Supporting high-paying, skilled jobs—and attracting new ones—is the bedrock of re-inventing Maine’s economy for a prosperous future.

The following editorial was published by the Portland Press-Herald on July 28, 2024. Read on Portland Press Herald.

It’s a fact: Maine’s economy is in trouble.

New data shows that Maine is among the least productive states in the nation. The state creates fewer jobs, attracts less investment, and starts fewer businesses than most other states. Within those jobs, worker wages are low and have not kept up with costs for food, energy, healthcare, and more. To the experts, Maine lacks many of the hallmarks of a competitive location for business.

However, none of these are forces beyond control. With a strategic plan that builds on current assets and strengths, Maine people can create a distinctive economy that will put us in healthy competition with other states and global partners. An important step is to focus on reviving and growing the bedrock of thriving communities: foundational jobs.

The importance of foundational jobs

Foundational jobs add value by producing goods or bringing in money from outside the state. Historically, Maine’s prosperity came from industries like farming, fishing, forestry, transportation, and manufacturing. For example, before refrigeration, the ice industry employed 90,000 people and would be valued at $660 million today.

Foundational jobs can still be found in those industries, as well as in energy, construction, and new technologies. These jobs drive business expansion, increase tax revenue, and support public services like education, infrastructure, and law enforcement. Without foundational jobs, sustained economic growth is unattainable.

Unfortunately, foundational jobs have steadily declined in Maine. Over the past 15 years, Maine has lost more than 20,000 of these jobs, shrinking from 44% to just 14% of the job market. Since the 2008 recession, Maine’s economy has been the slowest growing in the nation, with projected job growth of less than 1%, compared to the national average of 6%. Worse, these new jobs are mostly in lower-wage service sectors.

This decline has resulted in lower wages, reduced spending, and a shrinking tax base, leading to an economic downturn. Young workers are leaving, contributing to Maine having the highest percentage of people over 65 and, historically, the lowest percentage of people under 18 in the country.

Challenges and the need for a strategic plan

Despite this trend, Maine lacks a long term plan to protect and grow these industries. Foundational jobs have been outsourced or moved to lower-cost states, but Maine faces additional hurdles, including high costs for electricity, heating, healthcare, and taxes, coupled with generally lower wages.

Therefore, what should be a noncontroversial goal—growing good paying jobs that support families and communities—has become political. Issues like tax rates, public spending, education, business regulation, housing, energy and healthcare costs consistently become isolated, cyclical political debates, rather than viewed as pieces to solving Maine’s economic challenges.

Consensus is vital to creating comprehensive, long term solutions to these important challenges.

Opportunities for the future

Technological and industrial developments present new opportunities to expand into tech manufacturing, wireless infrastructure, and other emerging industries that can rejuvenate Maine’s economy. Encouraging small business growth and attracting highly skilled workers will improve tax revenue and drive economic revival.

Only by working together can residents and legislators create needed foundational jobs and deploy a long term economic plan that will secure a brighter future for all of Maine. Key aspects of this plan include:

• Reducing costs for Maine businesses, especially small and medium sized foundational enterprises, so they can take risks and expand

• Training and educating the workforce for skilled trades and foundational job sectors

• Identifying and attracting emerging foundational industries and associated jobs to Maine

• Organically increasing state revenue to support public services and infrastructure

• Reducing costs for resident families and businesses

• Evaluating the long term economic impact of new laws, especially as they pertain to foundational jobs and foundational job security

The state is measuring at the bottom of national economic indicators. Focusing on key industries will create job opportunities, stability, and long-term prosperity.

The following editorial was published by the Portland Press-Herald on July 28, 2024. Read on Portland Press Herald.

Maine is a beautiful state with a lot to offer residents and visitors alike: abundant natural resources, some of the best national parks and scenery in the country, and a welcoming population that prioritizes hard work and community.

However, it faces a significant hurdle in sustaining a good way of life. It has one of the smallest and slowest growing economies in the country. On top of that Maine’s workforce is getting smaller as people move out of state and the remaining population ages.

