Editor’s note: This is the second of two parts about Maine poverty.
You know the pattern of unemployment and poverty in Maine without looking at a map: The largely rural “rim” counties have rates that make a broad middle class standard of living elusive in good times and impossible in bad.
Franklin and Washington counties had unemployment rates of 10.2 percent in June, according to the Maine Department of Labor. Piscataquis County followed with 9.5 percent, Oxford County with 9.4 percent and Aroostook and Somerset counties with 9.3 percent. The state unemployment rate is 7.6 percent.
Maine has responded for decades with a variety of programs, projects, studies, zones and, at times, desperate pleas. Nothing has worked particularly well, and the fact that broad government-driven strategies often have not yielded desired results points to a need for a new way of thinking about the daunting task of creating jobs in rural Maine. One idea is for local or regional leaders to capitalize on the assets rural areas already possess.
Launched in 2009, Mobilize Maine is an encouraging attempt at this. It aims to realign regional economic development districts to better reflect shared opportunities. It focuses on creating “small wins,” though in reality the projects often have substantial local effects.
Mobilize Maine fits in with the larger sense that niche markets for Maine are essential, as paper mills in Jay and Bucksport have already demonstrated. Rural areas also have great potential as clean energy producers. And the quality of place can be marketed to attract not only tourists but workers in cutting-edge industries such as biotechnology and telecommunications.
For Aroostook County, that means finding a private donor to open an alternative energy training and education center at Northern Maine Community College.
It also means letting local people identify assets and take advantage of them. In Aroostook County, biomass is proving to be a readily available resource upon which entrepreneurs can build a local economy and hopefully an export business.
The creation of a biomass industry in Aroostook County is made possible by private businesses and economic development professionals, and it represents a modernization of the traditional forestry and agriculture work sectors. Jobs exist now for the conversion of oil-fueled commercial properties to biomass, and switching to a Maine-based energy source keeps all of production and delivery costs in Maine.
To date, 16 biomass conversions during the past year in Aroostook County have generated more than $20 million for the local economy, according to the Northern Maine Economic Development Commission.
For Washington County, “small wins” means a new lobster storage plant in Eastport and welcoming Ocean Renewable Power Co.’s first-in-the-nation tidal energy program at Cobscook Bay. The projects are entrepreneurial in nature and focus on generating energy rather than consuming it.
It makes sense to foster business relationships that make it possible for the success of startups, such as composites manufacturers in places like Bath and Brunswick, to radiate out into rural areas. That type of collaboration recognizes that businesses throughout Maine must play a role in promoting job growth in rural Maine.
In this asset-based model that relies on communities and local businesses to chart their own economic development strategies, government also plays an important role. It must provide and maintain infrastructure — which includes information technology, in addition to roads and bridges — and funding in the form of grants and loans for projects that clearly demonstrate broad regional value. It must create the positive business environment.
No government initiative will help boost economic growth in rural areas if local people are not supportive, though. The entrepreneurs and hard-working people in Maine’s rural areas ultimately will power the economic engine and play a large role in determining the fate of the “rim” counties’ middle class.
What about the rest of the poor smucks in the other counties? This is an issue across the state for people looking for employment.
It appears that it takes someone with vision within communities that are willing to try some different things to promote businesses with good paying jobs.
It helps if you don’t have people in communities that are willing to tear apart every opportunity that comes along.
Let’s see. Franklin county. Poor cell phone service, virtually no high speed internet. Two of the most important things a business needs today. Gary Libby’s comment about vision is fine, but without the appropriate infrastructure it just ain’t gonna work.
Very true.
Many of our future entrepreneurs get wiped out and bankrupt early in life by uninsured accidents or sickness. When everybody has access to affordable health care there should be a lot less health bankruptcies. If people didn’t have to struggle so much to rebuild their life and credit, they could instead focus that energy on building a business or a livelihood. Everybody is either burdened with expensive health insurance or big hospital bills ; it drags everybody down. Just imagine starting a business and wanting to provide health care for your employees to ensure their well being. That’s not even a realistic dream. The article is on the right track; we have to start at the bottom with the basics.
