A recent report found that although Maine bounced back quickly from the pandemic-induced downturn, that recovery has masked “continued underlying weaknesses in the economy.”
Challenges identified in the Maine Center for Economic Policy’s annual “State of Working Maine” report include that many jobs continue to lack basic labor protections — even as workers increasingly assert their power and demand improved standards — and that wage growth has been stymied by high inflation.
The study, authored by MECEP economist James Myall, found that Maine has enjoyed a near-full recovery from the economic shock created by the onset of the COVID-19 pandemic in 2020, with employment almost back to pre-pandemic levels and the state GDP higher than before the crisis. Myall credited the recovery in part to an aggressive fiscal response by the federal government, which provided states and people with funds during the pandemic through various programs.
In all, Maine’s economic bounce back from the crisis was much faster than the recovery from the Great Recession of 2008. After that crisis, the state’s employment and GDP levels lagged behind pre-2008 levels until 2016, which Myall attributed in part to austerity policies, which took place primarily under the LePage administration.
Still, the report found that the recovery from the pandemic is fragile and has hidden several warning signs for Maine’s economy.
Inflation blunting impact of wage growth
One significant problem is inflation, which is higher in the U.S. than at any point in the last 40 years. While a strong labor market has improved wages for Maine workers, the report found that the “rapidly rising cost of living has dulled the benefit” of that higher pay. For example, although wages for middle income workers in Maine have increased by 18% in the last three years, inflation has risen by nearly 13% over that same period. That creates an actual wage growth of just under 5% for workers during that time, which Myall writes is “much more modest than the substantial increase indicated in many news headlines.”
Wages not rising enough to significantly outpace inflation is of particular concern in the child care and direct care industries, the report states. People in both occupations have been chronically underpaid for years, leading to a shortage of such workers. The market has failed to rectify the problem, Myall said, calling for intervention from the state to raise those workers’ wages and provide subsidies for those who need to access services. And while the state has acted to increase child care and direct care employees’ pay, Myall argued it might not be enough to attract workers to the industry, especially given the continued issue of inflation.
Those in the industry are also calling for better working conditions to attract more potential employees.
“Our early childhood education system is sinking. There are so many families in Maine with no options for child care,” Terri Crocker, the owner of Creative Play Childcare in Bath, says in the report.
Given the economic landscape, the Working Maine study makes several recommendations to improve workers wages against inflation. The first is to preserve and expand the state’s minimum wage, which is currently tied to the cost of living. However, MECEP has found that by going beyond that and raising the minimum wage to $16 an hour by 2025, Maine would increase pay for over 350,000 workers and make strides in addressing economic inequality.
Myall also recommends paying direct care workers adequately and requiring employers to be transparent on job applications about the wages that potential workers can expect to receive.
Worker protections must be strengthened
Another challenge to the seemingly strong economic recovery is that labor protections remain scant for too many workers, according to the report. Myall notes that the pandemic caused many workers to reevaluate their relationship to their job, resulting in a significant number leaving for new positions. The amount of Mainers quitting and being hired for new positions recently hit its highest point in two decades, the report found. Higher wages are the prime motivation for workers switching jobs, along with affordable health care, more predictable hours and paid time off.
Given this amount of labor “churn,” Myall argued there is more to be done to improve working conditions for Mainers. Some moderate improvements have been made over the years, including when Maine’s paid time off law took effect in 2022. That law caused the number of Mainers who get paid time off to increase from 33% in the five years preceding the pandemic to 54% this year.
Still, that means a substantial number of Mainers continue to face the potential of financial struggles if they have to take time off for illness, caring for a loved one, or other reasons, Myall pointed out. He argued that the paid time off law should be broadened to encompass more workers and should also include provisions to protect against retaliation, which the statute currently lacks. A bill to bar retaliation by employers against workers who use paid time off was vetoed by Gov. Janet Mills in 2022.
An additional recommendation for improving labor standards is to create a fair workweek standard, which would require business to create predictable schedules for workers. Unpredictable schedules, Myall states, have been shown to negatively impact workers’ bottom line as well as their physical and mental health.
