Economic growth report says Maine's red flags shadow short-term economy

Courtesy / Maine Development Foundation The 2020 Measures of Growth Report by the Maine Development Foundation and Maine Economic Growth Council, has red flags and gold stars related to the state's economic growth.

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By Maureen Milliken

Maine earned some gold stars this year for economic growth, but the gains were outweighed by the red flags — some of which weren't caused by the COVID-19 pandemic, just laid bare by it, according to the annual Measures of Growth report.

The 26th annual report, released Wednesday, shows there's "reason for optimism" in the long term, but the short-term challenges to improving the state's economy are many. The report by the Maine Development Foundation and Maine Economic Growth Council, measures Maine's progress, lack of it and backsliding over 29 metrics.

The report looks at data to determine its findings. "And the data looks pretty stark," Yellow Light Breen, Maine Development Foundation's president and CEO, said at a news conference unveiling the report Wednesday. "This is going to take a lot of focus."

The report calls for "renewed urgency in the face of COVID-19," which has resulted in not only recession, but also exacerbated the state's "persistent systemic racism."

"The pandemic and resulting missed paychecks, closed schools and shuttered businesses tipped many Maine households into stressful, precarious situations and hit non-white, low-income and rural households disproportionately hard," the report says.

The report this year added racial and ethnic income equity as one of its indicators to better reflect the effects of the pandemic. Those behind the report said the pandemic didn't create the problem, it just made it more obvious.

Red flags not only are racial and ethnic income inequity, but also worker productivity that's lower than the national average, spending on research and development that's also lower than the national average, a higher cost of doing business, and more.

Breen said improving Maine’s economy "requires both brutal honesty and unquenchable optimism."

"The indicators reinforce that talent, innovation, and infrastructure must be the focus for strategic investment — while also maintaining public health, a clean environment and vibrant communities," he said.

It also added pre-kindergarten education, something Maine gets a gold star in for being ahead of the national average.

Steve Van Vogt, president of the Maine Economic Growth Council, said the report is more important than ever in building understanding of the state's long-term assets and challenges, "so we prioritize and sustain the investments that can help us recover and return to prosperity.”

Gold stars, red flags

The pandemic reinforced two "gold star" qualities of low crime and clean air, said Sheena Burrell, of the growth council. "Rural Maine saw a welcome influx of out-of-staters," drawn by those elements, she said.

Gold stars for significant progress went to:

Pre-kindergarten education: 46% of Maine four-year-olds were enrolled in public pre-K in 2018-19, well above the U.S. and New England averages.
Safety: Maine’s crime rate in 2018 was 43% below the national rate and among the lowest of the 50 states.
Air Quality: Maine’s air quality is better than other Northeastern states. The number of moderate (23) and low (1) air quality days in 2019 were the lowest on record.

Red flags for "needed attention" are:

Racial/ethnic income equity: From 2014 to 2018, the average per-capita income for White non-Hispanic Mainers was 60% higher than Maine residents of all other races and ethnicities.
Workforce: The workforce shrank by 2,900 people between 2014 and 2018.
Value added per worker: Worker productivity in Maine is among the lowest of the 50 states.
Research and development expenditures: Maine’s total spending on R&D was 0.8% of total GDP in 2017, which ranks 46th of the 50 states
Cost of doing business: In 2019, Maine’s cost of doing business ranked 7th highest in the U.S., ranking worse than New Hampshire, Rhode Island and Connecticut.
Eighth grade math: 34% of Maine eighth-graders tested proficient on NAEP in 2019, down from 40% in 2013 and at the same level as in 2007. The New England average was 38% in 2019.

The report aligns with the state's 10-year economic strategy, something suggested in last year's report and unveiled by Gov. Janet Mills last December, and the Economic Recovery Committee created by Mills earlier this year.

Breen said the MDF and growth council "will work with policymakers, businesses and community leaders to stabilize, diversify and rebuild a Maine economy that is inclusive and delivers on the council’s vision of a high-quality of life for all Mainers.”