Many of our young healthy entrepreneurs are now faced with the decision of funding their new business and taking a tax penalty or paying for insurance they may well not need and not investing in their business.
Obamacare, in fact, contains substantial benefits (some might even say giveaways) for small businesses. That starts with a program already under way to offer special subsidies to firms with fewer than 25 employees that want to offer health benefits. As long as your employees earn less than $50,000 on average (law firms, medical practices, and other elite professional partnership are thus ineligible), you can get a tax credit to defray 35 percent of the cost of the insurance if you’re a for-profit firm, and 25 percent if you’re a nonprofit.
When the law really gets rolling in 2014, those subsidies rise to 50 percent for for-profits and 35 percent for nonprofits.Firms with fewer than 50 employees are also exempt from the “employer responsibility” provision of the law that otherwise constitutes the biggest business burden in the legislation.The Affordable Care Act (in)famously requires that all individuals who don’t receive insurance from their employer or from a government program such as Medicare or Medicaid must buy their own insurance on a regulated exchange. Subsidies will be provided to those for whom such insurance wouldn’t be affordable.
That could be seen as, in effect, penalizing firms that already offer insurance to their workers. To offset this, the law stipulates that companies whose employees receive subsidies to buy exchange plans must pay a financial penalty. That is supposed to deter firms from responding to the law by simply dropping existing insurance coverage.
But the ACA doesn’t make small businesses pay that penalty.Put the special subsidies and the exemption together, and the result is a law that’s pretty clearly a good deal for small businesses.
Jason, I employ about a dozen people. I have already been “tested” by my accountant to see if it makes sense to spend the money to have him fill out the paperwork/Worksheets.
The formula is involved. It is not as cut and dried as you say. It is diluted by part-timers, those on other plans including retirement from other employers, the Veterans Administration, and people whose spouses provide insurance. As it turns out about half of my employees fit into one of those categories.
The fact is those people dilute the plan to levels far below what I could hope to recoup in credits. Better to pay the tax than the $400 or so it would cost me to file the forms.
Believe me my accountant just loves the chance to charge me $150 per hour … but I am not going to let him.
I didn’t know that young healthy entrepeneurs could see the future. I wonder how many of them will get a rude awakening.
Traditionally young people have invested in their business and homes before health insurance. The government has now told them they need to have insurance in order support their elders instead of investing in themselves.
You, like many, think of insurance as a healthcare plan instead of the risk management tool that it really is.
Of course it’s a risk management tool. The more people participating in that pool the cheaper it will be for everyone. Just imagine if everyone in the state of Maine were in one pool or how about New England. The rates would come down dramatically.
It is (or was) an Individual risk management tool. Rates will not come down for the young healthy person. They will rise.
Good idea. So when are we going to do something to make health care affordable. Maybe we could start by getting rid of frivolous law suits that drive up health care cost for everybody.
most of the rural counties are a “lost cause”. Their economies were based on natural resources and/or agriculture. The jobs in those areas are declining, both due to mechanization and changing markets. I know I grew up in a small rural town, and those that could left. Those that couldn’t had kids and collected wellfare, so now you have a town full of retirees and people with no marketable job skills. No large employer is ever going to move into the area.
Your “Dutch Uncle” comments are on target and absolutely correct.
Maine and the nation would be better off in the long run if they let natural free market conditions dictate where people and business locate. Yes, such draconian measure would result in some of our villages and communities turning into ghost towns but that is OK. Others will thrive, and in the end we all will be better off.
I liken the current conditions in many of our rural communities as a patient in an irreversible coma. The state needs to undertake social triage and better to turn off the life support for those communities and use those limited resources on those that might actually live productively.
Harsh, but fair.
