Much has been made lately of Maine’s skills gap — the chasm between what skills and knowledge workers have and what employers need. Gov. Paul LePage has made closing this gap a high priority.
This work is complicated by the fact that the gap — and its causes and consequences — varies widely across the state.
Consider the tale of two counties. Cumberland County, with an unemployment rate that is significantly lower than the national average and a per-capita income that is much higher than the state average, has for years stood alone in Maine as a marker of prosperity, according to former Maine State Economist Laurie LaChance.
It is close to the urban areas of both Boston and Portsmouth, N.H. It has a diverse economy, a major airport, a seaport, passenger rail and a highway.
Large multinational corporations in fields including technology, medicine and retail have located their headquarters in the county, along with thousands of good, competitive jobs. A recent study by the Portland Regional Chamber of Commerce found that more than 40 percent of jobs in the state were located in the Portland region alone.
Cumberland County also has the state’s highest education rates, with nearly 40 percent of its residents over age 25 having obtained at least a bachelor’s degree, according to U.S. Census figures.
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“When you have a population where the income is a little higher and the educational attainment is higher, it provides opportunities,” LaChance, who is now the president of Thomas College in Waterville, said this week. “Success does breed success, I think.”
But the story is very different in other parts of the state, including Piscataquis County, where LaChance was raised.
The large and sparsely populated northern county is home to moose, much of Baxter State Park, abundant natural beauty and one of the oldest populations in the state. It also has an unemployment rate that is now hovering around 10 percent and a median household income of $34,016, which is well below the statewide median of $46,933.
It also has Maine’s lowest education rates, with just 15 percent of the county’s over-25 population having obtained a bachelor’s degree.
“To support business activity, you have to have a certain amount of labor force,” LaChance said. “All those factors make it difficult for businesses to grow in the area. They just can’t find the workforce they need.”
Something else that stands out to her about Piscataquis County is that it is one of the only areas in Maine that is not home to a branch of the University of Maine, a private college or a dedicated community college — although the Maine Community College System has an off-campus center in Dover-Foxcroft.
Piscataquis is one of the state’s so-called rim counties, along with Oxford, Somerset, Franklin, Aroostook and Washington counties. These places tend to be older and to have strong traditions in mature economic areas such as fishing, farming, forestry and manufacturing. They are also places that have languished, with lower income levels, fewer jobs and lower educational attainment.
“As the global marketplace has evolved, it’s just been exceedingly tough,” LaChance said. “Education is the one great equalizer. … With every single increment of education, you see the unemployment rate going down. Education is what sets you on your path. If you can find a way to bring up the educational attainment in a region, that’s going to help to attract certain businesses and start certain businesses.”
‘The Thinking City’
Todd Gabe, an economics professor at the University of Maine, recently tackled a research project in which he grouped cities in the United States and Canada based on the types of skills found in the workforce.
The report, “Knowledge in Cities,” included Portland as one of the metropolitan areas that Gabe and his colleagues examined.
Among the metropolitan areas, they found “innovating regions,” where people know a lot about information technology and commerce. There are “making regions,” where people have a high knowledge of manufacturing, but low knowledge of commerce and the humanities.
Then there is Portland, which Gabe characterizes as a “thinking region.” Philadelphia is another example of a thinking region, he said.
“A thinking region tended to have high knowledge about arts, humanities, IT and commerce,” he said. “It was lacking knowledge about things like production and processing. To me, it sort of fits the idea of Portland to a T.”
He said that the fact that Greater Portland has such a high percentage of people who have a college degree has led to higher productivity and higher earnings.
“You put nine economists in a room and you get 10 different opinions,” he said. “But the receipt of a college degree enhances earnings. There’s universal agreement on the impact of college attainment.”
A county such as Piscataquis, with its much lower educational attainment levels, is going to have a much harder time growing a diverse economy. Those 15 percent of college-educated people include the teachers, the doctors, the attorneys, the accountants, the insurance agents and the other professionals who provide services for everyday life.
“That does not leave a lot of room for computer programmers,” Gabe said. “Or a lot more people beyond just the providers.”
Population density, like geography, has a lot to do with whether a region will thrive, Gabe said.