The result? Many jobs are shifting from production-focused, foundational jobs to service jobs, making many of the jobs here among the lowest-paying in the nation. Economic experts believe the state will see less than 1% job growth over the next several years.

Why has Maine’s economy struggled while the economies of other states have flourished? Don’t try to point fingers at anyone. Maine lacks a forward-thinking, non-partisan, strategic plan to place itself at the forefront of one or more economic industries.

Why Maine needs a strategic vision now

For generations now, Maine officials and voters have been enacting legislation and public policies that address issues in isolation without an overall plan, accompanying research into long-range effects, or data about current trends. Over time these actions have piled atop each other with unexamined cumulative effects, until now.

New data show that Maine ranks in the bottom ten of major economic indicators more often than any other state, sometimes by a wide margin. We also know that dozens of quality Maine companies have been sold to out of state owners in recent years, just part of a decades long trend. The state attracts less investment and creates fewer jobs than most other states. Within those jobs, worker wages are low and must keep up with higher living expenses. To the experts, Maine simply lacks the hallmarks of a competitive location for business.

However, none of these are forces outside of people’s control and change has been made before (see sidebar). With a strategic plan that builds on current assets and strengths, Maine people can create a distinctive economy that will put them in healthy competition with other states and global partners.

A Strategic Plan for Maine’s Economy

1. Strengthen Maine’s Workforce with Foundational Jobs

Maine’s economic revival starts with a focus on foundational jobs—those in industries like forestry, fishing, construction, manufacturing, and transportation. These industries provide stable, well-paying careers that attract and retain young workers, ensuring long-term economic growth. By leveraging Maine’s natural resources and fostering emerging industries, workforces can be rebuilt, and families will be encouraged to put down roots, and revitalize local communities.

2. Enhance Maine’s Business Competitiveness

To become a more attractive destination for businesses and entrepreneurs, the state must reduce regulatory barriers, lower operational costs, and create a pro-growth economic environment. Small and medium-sized businesses, especially those that provide foundational jobs, should receive targeted support to expand, innovate and compete with neighboring states. A strong state economic brand, highlighting Maine’s strengths—its workforce, resources, and quality of life—will further attract investment.

3. Legislative and Regulatory Reform

Maine’s economic policies should work cohesively, rather than in isolation. A comprehensive, data-driven approach to lawmaking will ensure policies are evaluated for their long-term impact on job creation, investment, and economic stability. This includes assessing how new laws affect foundational industries, the tax base, housing affordability, and workforce retention.

4. Lower Costs for Businesses and Families

High taxes, energy costs and living expenses drive both businesses and residents away. Reducing these burdens through common-sense policies will make Maine a more affordable place to live, work, and invest. Cost reductions will allow businesses to expand and take risks while making home ownership and family life more attainable for Maine’s workforce.

5. Increase Revenue Through Growth, Not Higher Taxes

Rather than raising taxes, Maine should focus on expanding its economy by supporting industries that bring in revenue from outside the state, such as tourism, exports and online commerce. A thriving business sector will naturally increase tax revenues, funding essential public services and infrastructure without placing additional financial strain on residents.

How to build consensus in a divisive time

Certainly, one of the top challenges with creating, maintaining, and enacting a successful strategic plan lies in aligning different interests. People are often self-interested and may not initially support what is best for the state’s economy as a whole.

But there are ways to align people toward the greater good of the state. When foundational jobs take up a major part of the economy, Maine sees serious economic growth and other major advantages. A solid strategic plan should also provide a vision and incentives to stimulate economic growth across the board. It should enable faster alignment on key issues, like government policies or tax incentives, when job and business growth benefit more of the population.

By prioritizing foundational jobs, fostering a pro-business environment, reforming regulations, reducing costs, and growing revenue through economic expansion, Maine can build a sustainable and competitive economy to secure a brighter future for all of its residents.

Chair of the Maine Jobs Council, Joe Edwards, and Hebert Construction owner Tim Hebert sat down with the folks at Lydia’s Lunch Bunch podcast to discuss strengthening the local economy in Lewiston Auburn by attracting investment, talent, and jobs.

