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November 3, 2009

Recession knocks wages down 17%

By The Mainebiz News Staff

The severity of the hit Mainers took in wages and incomes in the first quarter of this year hasn't been seen since the Great Depression, economist Charlie Colgan told lawmakers yesterday.

Colgan told the state's revenue forecasting committee that state officials originally expected the decline in Maine wages to be around 1.7% in the first quarter of 2009, but it was 17% -- comparable to everyone taking a 17% pay cut over a year's time, according to Maine Public Broadcasting Network. Colgan, a University of Maine professor and chair of the state's Consensus Economic Forecasting Commission, predicted jobs wouldn't begin recovering until next summer, according to Capitol News Service, and that it would be many years before employment reaches pre-recession numbers.

Colgan did however offer state budget officials a glimmer of hope as the state crawls out of the recession. "The bad news is that the worst was really bad," he said.

The state's revenue forecasting committee is charged with estimating revenues for the state as lawmakers grapple with finding $30 million in budget cuts that will take effect next summer. Beyond that, the Legislature is seeking more than $200 million in additional cuts in the state's supplemental budget -- an amount that could grow beyond $300 million in light of the commission's findings, MBPN reported.

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