Cumberland County had 337.2 people per square mile in 2010, compared with Piscataquis County, which had only 4.4 people per square mile the same year, according to U.S. Census data.
When it comes to population, Cumberland County has had the edge for the past 100 years. It has been the most populated Maine county since at least 1900, when it had 100,689 residents. In 2010, its population had grown to 281,674, representing an increase of 179.7 percent over 110 years, according to U.S. Census data.
Piscataquis County, on the other hand, increased its population by only 3.5 percent over the same 110-year period, from 16,949 residents in 1900 to 17,535 residents in 2010.
“There’s a lot of research that looks at how bigger cities just tend to be more productive,” Gabe said. “Being around other smart people makes you more productive. There’s a spillover effect. It’s got to be frustrating for rural areas that don’t have a large population base to begin with. They’re kind of swimming upstream.”
“Educated versus skilled”
But not everyone agrees that the attainment of a bachelor’s degree is the only way to assess education levels, or the best way to measure a skilled workforce.
Charles Colgan, a professor at the Muskie School of Public Service at the University of Southern Maine, said there’s often an “overemphasis” on bachelor’s degrees when measuring the education level of a population.
“Bachelor’s degrees are stunningly varying in quality,” Colgan said, “so to simply say someone has a bachelor’s degree is a very, in some ways, crude measure of education levels.”
There’s also a difference between being educated and being skilled, according to Peter DelGreco, president and CEO of Maine & Co., a private, nonprofit corporation that provides free consulting services to companies looking to move to or expand in Maine.
“It’s educated versus skilled,” DelGreco said. “Does the workforce have the skills that your employers need? We gain those skills through some level of education, but there are different ways of doing it.”
For example, online education, short-course training and certificate programs are becoming an increasingly common educational tool for people. The problem is economists and demographers haven’t caught up with the trend.
“We know a lot more people are getting educated that way, but we’re not necessarily picking it up in the degree-oriented measurements we usually use,” Colgan said.
That creates a certain irony as more effort is being placed on ensuring communities have an educated workforce. “As we focus more on it, we’re becoming less able to measure the multiple dimensions of an educated workforce,” Colgan said.
Finding the “underutilized” workforce
There’s more to a company’s decision about where to locate than where the most educated workers are. Supply and demand for that workforce will also be a factor.
Portland may have the largest number of skilled IT engineers, software developers or laboratory technicians, but it’s also true that competition for those people is higher, which in the end will increase a company’s labor costs. “So it’s entirely plausible that a company would look for an educated workforce, but not want to compete with everything else going on in Portland and look to a place like Bangor,” Colgan said.
Companies looking to relocate to Maine often ask DelGreco to help them find areas with underused workforces throughout the state. For example, when data storage provider Carbonite Inc. came to Maine in 2011, it had a cost structure that fit better with Lewiston than Portland, DelGreco said. When athenahealth came to Maine several years ago, Portland was the attraction, but after touring the state, the health information company settled in part of MBNA’s former Belfast location.
And when companies ran into a dearth of qualified workers — especially in the IT field — as they continued to expand within the state, some private-sector officials got together to do something about the problem. They helped create Educate Maine, an initiative which seeks to champion college and career readiness and increased educational attainment in Maine.
IDEXX Laboratories, a global company that employs 1,800 at its headquarters in Westbrook, also supports Maine’s STEM Strategic Plan. STEM stands for Science, Technology, Engineering and Mathematics. “It is estimated that in the next decade one in seven new Maine jobs will be in STEM-related areas, and these jobs will produce wages that are 58 percent higher than wages for other occupations in Maine,” according to a 2010 report by Educational Development Center Inc.
How well an area’s business and academic communities collaborate on addressing workforce issues is also important in its overall economic development.
As an example, the University of Maine in Orono has been nationally known for its expertise in natural resources-based industries, providing chemical engineers and foresters to those industries for decades, Colgan said.
The rural divide
For Piscataquis County and the rest of rural Maine, Colgan believes the health care industry will be the key to increasing the educational level of the workforce.
As the population ages, the health care needs will draw educated health care professionals to the areas and create jobs and educational opportunities for residents, Colgan said. An increase in an educated workforce can in turn spur improvements in the general business climate, he said.