Let’s look at this map in a different way.
The poor counties, in orange and brown, are also the most Republican and conservative politically. They want to cut taxes and government spending.
The rich counties, in blue, are the most Democratic and liberal. They want to pay more and support government services, particularly in the poor counties.
If Aroostook and Washington counties don’t want the Cumberland and York money that’s now paying for their roads, schools, police, courts, colleges, ….why not redirect state spending to the southern counties who pay the taxes?
Let the roads go back to dirt. Close the University and Community College Campuses in poor counties. Hold court in Bangor for the northern and eastern parts of the state. Reduce state spending for rural k-12 schools.
After all, that’s what they vote for. I say, give it to them.
I already live on a dirt road.
Dream On, Maine is finished. It would be like trying to turn Bankrupt Greece into Germany never will happen.
To create jobs it would be helpful to have a competitive advantage over other nearby states. What can Maine’s competitive advantage be? Not transportation cost given our location. Energy costs? Not unless we develop low cost renewables that we have, which is happening. Another could be health care costs. What if Maine’s health care cost 25% less than New Hampshire’s or Massachusetts’? Is that incentive enough to attract employers to Maine?
The way to lower health care costs is to employ a single payer system. Maryland did a study recently which concluded that if the State went to single payer health insurance costs would drop 25% and 100,000 new jobs would be created by attracting employers from neighboring states.
Of course, Maine is basically too resistant to change to even consider this (Oh, where are the good old days of the Civil War?). Too bad, because it would be a big winner for all the people of Maine.
You speak of the cost of transportation given our location. This is the common misconception from those that think we are at the end of the road. In fact, Bangor is an equal distance (road distance) to Halifax and to New York City. Ottawa is the same distance to the west. That places us in the middle with 2 million people to our east, 12.8 million to our west and 12 million to our south (without New York City). This isn’t a plug for the East/West Highway but rather a simple math equation using existing roadways. My point is that our asset can be us in the MIDDLE rather than the end of the road.
Bangor is located one full day closer to Europe for shipping goods than any other state in the US. That is an average of $50,000 savings for a shipping company. If there were investment in our rail, we would be a major player in the east/west shipping route. Transportation logistics are very good paying jobs. Saint John NB has beaten us to that distinction because they DID look at their assets and built upon them.
Low cost renewable energy is an oxymoron, so far. The only way renewables are affordable is when the government provides financial incentives, which ironically, isn’t sustainable (renewable). Our best choice for renewable, green, sustainable, energy is hydro generated. We spend hundreds of millions of dollars studying different sources of power. But we can’t invent a way to get fish safely over a dam! The second best way to acquire that affordable energy is to import it from Quebec. Where they get it from, you guessed it, hydro.
I agree that healthcare costs, unemployment and workers comp insurances all need to be addressed in order to make Maine competitive for business investment. Folks much smarter than me can articulate how that might be done.
The Mobilize Maine model can work simply because it doesn’t look towards the state government to provide them anything. Fact of the matter, it works best when the state stays out of the way. Whether you are Washington County or Franklin County, YOU can identify what makes you unique. What makes you stand out in the crowd? What can you do in Machias or Farmington that just can’t be done elsewhere? Next, determine what is standing in your way. And let’s not put Quality of Life at the top of the list of assets. Believe it or not, folks in New Jersey think they have a high quality of life.
Here in Hancock County, many of our ancestors emigrated here from Ireland where they were farmers. They found the coastal landscapes were not conducive to good farming. So they adapted to making a living from the sea.
We are at a time in our lives that we might need to adapt to something else but we are looking to someone else to tell us what that should be. My high school teacher once said, “If you always do what you have always done, you will always get what you have always gotten.”
Washington County could boost their employment by building a new nursing home attached to Calais Hospital.
easier said than done- you must have the beds (licensed by the state)
right now there are no beds available-the state will have to act to change that
before Calais can do anything