Though Maine’s unemployment rate ticked up slightly to 2.8% in October, the rate remained below 4% for the 23rd consecutive month.
If these numbers hold through the end of the year, which seems almost certain, 2023 could mark Maine’s lowest annual unemployment rate in recorded history.
Although that news seems good, many economic challenges remain, including a statewide housing crisis, increased homelessness, inflation, higher costs of living and an ongoing workforce shortage – all of which seem to conflict with the record-low unemployment.
“The unemployment rate is just one metric of the overall health of the economy and wages,” said Rachel Bouvier, head of the economics department at the University of Southern Maine.
October 2023 continued an upward trend in Maine’s unemployment rate after four months at a record low. From April to July of this year, Maine hit a historic 2.4% unemployment rate. Even so, the timing of this upward tick is not unexpected. Maine’s unemployment rate typically increases after summer comes to an end.
The Maine Department of Labor, in a statement about the latest data, attributed the recent uptick to a “somewhat larger increase” in the state’s labor force.
Individual unemployment rates in most counties landed below Maine’s non-seasonally adjusted rate of 2.6%. Piscataquis County had the highest unemployment rate at 3.7%, while Sagadahoc County was below average at 2.2%. Beyond state borders, Maine has the 10th lowest unemployment rate across the country, which has a national average of 3.9% unemployment. In New England, Maine shares the same rate as the regional average, 2.8%, but ties with Massachusetts for the second highest unemployment rate, behind 3.5% in Connecticut.
Even with the slight increase, Maine’s rate is trending lower than ever before – to the point that 2023 could make history for having the lowest unemployment rate since the state started tracking this data in 1976.
The previous record low of 2.9% came in 2019 – ahead of the start of the COVID-19 pandemic, which caused unemployment rates to spike as the size of Maine’s civilian labor force decreased dramatically. The average unemployment rate for the first 10 months of the year stands at 2.6%, lower than the 2.9% average from January to October in 2019.
Unless there is a dramatic spike beyond a 4% rate through December, Maine will likely break that 2019 record.
The Maine Department of Labor said that more than half of the industry-wide employment gains happened in the retail sector, which added more than 600 jobs from September to October.
“Retailers are a lot better off now than they were a year, 18 months ago, in terms of workforce,” said Curtis Picard, president of the Retail Association of Maine.
Picard said that as the market has shifted and roles have been harder to fill, retail employers are shifting their models to attract more candidates.
Employers are increasing wages, cutting down days of operation and scheduling shifts with more flexibility to offer a better work-life balance. And those adjustments are paying off, Picard believes. He said that workforce development also has contributed to those gains, in part through the association’s nonprofit arm, the Maine Business Education Partnership.
But some believe that unemployment rates don’t tell the whole story of Maine’s economic status.
WORRISOME TREND
The record low unemployment is happening at the same time that Maine is hitting another record: some of the lowest labor participation rates in its recorded history.
The state’s workforce participation rate, which is the labor force – the number of people who are employed or actively seeking work – divided by the number of state residents 16 and over who are not institutionalized, is just 58.8%.
The beginning of the pandemic in 2020 saw not only a drop-off in Maine’s employed population, but also the labor force at large. The labor force dropped from an average 697,800 people in 2019 to 670,600 in 2020. It’s slowly climbed back up, while the unemployment rate dropped to a record low. The labor force participation rate has not.
The participation rate peaked at 68.8% in January 2000 and has decreased since. It fell to a record low of 57.9% in August 2020 from 61.5% in March 2020. It’s since fluctuated, but has never fully recovered.
“During the pandemic, a lot of people who were nearing retirement age just took the opportunity to retire,” Bouvier said. “That’s not going to be reflected in the unemployment rate.”
And while some workplaces are offering higher wages, the state’s $13.80 minimum wage is still well below the living wage, which is $16.53 an hour for one adult without a child and $34.84 an hour for one adult with one child.
Bouvier said that has especially been challenging for women with children amid childcare shortages.
“We’re starting to see more women reenter the workforce, but not returning to the workforce as quickly as we had hoped,” she said.
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