“All businesses need creative and good management, and that tends to be associated with people with the highest levels of education,” Colgan said. “Piscataquis County does still have room to improve its workforce and management skills for its existing companies.”
Besides an increase in health care needs, is there anything Pistaquis County can learn from Cumberland County’s prosperity?
Not really, according to Kenneth Woodbury, director of community development at the Piscataquis County Economic Development Council. The two counties are so different it’s hard to find practical lessons, he said.
His county has just 4.4 people per square mile, an aging infrastructure, lacks good Internet access and even a public road that directly connects Greenville and Brownville Junction, two of its most important communities. Piscataquis County has suffered from declining population and a complicated state school subsidy formula that, he said, has hit rural areas such as his very hard.
“We’ve had to close practically all our local elementary schools,” Woodbury said, adding that he believes educational attainment would improve if there were a college in the county. In Greenville, all the students who graduate go on to college — but within a year after high school graduation, they’re back home, he said.
He and other local officials are working to stem the ebbing tide of the county’s fortunes with smart, targeted development projects. Those include the redevelopment of the idle American Woolen Mills in Dover-Foxcroft into a mixed-use project incorporating commercial and retail office space, a boutique hotel, a high-speed data center and a restaurant.
“That would be a major boon to Dover-Foxcroft and the area in providing employment opportunities,” Woodbury said.
Other projects include finding a cheap energy source and building a railroad spur to woo businesses to an industrial park in Milo and developing tourism.
“The state is providing some help, but it’s not focused,” he said.
The chicken or the egg?
The discussion of an educated workforce and its role in economic development raises the question: Which came first? The educated workforce or the companies that employ it?
Hopefully, both processes — an available workforce attracting new companies and existing companies attracting an educated workforce — are under way, Colgan said. “I think that’s one of the real hallmarks of a healthy economy,” Colgan said. “It’s got both things going on.”
Take IDEXX Laboratories. When David Shaw founded the company in 1983, he did so because there was an available workforce in the Portland area. Ventrex, a Portland biotech company at the time, had been sold and moved to California in the late 1970s. Some Ventrex employees packed up and headed to California, but many stuck around, Colgan said. Those Ventrex employees who stayed made up the core of IDEXX and ImmuCell Corp., another Portland biotech firm still around today. “[Shaw] basically took a workforce in a specific area that was here and turned it into a company,” Colgan said.
Now it works the other way. IDEXX has more than doubled its local workforce in the past eight years, to its current 1,800 (while the majority of employees live in Cumberland County, nearly 500 are from throughout the rest of the state). Many of the new employees came from Maine, but many moved to the area for a job at IDEXX, according to Ann Marie Martin, the company’s director of worldwide talent acquisition. Martin is one of those transplants, having moved to Maine from Michigan two and a half years ago to take a job at IDEXX.
“I love it. It’s a great quality of life, great place to raise a family,” Martin said. “That’s a great lure for talent.”
And IDEXX isn’t worried about workforce issues constraining future growth. It broke ground in April on a $35 million expansion that will accommodate up to 300 additional employees.
Another great example of a company drawing an educated workforce to an area is The Jackson Laboratory in Bar Harbor. Hancock County has 39,585 people who are 25 or older, and 30 percent of them have at least a bachelor’s degree, the third-highest in the state. The Jackson Laboratory is the cause for the high percentage of degree-holding residents in that county, Colgan said.
But one company does not make an economic development plan. As Maine and its rural areas try to find the right formula to spur sustainable economic development, a unified vision for the state’s future, and an understanding that success and greater educational attainment won’t come because of one bright idea, is crucial, LaChance said.
“We ask our politicians: ‘What is the thing you’re going to do to fix things?’” she said. “It’s not just one thing. It has to be a number of things moving in one direction.”
She said she is optimistic that positive change will come to Maine.
“I’ve had the chance to travel the state. There are some wonderful things happening,” LaChance said. “I see hope, I really do.”
