Curbing the Global Express for Maine

Maine’s business leaders routinely remind us that we have become part of a global economy and must yield to its dictates. Yet economic and environmental trends in the last two decades suggest that global markets are mixed blessings. We best consider carefully our terms of engagement with the world economy.

Maine’s key industries, which are primarily resource based, are running out of natural capital. They face increasing competition from nations eager to exploit their own natural and human environment. Unfortunately, declining rural communities are also unlikely sites for future service sector expansion. Their experience encourages and sustains a culture that sees no prospects in and often actively discourages post secondary education. Families working long hours for low pay often cannot help their children nurture or realize the dream of educational excellence. In short, there is little reason to believe that global markets will automatically ease economic disparities between the “two Maines.”

One might, of course, seek to encourage a massive emigration from poorer Maine communities, much as Ronald Reagan once advised unemployed Michigan auto workers to migrate to Texas. A mass exodus from rural Maine would, however, be a tragic waste of the social capital invested in houses and schools. It would shatter the shared commitments and traditions on which cooperative social life is based. Any community can be too socially exclusive, culturally limited, or intrusive in its mores, but forced dispersal will only make social life more harsh and repressive.

Education must be a central key to rebuilding healthier communities in rural Maine. Bowdoin College professor David Vail (who will be speaking at College of the Atlantic at 7:30 p.m. this evening) has recently co-authored a provocative monograph on rural development for the Maine Center For Economic Policy. He stresses access to pre-school programs, higher standards for high school students and their teachers, an end to deleterious patterns of tracking, an increase in internship and career guidance programs, an expansion of the technical college system, and new education and job training initiatives for adults.

The most distinctive aspect of this work lies in the recognition that changes on the supply side, education, must be complemented by reforms on the demand side, employers. Good jobs, that is work that pays well and challenges the mind, won’t come simply because the worker is educated.

Management can pursue one of two profit maximizing strategies. It can treat workers as disposable cogs, pay them little, give them minimal training, and build a workplace around a number of minutely supervised and essentially rote tasks. Or it can train and compensate its workers well, give them an independent voice in production and design, and offer them a share of the profits of the enterprise.

Vail draws on an impressive body of research to critique traditional Maine management styles. Especially in an era that requires flexible specialization, quality, and individual product design, “my-way-or-the-highway” workplaces are a route to economic deterioration. A few Maine businesses, such as Champion’s Bucksport mill, already recognize the need to reform management style.

Conservatives of course prefer to let the market determine the style of management firms adopt. Yet banks and mutual funds today are notoriously impatient with investments, and worker training and workplace reorganization take time for the returns to begin showing up. Workers also are seldom on an even playing field with management, especially in an economy with as little union presence and as high levels of unemployment as most of rural Maine.

Vail knows that one cannot legislate cooperative, democratic workplaces. Nonetheless, state governments can strive to identify and recognize them, as through awards analogous to the Margaret Chase Smith Quality Award. The curricula of Maine’s technical schools can be adjusted to provide both workers and management greater information about “high road” workplace strategies.

He also argues that future state subsidies, such as Finance Authority of Maine loans or tax credits for job creation, be tied to commitments to quality jobs. The logic seems impeccable. Conservative can’t logically object to “intervention in the free market,” as tax credits and subsidized loans are already forms of intervention supported by business interests. In the long run, Maine’s economy will be better served by targeting its limited resources to the creation of quality workplaces, where future productivity gains will generate wage and tax growth.

A modest boost in the state’s minimum wage would be a useful supplement to this strategy. It would increase purchasing power for workers at the bottom and encourage local business activity. A higher minimum wage seems unlikely to encourage business flight, especially in the context of broader worker training. (Rural tourism by definition can’t pick up stakes and move.) Higher wage standards would also help to discourage low road competition.

There is no getting around our increasing reliance on the global economy. Nonetheless, even in an era of bankrupt national policy, Maine governments and communities are not without some leverage. Greater participation in the workplace can improve wages and make such workplaces more family friendly. This can in turn improve children’s expectations, with economic and environmental benefits to future generations. Encouraging Maine’s leaders to advance this agenda is one of our most urgent challenges.

John Buell is a political economist who lives in Southwest Harbor.