Both Joe and Tim shared experiences and ideas which will hopefully lead to reinventing compromise and allow Maine to compete in the national job market.

Stream the episode below!

State lacks comprehensive strategy for job growth, economic prosperity

Augusta, ME – A new analysis conducted by experts in economic competitiveness ranks Maine poorly against other states in key benchmarks, including worker productivity, job growth, business creation, and innovation. The “Maine Competitiveness Assessment,” commissioned by the Maine Jobs Council and conducted by Porter Development Initiative Consulting (PDI), is a comprehensive assessment of Maine’s competitive position for attracting jobs, investment and talent into the state and, for existing Maine businesses, how Maine’s policies, cost structures and workforce impact their ability to succeed in the national and global economy.

“This analysis documenting Maine’s lack of competitiveness and its impact on our economy should be a wake-up call for Mainers to work together for a better future,” said Joe Edwards, Executive Director of the Maine Jobs Council. “Jobs, private investment and workers all have choices about where to go. This assessment takes an honest measure of Maine’s ability to compete for these key ingredients for economic growth. Today, we have economic plans that simply look inward but ignore the fact that there’s a whole world of economic competition out there. As a result, these plans are silent on what it will take for Maine to attract companies to our state or to help our existing businesses thrive to grow good-paying jobs and sell high-value products and services beyond our borders.”

With roots in the Harvard Business School Institute for Strategy and Competitiveness founded by Professor Michael E. Porter, PDI utilized its proprietary model for understanding the central role of competitiveness among locations and applied them to Maine’s economy. These include use of its “Diamond Model” for measuring the quality of the business environment, an analysis to identify existing and emerging cluster strengths, and recommendations for the role that clusters can play in enhancing regional economic development.

“Key measures of competitiveness indicate that Maine is not attracting new employment at the same rates as other areas of the U.S. and that existing firms in Maine are not achieving the high levels of productivity that would support increasing wage levels for employees,” said Rich Bryden, primary analyst and author of the report for PDI.

Bryden continued, “Particularly given the structural transformations underway in both the national and Maine state economies, an effective economic development strategy must build on Maine’s current assets and strengths, but it also must create the conditions for Maine to compete successfully in national and global markets.”

Key findings of the study include:

• Low Productivity: Maine ranks #41 among U.S. states for economic output per capita and #46 per worker.
• Labor Force: Although labor force participation rate is higher than the national average among working-age Mainers, total labor force participation rate is less than 60% and ranks #39, due to the fact that the state has the highest proportion of residents over 65 in the nation.
• Low Job Creation and Business Starts: Maine ranks #37 for private job creation, #44 for employment growth driven by foreign direct investment, and #50 for new business formation per capita.
• Low Wages: Lagging productivity and low economic activity depress wage rates and incomes in Maine. Although wages have grown more rapidly in Maine than the U.S. average since 2010, the state still ranks #34 for average wages. Even in typically higher-wage “traded cluster” jobs, Maine wage levels are more than 20% below the U.S. benchmark.
• Challenging Business Environment: Maine’s low rate of new business formation, low R&D and innovation intensity, rising cost of living and slow growth in jobs related to foreign direct investment all signal weaknesses in the business environment. Maine currently ranks #44 in patenting intensity and #46 for university research and development spending. High industrial electricity costs, state and local tax burdens also pose challenges.
• Few Strong Employment Clusters: Maine has a significantly lower proportion of employment in traded clusters. Among “strong” traded clusters, Maine’s proportion of employment is just 5.5% compared to 14.3% across all regions in the U.S.

In evaluating Maine’s current economic plans, the report concludes that the current underperformance of Maine’s economy derives directly from being uncompetitive across a range of key factors for success. Turning that around requires a comprehensive, integrated, and strategic plan that focuses legislation, regulation, and public policy on talent attraction, investment, and job creation.

The full report and exhibits can be found at: https://mainejobscouncil.com/competitiveness About Maine Jobs Council Founded in 2019, the Maine Jobs Council has been advocating for economic prosperity by promoting the attraction, growth and preservation of foundational jobs in Maine. This we believe is for the benefit of generations to come. We are a statewide, nonpartisan, member-driven advocacy organization of over 200 business leaders throughout several sectors across Maine.