A few points if I may. First, if we had not allowed the manufacturing of so many products sold in this country to be sent overseas, the almost unaffordable goal of a Bachelors degree wouldn’t be required to find a job in Maine which paid, at minimum, a living wage. Those former manufacturing jobs often paid quite well. Now we buy our crap from China and then borrow the money back to pay for the public services that people didn’t need when they had living wage jobs. Second, the low wages that are paid in this state are for the most part not a living wage. Consequently the (un)employment numbers do not accurately reflect the economic malaise we currently enjoy, i.e. the cost of sending manufacturing overseas is much steeper than the numbers imply. Third, there is an unfortunate line of thinking here in Maine which makes the claim that a fancy/expensive school is a good way to provide an education. So education dollars go into these behemoth school campus buildings rather than spending the money wisely on the primary goal of school, to provide an education.
You make sense – good post.
According to CNN, 59 percent of the jobs created under President Obama pay less then 9 dollars an hour. in other words primarily unskilled labor. The corner store, the local burger joints, department stores. I don’t see anything changing under this regime,do you?
Anybody else got BETTER ideas?
It probably wont change under any other president either…
Yup that is correct.
I have said this right along, many people in Maine are working very hard, but they still need a little help. The poverty here comes from high housing cost, high heating bills, and long commutes for many workers. Health care, and food get short changed, there is often not much left from the paycheck. Then what Mainers that manage to have some property, are taxed so high for these schools, with often, a sports programs using a lot of the budget. I feel we need a one percent sales tax to fund the schools, let all of us, let the summer visitors, share the cost.
Great post watchdogME. I’d also like to point out that Bangor needs to become a much larger city to attract what Portland does. They have the basic infrastructure of a larger city but have lacked the draw and political will necessary to bring in new major corporations and large employers. Some great things have been done in Bangor over the last few years but in order to make the region more marketable, it’s Bangor that needs to grow.
Of course there is a large percentage of people in Maine that want virtually NO progress of any kind. We see it here on these threads all the time. In order to grow you have to be willing to grow. For many years these people have been our own worst enemy. Imo, it’s time to decide if you are okay with the status quo or would like to see the area thrive and prosper. The previous city council and to some extent the current one have made strides to grow and improve the city. Let’s hope that attitude continues.
Bangor.. Why do some people want to make it like every other city in the country? There is nothing unique about a city that has the same commerical box stores, resturants, bars that you can find in every city in all Fifty States.. It’s is like the little kid looking at the popular kid and saying, when I grow up I want to be just like him…Why on earth would we want to emulate some other city. That makes us no better or different than anywhere else. The business leaders in Bangor should be looking and thinking outside the box for something new and special to make Bangor special… Yet Bangor leaders believe in exclusion to avoid anyone getting ahead of them, their friends or families… The power grab is more important then anything else at this moment.
Interesting comment Red. For the central and northern regions of the state to prosper, it is my contention that Bangor needs to become a larger commerce, transportation and overall bigger player for the region than it is today. We can all argue the semantics of how that should be done. I realize that you are against most everything that would keep and attract young people to the region. As I stated before the previous council made progress that should be lauded by forward thinking people of the region. Being in my late 40’s now, it’s too late for my generation to see what the city will be like in 50 years. I hope that the progress that has been made is just a stepping stone to improve the economic conditions that have been so stagnant (or worse) for so long.
The answer to the city thriving, is to do the things that keep young people in the city, attract others that are deciding where to settle and change the image of the city as a sleepy little town with nothing to do. Let’s face it, the region has suffered with that label (and rightfully so) for 40 years now. Until very recently, the status quo was acceptable. Now it is not. Former councilor Gerry Palmer said it best, and I’m paraphrasing, Bangor has a tendency to think “small”. That’s the attitude that needs changing. He deserves credit for calling it as it is. If you THINK small, will you ever be anything but? Those are some of my thoughts on how to make things better Red. I’d love to hear some of yours.
Turning the Technical Colleges into Community Colleges watered down the original mission of these institutions. Liberal Studies grads don’t really have marketable skills. There are not enough open spots to accommodate the demand for nursing, auto technicians, welders etc.
rural maine is largely out of luck. the economy has changed, but Maine is stuck in the 50s. no major employer is going to want to locate in rural Maine because the population is older and uneducated, and the infrastructure is poor. We should focus on luring major employers to Portland, Lewiston, and Bangor. We should focus on smaller businesses, especially natural resource, agriculture, and tourism based ones in smaller towns.
and no one wants to relocate their business to the isolated state of Maine. It’s too far north and it is hard to get to, basically one road in and one road out.
