PORTLAND — Did you feel something Wednesday? Like the condition of Maine’s economy worsening?
Well, the business news website and aggregator Business Insider did, dropping Maine in its rank of state economies to 49th. While Maine’s dawdling around in the lower rungs of the website’s ranking may present general cause for concern, the drop in the rankings is of questionable significance because the measures used to determine that ranking also changed.
The latest ranking looked largely at data for the third and fourth quarters of 2014, including the change in jobs, unemployment rate, economic output per capita, wages and a 2013 measure of state government surpluses or deficits.
When Maine ranked two spots higher, at 47th, in a 2014 tally, the website also factored in Maine’s working-age population, change in international exports and auto sales. It didn’t look at government finances.
Those changes didn’t affect all states dramatically, but did cause Alaska to drop from fourth in the mid-2014 list to about 30th in the 2015 list released Wednesday.
By state, the latest Business Insider assessment largely echoes the placement of state economy rankings by Forbes magazine, where a dead-last ranking was a persistent thorn in Maine’s side until the Pine Tree State edged out Mississippi last year.
Politicians have regularly made hay over the state’s rankings, particularly leading into the 2014 elections, with Gov. Paul LePage saying the bad ranking signaled that the state needed to turn the volume up on his “open for business” chorus. Democrats argued that the persistently low rankings demonstrated LePage’s failure to right the ship.
Drawing direct ties between public policy and economic outcomes is particularly challenging, as demonstrated by the state’s January 2014 assessment of economic development incentive programs.
That aside, economic development experts in the state told the Bangor Daily News in November that there are reasons to cast doubt on such state rankings, partly because state boundaries don’t necessarily align with regional economies.
As the Business Insider rankings mention, the U.S. economy has improved by measures of output and employment, but “that economy is the sum of 50 state economies, each with its own quirks and unique interactions with the others.”
Peter Del Greco, head of the business consulting firm Maine & Co., said in November that he looks for studies that focus on specific labor markets or population centers rather than states as a whole. But business rankings like those in Forbes, he said, do come up sometimes when trying to attract businesses to the state.
“I would hesitate to say [the ranking] is the determining factor, but it comes up and we have to manage it,” Del Greco said. “And I think it’s manageable.”
Greg LeRoy, executive director of the Washington-based economic development think tank Good Jobs First, said in November that such rankings don’t provide much guidance, if any, for state policymakers, who he said “should make fish wrapping” out of state business climate studies.
“We don’t think they have any policymaking value and are politicized grab bags of data,” LeRoy said.
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