Jobs outlook report predicts Maine labor shortage will continue

Maine’s labor shortage is likely to continue, but it won’t have a drastic long-term impact on the state’s economy.

That’s the conclusion from the Maine Department of Labor’s newest report that examines the job outlook for the state through 2032. 

“Job growth has gradually slowed over many decades, primarily from sliding birth rates which yield smaller numbers of labor force entrants,” the report’s authors wrote. “Combined with thousands of retiring baby boomers, the number of jobs is not expected to change appreciably in the decade through 2032, even as the population continues to increase in size.”

The outlook is based in part on comparing the number of nonfarm jobs to the overall population of the state. Over four decades starting in the 1960s, the report found, the number of jobs increased substantially compared to the growth in population. 

But the report’s authors called that an “aberration,” driven in part by the number of women entering the workforce and even more so by the Baby Boomer generation joining the labor pool.

“That period is now partially playing out in reverse as baby boomers retire,” the authors wrote. 

More people are expected to retire in the coming years. The number of people aged 75 or older, the report found, is expected to go up sharply in Maine, from 9.1% of the population in 2022 to 15% a decade later. 

Patrick Woodcock, President and CEO of the Maine State Chamber of Commerce, said the state’s aging population is and will continue to be a major factor in the state’s labor force. 

“We’ve seen it in Europe, we’ve seen it in some Asian countries, and Maine unfortunately, really is a leading state in confronting what is an aging population,” he said.

Since 2000, according to the report, the ratio of jobs to population, expressed as a percentage, has slowly but steadily dropped. The report predicted the rate will not change quickly, but the rate is expected to drop further, from 44% today to 42% by the 2030s.  

While the report’s authors acknowledge that a continued shortage of labor is worrying, they also note that productivity is still high in the state. Since 2000, despite the drop in jobs statewide, Maine’s GDP steadily rose. Also, according to the data, output per job increased by a total of 39% since 2000, suggesting workers are doing more.

“A more complete view recognizes that productivity gains are likely to exceed the differential in population and job growth,” the report’s authors wrote. “This should be enough both to meet demand from a larger population and to keep wages rising, boosting living standards.” 

Woodcock said growth in productivity is always encouraging, but said Mainers should still worry about an aging workforce. Public officials, he said, should encourage younger members of the workforce to move in, primarily by improving housing opportunities.

“I think housing is the biggest issue for the United States,” he said. “It’s the biggest issue for states like Maine that have had undersupply for decades, and really I think the ability for Maine to build housing affordably is going to be the lynchpin of whether we can address this demographic trend or if we can overcome it.”  

Overall, the report found, it is likely that there will be more jobs available over time in “personal and healthcare operations,” in response to Maine’s aging population. Growth is also expected in “Management; business and financial operations; computer and mathematical and legal occupations.”

Advances in office software could lead to a decrease in the number of jobs for administrative support, the report also found.