THE CURRENCY IS PEOPLE

Maine’s population grew by 2,297 people between July 2006 and July 2007. That number of people wouldn’t even fill the Bangor Auditorium for a basketball game. And population growth that anemic does not bode well for the future of Maine’s economy.

Maine’s population growth rate, at 0.2 percent, leads only Rhode Island, Michigan, Ohio, Vermont and New York. Michigan and Rhode Island actually lost population in the last year. Maine’s population in the latest census estimate was 1,317,207, as of July 1, 2007, up from 1,314,910 from the previous July 1. That puts it nearly on par with the population of Providence, R.I.

Why should anyone worry about population growth, or the lack thereof? After all, no one would wish Maine to have to endure the problems seen in crowded cities and suburbs of the mid-Atlantic, Florida and the Southwest. And the population growth Maine has seen, particularly in southern and coastal regions, has come from retirees, many with flush bank accounts, and demanding little in the way of services from municipalities and schools.

So what’s the downside of being a quiet, rural backwater? Well … being a quiet, rural and poor backwater. Maine’s median age is about 40, meaning that more than 500,000 are 40 and older. The national average is about 37 years old. People in their 40s, 50s and 60s are not as likely to start businesses, invest in equipment with which to work, embark on new careers, or train in new technologies as are those in their 20s and 30s. And though wealthy retirees from out of state have money to spend upgrading houses, caring for boats and dining out, the purchase of essential goods and services sustains the backbone of the economy.

Kate Reilly, Maine’s state economist, acknowledges the connection between population and economic development. Businesses, locating from outside the state or forming within Maine, are attracted to a growing customer base and a large labor pool, she says. But there may be less bad news than it seems, Ms. Reilly argues. The population growth numbers are given for the state; subsequent analysis may show strong population growth in areas such as southern Maine and coastal Hancock, Waldo, Knox and Lincoln counties.

The aging of Maine’s population may also have a silver lining, Ms. Reilly says. Baby boomers have the largest disposable income block in U.S. history, and businesses seeking to serve that demographic could find success in Maine. Still, she says, a more sustainable scenario would include a mix of ages and backgrounds.

The Census Bureau estimate is reached by measuring births, deaths and migration into and out of each state. When the next full census is completed in two years, it will be interesting to compare the trend lines of population growth related to births versus in-migration with those from the 2000 census. A far more sustainable ratio would have more growth from births, but Maine should not rule out courting the next generation of in-migrants.