief executive officer of the Maine Energy Marketers Association.

Many of those companies are short on drivers who deliver fuel to customers’ homes and businesses, Py said.

“It’s not as sexy as people think it is,” he said, “it’s like trying to make polka music sexy.”

Py said companies are hamstrung by rules that require drivers to be at least 21 and also bar those with some illnesses, such as diabetes, from driving fuel trucks.

MEMA has been lobbying Maine’s representatives in Congress and federal regulators to loosen the rules, Py said, while also trying to persuade insurers to lower rates for young drivers of fuel trucks. But so far, the organization hasn’t made much progress, he said, and is pushing for permission to launch a pilot program for young drivers to alleviate the labor crunch.

Other industries and groups also have launched recent initiatives: the Maine Tourism Office set up a staffing service to help companies fill seasonal jobs; lobster dealers are partnering with the Department of Corrections to offer certificate programs to offenders that will qualify them for jobs once released; and job fairs are trying to link employers with people in recovery.

Some efforts have been ramping up, especially apprenticeship programs that can lead young people into good careers.

Dorrer said Maine businesses are going to have to be nimble and innovative to ease the pinch and not rely on luring more workers here to fill the jobs.

“We need to look for the low-hanging fruit,” which is the people who are already here, he said. “The costs of not filling these vacancies are growing.”

But Glenn Mills, chief economist of the Maine Department of Labor, said the difficulties caused by problems hiring people in an era of low unemployment might be overstated.

“It’s a challenge for employers, but there are two sides to the coin,” Mills said.

One benefit is rising incomes, he said. In Maine, average wages rose by 6.1 percent to $44,623 from June 2014 to June 2018, the fastest pace for any four-year period since the late 1990s to mid-2000.

Another is that many businesses can start or expand without a lot of bodies on the job, he said. While hiring workers is often looked at as the only option, he said, tightness in the labor market can lead to innovation, where companies find other ways to get the job done, usually through automation.

That leads to productivity gains, he said, which are very beneficial in the long run.

“Rising productivity is the key to higher standards of living,” he said, and the focus on increasing the labor pool as the best, or only, solution to a smaller pool of job-seekers is too narrow.

“Some of that narrative misses out” on the benefits of long-term low unemployment, Mills said.

Edward D. Murphy can be contacted at 791-6465 or at:

[email protected]


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