You could feel a surge of consumer confidence this week when the U.S. Census set loose its latest income numbers and showed that Maine, with a 5.5 percent increase, had the largest rise in the country. That giddy result caused Gov. Baldacci’s office to announce that “his economic plan is working for Maine people” and inspired Republicans to change the subject to health care to try to lull residents into slumber.
You are feeling a surge, right? No? Well, maybe it hasn’t hit you yet.
Or maybe you’re just too darn sensible. Perhaps you know the worth of that single income number falls into the wooden nickel range. And the number might not even be 5.5 percent – all economists in Maine can agree on is that income here is up a bit. But the figure does nicely highlight the reason you don’t need to listen to endless political commercials explaining why only Candidate Glitter Teeth can stay/reverse the course of Maine and continue/restore prosperity.
The lone value of noting that income increase is to compare it with all the other income changes that have come before it and then compare those with how the rest of the country is doing. It’s a measure for providing a general sense of Maine’s place in line, and, fortunately, it is a measure the State Planning Office has at hand, going back to 1969.
Twenty-seven years ago per-capita income in Maine was $3,131, or 81.6 percent of the national figure. Maine hung around in the low 80 percent range until about 1984, when its income started rising. It hit 90 percent in 1988, and though it dipped a bit in the early ’90s, has stayed more or less there since. In 2005, according to the Bureau of Economic Analysis, Maine’s per-capita income of $31,252 was 90.4 percent of the nation’s figure.
This is worth noting because it was during this time that Maine lost much of its most-recent manufacturing base. And government spending compared with income rose to the top of the heap. And environmental regulation piled up as high as its tax burden. The asphyxiation of Maine’s economy was announced any number of times over that quarter century. But Maine has more jobs than ever and it is, accounting for inflation, not only wealthier compared with its earlier times, it is wealthier compared with the rest of the nation than in the supposed good old days when mill jobs were plentiful.
(A quick aside on the level of government spending since it is on your mind. State Economist Catherine Reilly makes this analogy: Almost anyone would advise a high-school student who had no other way to pay for college to take out the necessary $20,000 loan because the subsequent payback is many times that amount. But almost no one would advise that teen-ager to try to get a $20,000 loan to buy a car. It’s not the amount of money primarily; it’s what is done with it that matters.)
You’ve probably noticed income in Maine isn’t uniform. The federal government, which apparently delights in stirring up envy, also provided income survey data this week based on congressional districts, concluding the First (southern) District had a median household (not per capita) income of $48,351, while the Second (northern) District came in at $38,620. If the First District were a state, it would rank 18th in household income. The Second District would rank 44th.
A couple of years ago, former State Planning Director Charlie Colgan announced Maine had adopted an urban economy, which for the least-populated state east of the Mississippi seemed unlikely until he explained it. Between 1970 and 2000, he writes, “the most important change is a dramatic shift away from natural resource extraction and manufacturing, and toward the non-manufacturing sectors. … The largest gains were in services, which accounted for 40 percent of all net jobs created. Next were wholesale and retail trade/government. … The result of these shifts was that by 2000 the Maine economy was largely indistinguishable for the U.S. economy in its structure.” (The italics are Professor Colgan’s – he didn’t want you to miss anything.)
One more slice. While Maine’s economy has come to look more like the nation’s, its wage gap – the spread between the best-paying jobs and the worst – has grown. A chart from the Maine Center for Economic Policy shows 25 years of the bottom earners barely holding their own while the top earners are the ones driving Maine toward the national averages.
Catherine Reilly warned me not to draw conclusions based on a single number such as the change in income, so I won’t. (I know the governor’s office wouldn’t either.) But if someone else were to take the state’s gentle incline toward the national per-capita income, the shift in the types of jobs, the rising gap in wages, etc., and that someone were to advise our teen-ager on the $20,000 loan … well, perhaps newly enriched teen-ager would have her own personal economic development strategy, one that Maine also would find handy.
That or a new Grand Am.
Todd Benoit is editorial page editor of the Bangor Daily News.
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