Maine ranks second in job loss in the nation as officials attempt to reverse a longtime trend.
AUGUSTA – Maine lost the second highest percentage of manufacturing jobs – a total of 17,300 – in the country over the three-year period ending in July.
Despite growth in other job categories, state officials are concerned.
“It’s not just Maine that has been hurt,” said Economic Development Commissioner Jack Cashman. “This is a national problem. We have been losing manufacturing jobs for a number of reasons for over a decade.”
The study, released earlier this month by the National Association of Manufacturers, backs up Cashman’s assertion. Nationally, the loss of manufacturing jobs was 15.2 percent over the three years, a drop of 2.6 million jobs.
“I think in Maine we were somewhat buffered over the years, and it has just come home for us in the last three years,” Cashman said.
Galen Rose, an economist with the State Planning Office, said the loss of manufacturing jobs hurts more than the loss of jobs in other categories because they are better paying and usually are accompanied with good benefit packages.
He said manufacturing also has a broader impact on the economy than many other sectors because of the “spinoff” effect of subcontractors and the purchase of materials used in the manufacturing process.
Rose said that while Maine has been losing manufacturing jobs, other sectors of the state’s economy, such as the retail, health care and service sectors, have been creating new jobs.
Statistics obtained from the Department of Labor indicate that while manufacturing jobs were down, other job categories, including services and the retail sector, generated 15,700 jobs over the three-year period.
“But, for the most part, those are jobs that pay less well and have fewer, if any, benefits,” he said.
Overall, the number of durable goods jobs in Maine declined by 6,900 or 16.9 percent. The number of nondurable goods manufacturing jobs declined 10,400, or 26.7 percent over the 3-year period.
“There are several trends at work here,” said University of Maine Economics Professor James Breece, executive director of the Office of Policy Planning and Analysis for the University of Maine System. “These are national trends and they all apply to Maine to some degree.”
He said some jobs counted as manufacturing jobs have been outsourced, so they show up as a loss in manufacturing jobs but as an increase in another job category like the services sector. Another major factor is the slow economy that has led to layoffs by many manufacturers because orders for products are down.
And Breece said in a number of manufacturing sectors there is a drive for increased productivity through improved technology.
State officials are not waiting for Congress to address the broader policy issues that might encourage growth in manufacturing. Cashman is chairing an advisory group Gov. John Baldacci created this summer to make policy recommendations on how to encourage the creation of “good” jobs.
“Research and development and high tech industries, that’s the wave of the future,” he said.
Cashman said the state needs to invest more in education at all levels and target job creation incentives to those manufacturing areas that can make a difference in transforming Maine’s economy.
“There is no question it is changing,” he said. “We want it to develop in areas where we have the advantage, like marine technologies and aquaculture and forestry.”
Cashman acknowledges it is doubtful the state can gain back all those jobs as quickly as they were lost. But, he said if it does not happen, it will not be for lack of trying.
“I don’t allow anybody to come in here and use the word can’t,” he said. “We don’t use that word. We think positive.”
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