What is Maine’s Unemployment Rate?


Officially it is 8.1 percent for March 2009 according to the Maine Department of Labor. However, since January 2009, Maine’s labor force has been shrinking. This means that people are “no longer looking for employment” thus no longer part of the workforce. Yet, this is a definitional fine line. If they were looking for work, they would be immediately counted as “unemployed.”

As such, declines in the labor force could be called “shadow unemployment.” Yet, the economic effects are the same whether one is officially “unemployed” or part of “shadow unemployment.” Maine’s economy still suffers under lower incomes, lower consumption, lower tax revenue–well, you get the ugly picture.

Since January, 2009, Maine has lost 5,486 people from its labor force. If we add these folks back to the labor force AND unemployed column, the unemployment rate jumps a whopping 9 percent in March 2009 to 8.8 percent from 8.1 percent as shown in the accompanying chart (click “continue reading” to view the chart). This is why it appears that the increase in Maine’s unemployment rate has slowed since January because the base, ie, labor force, has been getting smaller.

Another way to look at this is that it appears Maine has lost only 1,853 jobs since January. But, if you add the 5,486 folks who dropped out of the labor force then Maine has lost 7,339 jobs. Based on all the news reports of business closures, which number do you think better fits reality?

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