workforce trends & outlook in maineoutlook in maine glenn mills chief economist center for...
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Workforce Trends &Outlook in Maine
Glenn Mills
Chief Economist
Center for Workforce Research
Maine Department of Labor
www.maine.gov/labor/cwri
207-621-5192
Presented to
Consensus Economic Forecasting CommissionMarch 29, 2019
Conditions & Trends
Labor market conditions are very tight. The unemployment rate has been below 4% for a record 38 consecutive months.
5 of the 6 measures of labor underutilization are the lowest on record and lower than the nation
0%
2%
4%
6%
8%
10%
12%
14%
16%
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Pe
rce
nt
Alternative Measures of Labor Undertilization - Maine
U-6, U-5 plus part time for economic reasons
U-5, U-4 plus marginally attached workers
U-4, U-3 plus discouraged workers
U-3, Unemployment Rate
U-2, Job losers & tempory job completers
U-1, Persons unemployed 15 weeks or longer
Nonfarm payroll job growth continues
Construction is down over the year and remains well below highs prior to the last recession
Manufacturing jobs have stabilizedafter three decades of declines
Retail jobs have been relatively unchanged in the last decade at a lower level than prior to the last recession
Jobs in the financial activities sector are rising, but remain well below more than decade ago levels
The professional and business services sector continues to grow
Healthcare and social assistance is the largest sector and continues to add jobs
The leisure and hospitality sector continues torise and remains highly seasonal
Local government jobs have stabilized;63% are in schools
State government continues to shed jobs(this includes the University and Community College Systems)
The number of very low wage earnershas declined sharply since 2013
20,000
40,000
60,000
80,000
100,000
2010 2011 2012 2013 2014 2015 2016 2017 2018
Minimum Wage $7.50/hour $9/hr $10/hr
Nu
mb
er
of
Earn
ers
by
Ho
url
y W
age
in T
he
ir P
rim
ary
Job
$20 or more
$15 to 19.99
$12 to 14.99
$10 to 11.99
Less than $10
This represents the 53% of workers who are paid at hourly rates in their primary job. The 47% who are paid salary, commissioner, or through other arrangements are not included.
$39,000
$41,000
$43,000
$45,000
2001
2002
2003
2004
2005
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2010
2011
20
12
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15
2016
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2018
4 Q
uart
er
Avera
ge W
age (
in 2
018Q
3 $
)
Recession caused average wage to rise as least senior people were let go and fewer hires of entry level staff.
Hiring in a slack labor market environment drove average wages down
Competition to attract and retain staff in a tight labor market caused an acceleration in the rise in average wages
Inflation-adjusted average wages increased at the fastest rate in nearly two decades over the last four years
The average wage per job is much lower than the national average, but earnings of residents are much closer. The high share of seasonal hospitality jobs and other factors
push the wage average down.
76%
80%
84%
88%
92%
96%
20
12
20
13
20
14
20
15
20
16
20
17
Mai
ne
% o
f U
.S.
Median Earnings of Full-Time,Year-Round Workers
Median Earnings, All Wokers
Average Wage per Job
Job growth has been concentrated in urban areas largely because the sectors that are growing tend to be concentrated there –especially healthcare and professional services.
Long Term Demographic Trends Impacting Economic
Growth Potential
The population has not change much in the last decade. Two factors underlie this:
900,000
1,000,000
1,100,000
1,200,000
1,300,000
1,400,000
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00
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Po
pu
lati
on
The primary factor slowing populationgrowth is fewer births per year…
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12,000
16,000
20,000
24,0001
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0
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Bir
ths
& D
eath
s Pe
r Ye
ar
…And rising deaths, primarily due to alarger senior population. Maine had negative
natural change 7 of the last 8 years.
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20,000
24,0001
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Bir
ths
& D
eath
s Pe
r Ye
ar
Births
Deaths
Birth rates in Maine are lower than thenation and much of the advanced worldB
irth
s p
er
1,0
00
po
pu
lati
on
-4,000
0
4,000
8,000
12,000
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Net
Ch
ange
fro
m P
rio
r Ye
ar
Net Migration (Moved In - Out)
Natural Change (Births - Deaths)
The second factor that slowed population growth in the last decade was little net in-migration. There has been an acceleration recently, which will need to be sustained to offset natural decline.
Continuing a long term trend, the population increased in the south, didn’t change much in central and mid-coast regions, and decreased in north of the state since 2010.
(The change in total population is the balance of natural change and net migration, though totals by county don’t exactly add up for technical reasons.)
Only Cumberland and Androscoggin counties have had significant natural increase since 2010.
