"Open for business" door swings both ways

While the Appropriations Committee was struggling mightily to do the near-impossible – avoid devastating cuts to the state’s Medicaid program proposed by Gov. Paul LePage – a report on jobs came out that was equally devastating.

Based on U.S. Census reports, the Maine Center for Economic Policy says that Maine was one of only six states to lose, rather than gain, jobs in 2011, and that of those six job-losing states, Maine’s performance was the worst.

That’s right. We’re 50th – last -- again. And this time, these are real numbers, unlike the Forbes magazine report Republican candidates used in the 2010 election to hammer their rivals, which tries to project an array of economic variables onto the future. The Maine Department of Labor has questioned the baseline number used by the Census, but has not offered an estimate of its own about job losses.

Maine’s unemployment rate has been below the national average throughout the recession, and still is, though the margin is slipping. But more important than the rate is how many people are finding work, and the numbers are discouraging.

Overall, Maine lost 1.2 percent of its jobs in 2011, a year in which recovery began in 44 other states. The net loss of 7,200 was led by the state and local government sector, which was down by 4,200, or 4.8 percent. Most of those jobs belonged to teachers. After three straight years of declining state funding, layoffs are occurring across the state.

The construction sector, which should have staged a comeback, did not. It lost another 1,600 jobs, or 6.1 percent. Not coincidentally, LePage refused to allow voter consideration of the biennial transportation bond issue that has sustained construction spending since the 1950s.

And so it goes. Declines greater than 1 percent were registered in professional and business services; manufacturing; trade, transportation and utilities; and leisure and hospitality. The only significant growth came in health care, up 2,600 jobs, or 2.2 percent, and that must be considered a mixed blessing.

Maine has long suffered from an overly decentralized health care delivery system that often duplicates services, leading to some of the highest health insurance rates in the country. And besides, if LePage gets his way and even a fraction of the Medicaid cuts go through, he’ll have taken care of that growth sector, too.

It wasn’t supposed to be this way. LePage entered office declaring the state “open for business.” He was going to roll back taxes and regulations, improve the business climate and use his bully pulpit to lure new industries and jobs to the state.

It hasn’t worked out. Perhaps the governor’s zeal to remove health care from Maine citizens, his frequent rudeness to advocacy groups, legislators and anyone who questions the wisdom of his proposals, doesn’t actually improve Maine’s attractiveness to business.

One interesting contrast was shown in State of the State addresses delivered last month in Maine and New Hampshire.

New Hampshire’s was delivered by Gov. John Lynch, a moderate Democrat who’s been elected to a record four terms and is now retiring. New Hampshire is an overwhelmingly Republican state – its legislature now has veto-proof GOP majorities in both House and Senate – yet Lynch’s address was civil and moderately upbeat. He criticized legislators for cutting the cigarette tax, over his veto, a move that did not generate the predicted increase in sales. But he also challenged lawmakers to double the business development tax credit he helped install, a measure that should be to their liking.

LePage’s address, while well-written and delivered with greater panache than his off-the-cuff remarks, was almost relentlessly downbeat. LePage seems to find threats around every corner. In his estimation, state government is a huge problem that can be solved only by relentlessly cutting it scope and the services it offers.

Whatever you think of his prescriptions, the tone is all wrong. Out-of-state business leaders expect a governor to sing the praises of his state, not complain about high costs and bureaucracy. Perhaps LePage does do this in private, but his public utterances are hardly calculated to make a business owner say, “Maine has lots going for it. Let’s take a look.”

Perhaps the most daunting feature of the Maine Center report is a chart showing how many months after the start of a recession it took for job growth to turn positive. In the 1981, 1990 and 2001 recessions, job growth began within three years. Four years after the 2007 recession, we’re still shedding jobs.

Eventually, things will turn around. But this economic slump is longer and harder than it needed to be. A reconsideration of what businesses and their employees really need to prosper is overdue.

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Betty Davies's picture

Gov. LePage is trying to rid the state of healthcare jobs

Mr. LePage, who ran for office on a pledge to bring jobs to Maine, seems determined to make sure that even more Mainers get laid off. His plans to slash MaineCare will result in unemployment for hundreds (perhaps thousands) of healthcare workers in Maine.

These people will no longer be paying for goods and services in their communities. Local businesses statewide will wind up laying off workers--including many Tea Party enthusiasts who voted for LePage.

Will they finally see through him?

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