Maine GSP Growth Troubling
By Jason A. Fortin
The Bureau of Economic Analysis (BEA) recently released an analysis of Gross State Product (GSP) for 2005. The study reveals that nationally, from 2004-2005, Gross State Product grew at an average rate of 4.2 percent. During that same time period, Maine was among the states with the lowest GSP growth rates, ranking 42nd with 1.4 percent growth.
MHPC analysis of the GSP growth from calendar years 1998 to 2005 reveals that nationally, GSP grew at an average rate of 3.1 percent. Maine, during that same time period, had GSP growth that ranked 37th with 2.2 percent growth. A full dataset and charts of this analysis are available at www.mainepolicy.org. (Note: data series ends at 1998 because of a change in BEA methodology)
Why should Mainers care about GSP?
Wage growth and job creation are directly linked to GSP. As Maine’s GSP growth lags behind the national average, that deficiency compounds, creating a greater disparity between Maine incomes and the national average income. In order for Mainers to experience the same wage opportunities enjoyed by the rest of the nation, Maine policymakers must change the current trend.
While no government holds the keys to the economy, government policies do inhibit the rate of growth. The enactment of pro-growth economic policies will boost economic activity. Reducing the state tax burden, reforming the tax code, and lowering health insurance costs will go a long ways towards increasing Maine’s GSP growth.
BEA 2005 GSP report.
BEA Data Reveals Maine Experiencing Anemic Growth.
Percent Change in Real Gross State Product – Graph.
Percent Change in Real Gross State Product – Chart.
Gross State Product 50 State Comparison.
Send your comments to: jfortin@mainepolicy.org.