Employers are finding it harder and harder to make it work here. We turn a blind eye to that at our peril.

The following editorial was published by the Portland Press-Herald on July 28, 2024. Read on Portland Press Herald.

It was the kind of news that could have come and gone from the inbox unnoticed.

Sent by the statewide advocacy body the Maine Jobs Council, the subject line read: “Maine Drops to 9th Worst State for Business in New Study.”

Any mention of a “new study” is generally a red flag for a time-pressed journalist. And yet, the content of this email gave us pause-perhaps because its message was all too familiar. According to CNBC’s annual roundup of the best U.S. states in which to do business, Maine hobbled over the finish line this year, at the very back of the pack.

Our drop from 39 to 42 was, according to the executive director of the Maine Jobs Council, Joe Edwards, attributable to CNBC’s putting more emphasis on “infrastructure, access to investment, and business friendliness – categories where Maine has consistently ranked low.”

Edwards, a former state insurance superintendent and administrator of statewide workers’ compensation insurance funds, continued: “Workforce also remained an important category, and our ranking plunged from 22 to 46. Workforce, productivity, investment, taxes and

infrastructure are all categories that impact prosperity, growth, employment and quality of life. Maine is in a very select group of states that score poorly in all of these categories.”

We need to get out of this select group. The long-term economic health of the state of Maine matters. If this statement is as obvious as it seems, why aren’t we taking the rehabilitation of our business environment more seriously?

In an op-ed in these pages back in March (“In order to thrive economically, Maine has to compete”), Derek Volk, the CEO of Biddeford-based Volk Packaging Corp. and Volk Paxit, outlined the specific challenges faced by his business in recent times: losing millions of dollars in sales to companies that have chosen to depart Maine, to out-of-state acquisitions (which often result in a disbanding of the Maine-based operation) and to business closures.

In his opinion piece, Volk attributed this trying landscape to “high costs, high taxes and high regulatory burdens.”

Economically, to look at the stats and figures, Maine has been faring well in recent years. Federal data released at the start of this year showed the state leading New England in terms of economic growth; the pandemic brought new people and new cash into the state – remote workers and choosy retirees among them. These new arrivals make a difference when it comes to personal income, dividend payments and so on.

That uplift cannot hope to compare, however, to the meaningful security offered by a robust base for small and medium enterprise. We can’t let relative fiscal comfort create any complacency about the burning need for a new, forensic review and a comprehensive strategy that aims to make Maine as good a place for businesses as it is for residents.

The Maine Jobs Council issued the following statement regarding CNBC’s recent publication of this year’s “America’s Top States for Business,” in which Maine’s ranking dropped from #39 to #42.

“Maine’s drop to the ninth worst state for business is disappointing, but not surprising. For years, Maine has ranked in the bottom ten in a variety of state rankings including workforce, productivity, business environment, and more. We only seem to make the ‘top ten’ in areas like high cost of living, high tax burden, federal dependency, and cost to do business.

“Some of the reasons Maine’s ranking dropped this year are that CNBC put more emphasis on infrastructure, access to investment, and business friendliness—categories where Maine has consistently ranked low. Workforce also remained an important category, and our ranking plunged from 22 to 46!  Workforce, productivity, investment, taxes, and infrastructure are all categories that impact prosperity, growth, employment, and quality of life.  Maine is in a very select group of states that score poorly in all of these categories.

“The bottom-line is that Maine is not competitive to keep or create jobs, which are the fundamental driver of our economy. The state very much needs a comprehensive analysis to determine why we’re not competitive followed by a strategic plan to remedy our shortcomings so we can win the competition for talent, investment, and jobs.”

For more information about Maine’s competitiveness rankings, please visit: https://mainejobscouncil.com/rankings/

Maine’s high costs, high taxes and high regulatory burdens make it hard to succeed here.

