Mainers’ household incomes dropped 3.3 percent from 2017 to 2018, the largest decrease among the states, the Census Bureau said.

Economists said the figures likely reflect Maine’s aging population and the move of many workers from jobs into retirement, with more limited income. However, the economists also cautioned that the figures are estimates drawn from relatively small sample sizes, and year-to-year changes are less reliable than those recorded over a longer period.

The bureau’s American Community Survey said household income in the state declined from $57,486 in 2017 to $55,602 in 2018, a drop of 3.3 percent. Household income in 2018 was just slightly above where it was in 2014, which was $55,479.

Overall, household income in the U.S. rose by 0.8 percent to $61,937. The bureau said incomes rose in 14 states and also in 10 of the largest metro areas.

John Dorrer, a labor market economist, said Mainers retiring and moving out of the labor force are likely to put the brakes on rising income that would normally come with low unemployment.

Maine’s jobless rate hit 2.9 percent in August and has been below 4 percent for 44 consecutive months.

Dorrer said those retiring often earned higher wages while on the job than they take in during retirement, when they rely largely on Social Security and savings. Plus, those workers’ replacements tend to be younger people who are earning less, he said.

“There’s a long-term trend under way with a changing of the guard in the workforce,” he said.

Maine’s median age of 44.9 years is the oldest in the country, and age is a big factor in employment. More than 80 percent of those 25 to 54 years old are in the workforce, according to the Maine Department of Labor. For those 55-64, that percentage dips to 68.2 percent, and for those 65 and older, it plummets to just 17.3 percent.

And those older than 65 seem to be increasingly unlikely to work. The MDOL said the percentage of those 65 and older who were in the labor force was 20.4 percent in 2015.

The demographics are countering the pressure on wages due to the extremely low unemployment rate, said Maine’s state economist, Amanda Rector.

“It’s working against the upper move of wages caused by the tight labor market,” she said.

But Rector, like Dorrer, also cautioned against reading too much into the figures and said other data has been suggesting that wages are moving higher, although most are slightly different measures than household income. She also said that the Census Bureau bases its estimates of household income on samples of the population, while other measures that show higher wages are based on data from broad-based sources, such as tax figures.

She also said the changes in the demographics of the workforce in Maine will likely continue to counteract at least some of the pressure on wages caused by the low unemployment rate.

Glenn Mills, an economist with the Maine Department of Labor, said he expects household income to grow in coming years because of the low jobless rate.

“Unless there’s a shock to the economy, the labor market in Maine is expected to remain tight, and that’s good for wages,” he said.

Household incomes dropped sharply starting in 2007, just before the Great Recession. In the U.S. as a whole, it has been rising steadily since 2013.

In New England, incomes rose in 2018 from 2017 in Vermont, Connecticut and Massachusetts but declined in Maine, Rhode Island and New Hampshire over the same time period.

The Census Bureau report also found that the poverty rate increased slightly in Maine from 2017 to 2018 and said the number of children living in poverty in the state increased from 33,000 to 35,000. The increase, from 13 to 14 percent, was still below the 17 percent rate in 2016.

But those figures also show a sharp regional disparity in childhood poverty, with the rate at 9 percent in the state’s 1st Congressional District and 20 percent in the 2nd District, which comprises a more rural area of central and northern Maine.

The report also found no change in the percentage of Mainers without health insurance, which was 8 percent. The rate was about 5 percent for children 19 years old or younger, just below the national average of 5.2 percent.


Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.

Kennebec Journal & Morning Sentinel news

Get news and events from your towns in your inbox every Friday.
  • This field is for validation purposes and should be left unchanged.