Maine’s Lost Decade

Maine’s Lost Decade

May 17, 2010 Posted by J. Scott Moody - No Comments

In previous blogs, I have shown how private sector employment over the last decade has plummeted while state and local government employment has only slightly declined.  Some dismiss this as playing with the data.

So, let’s look at all the data we have at our disposal from our friends at the Maine Department of Labor.  Interestingly, the state and local data has been recently extended all the way back to 1990 where previously I was only able to find it to 1997–or perhaps I was looking in the wrong place.  In either case, the data extends over two decades.

What do we find?  As shown in the chart, the 1990s saw both the private and S&L government employment grow; with the private sector having first rebounded from the 1991 recession and then catching back up to the growth in S&L government employment.  By 2000, both were pretty much at the same level.

However, this run-up in the private sector in the 1990s only serves to make what has happened to the private sector in the 2000s all the more disturbing.  Right up until the recent recession, private sector employment was flat-lined–for an entire decade!  Then the recession hit and employment cratered.  While S&L government employment also plateaued in the 2000s, it was at a much higher level and there has been no cratering in employment due to this recession.

Here’s another question that begs for an answer.  Clearly the rapid run-up in private sector employment in the 1990s was fueled by the bubble that gripped the nation during that time–Maine was no exception.  Yet, Maine did not enjoy the same robust private sector employment growth due to the recent housing bubble.  Why?  One plausible answer . . . Maine’s “Demographic Winter” was beginning to set in.  Anyone else have any ideas?