(The Center Square) — Chronic workforce shortages and a lack of affordable housing are throttling down Maine’s economic growth, according to a new report that calls for increased funding and policy changes to improve the state’s competitiveness.
The 2024 Measures of Growth report, released on Wednesday by the Maine Economic Growth Council and Maine Development Foundation, ranked the Pine Tree state’s economic health based on factors ranging from how quickly its citizens can connect to the internet to the quality of public school education and whether they have clean water and air.
Maine received “gold stars” in categories assessing its high-speed internet connectivity, sustainable forestry practices, transportation sector and efforts to reduce excessive greenhouse gas emissions.
However, the report’s authors raised a red flag for Maine’s housing situation, citing a lack of affordable homes and rental properties. The estimated percentage of households that can’t afford the median-priced home rose from 56% in 2020 to 79% in 2023. This means the cost of the home’s mortgage, taxes and insurance would exceed 30% of the household’s income.
“Housing is a significant portion of household budgets, and housing costs reflect everything from the supply of housing stock, to public policies regarding planning and new construction, to lending practices and interest rates,” they wrote. “Regions with affordable housing are better able to attract and retain workers.”
Maine was also red-flagged for its labor shortages, which haven’t recovered from the height of the COVID-19 pandemic when the state’s labor force shrunk by about 26,000, the report’s authors noted. In 2023, there were approximately 687,000 in Maine’s labor force. That is an increase of 1% since 2022, but still about 6,000 below pre-pandemic levels.
“A skilled labor force is essential for a healthy economy. As baby boomers retire, the ranks of working-age Mainers are shrinking,” the report’s authors wrote. “To counter these trends, Maine must attract more working-age people from other states and countries, retain more of the young people born here, and help more Mainers participate in the workforce.”
The report also gave Maine a red flag for energy costs, with the industrial retail price of electricity in Maine rising 13% in 2023, from 11.03 to 12.43 cents per kilowatt hour. That’s compared to a national decrease of 3%, the report noted.
“Electricity is a significant cost for many businesses, especially those in energy-intensive industries such as manufacturing,” the report’s authors wrote. “New renewable energy sources could help reduce costs and lower emissions, but they require increased investment in Maine’s strained transmission system.”