In a recent article by Stephanie Grindley, CBS13 I-Team:

BIDDEFORD (WGME) — While the state says job growth is booming, Maine is seeing another trend not obvious on the surface: a number of family companies are moving out-of-state.

“Went to North Carolina, some went to Mexico,” third-generation business owner Derek Volk said.

While Volk chooses to keep his company, Volk Packaging, in Biddeford, he says those around him are leaving the state.

“Bangor Hydro, CMP, Kris-Way Trucking, Augusta Fuel, it’s a very long list,” Maine Jobs Council Chair Joe Edwards said.

Edwards handed the I-Team a list, to his recollection, of departing businesses.

“There’s 50 or 60 of them within my knowledge. I mean, I’m just one attorney dealing with just a few hundred,” Edwards said.

The list is made up of all Maine names we’ve come to know but are no longer Maine-owned.

View MJC Maine Rankings PDF

“Why would you be concerned about businesses being bought out of state?” CBS13 I-Team Reporter Stephanie Grindley said.

“Well, when a business gets sold out of state, a lot of things happen that aren’t really evident, at least on the surface,” Edwards said. “Typically the top salaries are eliminated. The management is done by out-of-state companies.”

Top salaries, Edwards says, will take their top taxes with them.

“It’s a ripple effect,” Volk said.

From his own list of customers, Volk estimates he’s lost well over $3 million in sales to companies moving.

“I can tell you that when a customer sells to a bigger company, we just start a stopwatch and wait until they leave,” Volk said.

He believes Maine’s taxes, workers’ comp, high labor costs and paid family leave are some of the reasons businesses move their headquarters to neighboring states.

“That makes it very difficult for businesses to be competitive,” Volk said.

While Derek Volk chooses to keep his company, Volk Packaging, in Biddeford, he says those around him are leaving the state. (WGME)

Volk is a member of the Institute for Family-Owned Business, who we reached out to for input on this story. He says many other small business owners he’s met through the group feel the same way as he does.

The I-Team brought these concerns to the commissioner of Maine’s Department of Economic and Community Development, Heather Johnson.

“We love local headquarters. We have great companies like IDEXX and L.L. Bean,” Johnson said.

It turns out, the state does not specifically track acquisitions of Maine businesses. So, we asked the commissioner about that list from the Maine Jobs Council.

“When you see a number of businesses leaving the state, being acquired by out-of-state companies, is that a concern to your department?” Grindley said.

“Obviously, as companies move, we’re always concerned,” Johnson said. “We don’t want anybody to leave and we want new people to come. So, we never want to see that, but we also see a lot of growth. We saw 15,000 net new companies last year.”

Johnson says the list provided by the Maine Jobs Council is just one indicator of the ebbs and flows of capital investment. According to the state, new businesses need to start thinking about global climate solutions in order to pave a longer runway in Maine. But aside from the new businesses, for the businesses that have been around for generations, it’s a time of transition.

“We do live in a global economy and capital comes from a lot of places. When you look at Maine businesses, a lot of them are looking at a logical place to transition,” Johnson said. “So, we’re seeing major companies transition into employee-owned.”

While the state says job growth is booming, Maine is seeing another trend not obvious on the surface: a number of family companies are moving out-of-state. (WGME)

Volk says that is the obvious next step for his company.

“It’s not just my succession plan, I have to think about everybody’s succession plan,” Volk said.

“What do you think would change the most for Volk Packaging if it was acquired?” Grindley said.

“Probably the biggest change would be the culture. We’re a family business. We run it like a family business,” Volk said. “This year will be our 49th year sponsoring Little League. If I sold to International Paper, for example, do you think they’re sponsoring five Little League teams? Probably not.”

The CBS13 I-Team asked the state if there are any efforts to keep businesses in Maine.

Johnson touched on the new tax incentive plan, Dirigo Business, that passed last session. She says it opens up capital investment opportunities, which gives tax breaks to companies that invest or expand in our communities.

Read the article on CBS13 WGME: Click Here

Last Friday evening, with little debate or time to review significant amendments, the Committee on Labor and Housing moved LD 1564 – a proposal to reform