Migration since 2010 has been uneven across the state. Seven counties, mostly in the north, had a net outflow of nearly 7,800 people; nine counties had a net inflow of 21,500 people, 75% of which was in York and Cumberland counties.
0
0
0
0
0
1
1
1
1
1
1
0
4,000
8,000
12,000
16,000
20,000
24,000
0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84
Po
pu
lati
on
by
Year
of
Age
1960
The decline in births caused a population imbalance. Baby boomers advancing in age had a major impact on the economy.
The decline in births caused a population imbalance. Baby boomers advancing in age had a major impact on the economy.
0
0
0
0
0
1
1
1
1
1
1
0
4,000
8,000
12,000
16,000
20,000
24,000
0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84
Po
pu
lati
on
by
Year
of
Age
1970
0
0
0
0
0
1
1
1
1
1
1
0
4,000
8,000
12,000
16,000
20,000
24,000
0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84
Po
pu
lati
on
by
Year
of
Age
The decline in births caused a population imbalance. Baby boomers advancing in age had a major impact on the economy.
1980
0
0
0
0
0
1
1
1
1
1
1
0
4,000
8,000
12,000
16,000
20,000
24,000
0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84
Po
pu
lati
on
by
Year
of
Age
The decline in births caused a population imbalance. Baby boomers advancing in age had a major impact on the economy.
1990
0
0
0
0
0
1
1
1
1
1
1
0
4,000
8,000
12,000
16,000
20,000
24,000
0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84
Po
pu
lati
on
by
Year
of
Age
The decline in births caused a population imbalance. Baby boomers advancing in age had a major impact on the economy.
2000
0
0
0
0
0
1
1
1
1
1
1
0
4,000
8,000
12,000
16,000
20,000
24,000
0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84
Po
pu
lati
on
by
Year
of
Age
The decline in births caused a population imbalance. Baby boomers advancing in age had a major impact on the economy.
2010
0
0
0
0
0
1
1
1
1
1
1
0
4,000
8,000
12,000
16,000
20,000
24,000
0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84
Po
pu
lati
on
by
Year
of
Age
The decline in births caused a population imbalance. Baby boomers advancing in age had a major impact on the economy.
2020
We went from young to middle-aged, on the verge of a massive wave of retirements, in 50 years…the length of a career
0
4,000
8,000
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20,000
24,000
0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84
Po
pu
lati
on
by
Year
of
Age
1970 2020
Maine’s median age of nearly 45 years is thehighest in the nation and is up 56% since 1970
25
30
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45
1940 1950 1960 1970 1980 1990 2000 2010 2017
Me
dia
n A
ge
United States
Maine
Workforce Outlook to 2026
Media coverage of our forecast of no net job growth from 2016 to 2026 described a grim situation
“Department of Labor predicts that the state will have virtually zero growth in jobs”
“Maine’s economy will struggle to tread water”
“…companies will not invest if they don’t think they will be able to hire workers and workers don’t move to a place where there are no jobs (which) means that the state will have few options available to change the cycle.”
Department of Labor “projects with a shortage of young workers, the Mainers who live and work here now will stay on the job longer.”
“The report is the latest evidence that Maine is on a path to long-term economic stagnation…and young Mainers leaving the state for better opportunities elsewhere.”
The labor market is more dynamic than those characterizations, even when there is little growth
There is a constant flow of people into and out of the labor force over time: young people reach working-age, older people retire, some take time out of labor force to gain an education or work credential or to raise children, and then return to work. Others advance their job knowledge, skills, and qualifications that allow them to move up the career ladder. Some people relocate to another community for a better job or for other reasons.
Notions of stagnation and lack of opportunity miss what is actually happening. There will be very large numbers of job openings each year to replace those who will be retiring. There is every reason to believe that wages will continue to rise as a result of continued low unemployment and competition for staff.
Automation has already replaced humans in many routine or repetitive tasks. Human resource challenges should lead to innovations in the production of goods and delivery of services. Advances in artificial intelligence will expand technology into the realm of cognitive and problem solving functions.
The 25 to 54 age group, which has the highest rates of labor force participation, peaked in the early 2000s. The 15 to 74 group, which includes nearly all working people, is peaking
and will gradually subside over the next decade.
250,000
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850,000
1,000,000
1950 1960 1970 1980 1990 2000 2010 2020 2030
Po
pu
lati
on
15-74
20-64
25-54
As a result, we expect little labor force changethrough 2026, continuing the recent trend
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Civ
ilia
n L
ab
or
Fo
rce
Baby boomers entering workforce
Baby boomers exiting workforce1930s depression
& World War II birth dearth