Another policy that would improve workers’ lives is paid family and medical leave, which allows employees to take time off work for a longer period of time. That differentiates it from paid time off, which covers short-term leave. Maine will have a chance to create a paid family and medical leave system in 2023, either through legislative action or via the ballot box, as advocates (including Maine People’s Alliance, of which Beacon is a project) are gathering signatures for a potential referendum.
In discussing how labor standards can be improved, Myall noted the increased leverage workers have right now, as businesses and other employers seek to fill positions.
Much of that power has manifested in increased unionization activity in Maine and nationwide, as workers seek to form collective bargaining units in various industries, including at stores operated by corporate giants such as Chipotle and Starbucks. Worker power has reached heights not seen in decades, MECEP found.
“Now that the country has seen how valuable we are, it’s time for us to demand that we are cared for as well as workers in any other industry,” Brandi McNease, who helped lead a recent unionization campaign at a Chipotle in Augusta, said in the report.
Still, the study found that “as much as worker power has increased, it is still eclipsed by the clout of many corporations and businesses,” with employers often fighting back hard against unionization efforts.
To address such challenges, the report recommends that policymakers guarantee the right to unionize in Maine without interference by bosses. Myall also calls for an improvement to the bargaining power of public sector unions in Maine. Arbitration decisions on wages and benefits for workers in such unions are not currently binding, which allows employers to often ignore workers’ demands. Public sector union workers in Maine are also not allowed to strike, which undermines their leverage, Myall argues.
Finally, the report recommends that agricultural workers be allowed to form unions. Such workers have long been denied basic labor protections, including the right to form a collective bargaining unit or even be considered employees under state wage and hour laws. A bill passed by the legislature that would have allowed farmworkers to unionize was vetoed by Mills in January.
Structural barriers keep too many out of workforce
Another issue Maine faces is that some people can’t participate fully — or at all — in the labor market. Some barriers to employment that Mainers face include health issues, caregiving responsibilities, fewer labor opportunities in rural areas and continued structural racism, according to the study. There are jobs available for such people, Myall found, and including them in the labor market would improve the economy without lowering wages for existing workers.
One indication of Maine’s problems with full workforce participation is that there are fewer prime-age people — 25 to 54-year-olds — participating in the labor market than prior to the pandemic. That dip has not manifested fully in Maine’s overall employment numbers since older workers are staying employed longer, the study found.
Myall states in the report that a reduced number of prime age people in the workforce often indicates that “people are either discouraged about their ability to find a job with a sustainable wage or in some way prevented from working (for example, a health condition, lack of child care, or transportation issue).”
Furthermore, asylum-seekers are currently barred from requesting a work permit for 180 days, preventing another segment of people from joining the labor force.
“I want to have a house and take care of myself, my friends, and my family. It’s difficult to support myself without working,” Gervin Kah, an asylum-seeker in Maine, said in the report.
To address these issues in the workforce, the report argues that the state has to help prime age people return to the labor force while also supporting older Mainers who want to keep working and allowing those who want to retire to do so with security.
There are a number of policy recommendations that could help with this goal, including continuing public health measures to prevent the spread of COVID-19, encouraging employers to make accommodations for those with long COVID, increasing access to health care systems (including mental health services), creating a comprehensive subsidy for child care, maintaining funding for free community college, and enforcing anti-discrimination laws in the workforce.
“Maine lawmakers have the opportunity to build on the momentum begun by workers themselves and reshape the economy in a way that works for all of us — an economy that fairly compensates workers and ensures all work is respected with fundamental rights,” Myall writes.
Photo: A sign at a rally earlier this year to support the Maine Medical Center nurses’ union | Beacon
Evan Popp studied journalism at Ithaca College and interned at the Progressive magazine, ThinkProgress and the Reporters Committee for Freedom of the Press. He then worked for the Santa Fe New Mexican newspaper before joining Beacon. Evan can be reached at email@example.com.
Beacon, October, October 19, 2022, https://mainebeacon.com/