State unemployment rate is down, but not because Mainers found jobs

State unemployment rate is down, but not because Mainers found jobs

The latest figures released by the Federal Bureau of Labor Statistics (BLS) reinforce a persistent trend for Maine’s economy.  The state continues to struggle to recover from the Great Recession, and the labor market, in particular, lags behind.

The latest release of monthly data for December 2015, shows that Maine’s seasonally-adjusted unemployment rate stands at 4.0% – below the national average of 5.0%.  Initially, this appears to be good news, as Maine Labor Commissioner Jeanne Paquette boasted to the media.  However, to focus only on the headline unemployment rate misses a worrying trend.

While Maine’s unemployment rate has been on the decline for some time, this is largely due to the decreasing size of the labor force, as more individuals stop looking for work for a variety of reasons – sickness, disability, childcare, retirement or a lack of available work.

The BLS reported 649,796 people employed in Maine in December 2015 – that’s actually 5,869 fewer than a year before,[1] even as the headline unemployment rate fell from 5.5% to 4.0% .  Nationwide, the U.S. saw a healthy increase of 220,000.  Employment numbers are down 8,600 since Gov. LePage took office in January 2011, and a massive 22,000 from their pre-recession peak.

Employment data 12-2006 to 12-2015website

The latest report by the Maine Revenue Forecasting Committee predicts Maine will only reach its pre-recession level of payroll jobs by 2019 – 12 years after the economic downturn.  To put that in perspective, the U.S. recovered its pre-recession level of employment by 2014.  Even that slow pace of recovery, however, may be unrealistic, given the continued decline over this past year.

So while the employment rate continues to drop, it’s important to look behind the headlines to see what’s really going on.

[1] When non-payroll and farm jobs are excluded, the estimate for December 2015 Is 613,300 – up 8,300 over the year.

Photo: Governor Paul LePage with Labor Commissioner Jeanne Paquette at a May, 2015 press conference, via Andi Parkinson

About author

James Myall
James Myall 20 posts

James is a policy analyst for the Maine Center for Economic Policy. He holds a master’s degree in ancient history and archaeology from the University of St. Andrews in Scotland and is a candidate for a master’s degree in public policy and management from the University of Southern Maine (USM). He has previously served as coordinator of the Franco-American Collection and an adjunct professor of American history and government at USM, Lewiston-Auburn College.

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