Waiting to hear the Gov drop a 1-liner on that article. It’s too full of facts for he and Adrienne Bennett and the rest of the MHPC sorts to react to.
Rural Maine is old, less well educated and too far out of the way. Even if they were educated, they’d just have to move, as my kids have done.
Tourism (do I hear Northern Maine Nat’l Park, anyone?), forest products, servicing the wealthy on Moosehead and other lake and on the ocean is the future for rural Maine….
I’ve said for years that any kid with ambition runs away from the county as fast as they can.
I love the County. Great place to live if you can afford to live there on minimum wage.
I just read a book regarding the much talked about skills gap. And the author stated that it was his belief that this is not so much a skills gap as the result of an economy where there are so many qualified applicants that bosses can afford to be choosy. The problem becomes that in the search for the perfect candidate, essentially one who can do the job without additonal on the job training, many good people get overlooked, even if they have the educational credentials and experience. So while businesses and agencies hold out for the ideal candidate, they overlook a number of qualifed people. And a Bachelors degree is not necessarily a guarantee of success. I earned mine in Massachusetts, and despite having the degree and many years of experience, Maine employers have treated my credentials as practically non-existent because they were not earned here. And the wage scale for the level of education, training, and credentials the prospective employee is expected to have is unrealistic at best.
Not to mention they can hire someone less credentialed for less.
Yes they can, but I think that many employers want to hire the person with experience and credentials, but pay them at the same low rate as the less credentialed.
There are few people for customers, therefore the demand is low for labor.So the pay is low. No people with money equals a dead economy. The politicians have discouraged people with skills and money to move to Maine because of high taxes and an expensive cost of living. We have experienced 42 years of Democratic control we had no chance to excel.
Other posters have made some good comments. One thing I have noticed is that rural areas in all parts of the USA, do not look very prosperous unless the agricultural base is strong. In my mind, it is not so much the agricultural jobs themselves, but the support jobs needed to sustain the farms. I’m thinking of machinery, fertilizer plants, warehouses, elevators, and the like.
The places where the farming seems a thing of the past, look old, seedy, and tired. That seems to be as true in New York State or in Indiana, as it is in Maine.
Lower taxes, don’t be so strict with the environmental laws, put a stop to all the welfare, and stop listening to people from out of state on how to run Maine, this is why i moved to NH i grew up in Millinocket and love it there but it has changed so much I had to move elsewhere. Maine has many talented people, especially known for hard work, it is just not a friendly place to do business, If the income tax was lower I would move back in a minute
If someone wants to set up a business that needs skilled workers anywhere, they have to be willing to compete nationaly if not globaly for that talent. If they offer an attractive enough package, there will be no shortage of people willing to come to their better mouse trap.
If on the other hand they move to say Piscatiquis County and offer pay and benefits on a par with the local income, they are only going to get what they pay for.
If someone were to set up shop in Calais for instance, at this time you could buy up half the town for a song compared to realestate in Portland or Boston. You could then lease, rent or sell these houses to new employees from where ever you could get them. It’s a beutiful area just waiting for a developer or manufacturer with vision.
Looks like you can thank our lawmakers in Augusta along with places like Hollywood Slots, Bar Harbor coastal entities promoting business to be either in Southern Maine or places mentioned. My point is, the Passamaquoddy business in Washington County didn’t pass. East Port hasn’t been developed to accommodate big ships of tourist because southern Maine businesses and Bar Harbor claim their way of life would be affected. This state will always have this inbalance because small business or rural areas in Maine can’t out vote or have enough clout to outdue big money and outside influence on our lawmakers.
One of the reasons the United States asked to spearate from England, mentioned in the Declaration of Independence.
“He has refused to pass other Laws for the accommodation of large districts of
people, unless those people would relinquish the right of Representation in the
Legislature, a right inestimable to them and formidable to tyrants only.”
Yet, one of the first things thrown out in the Constitution when each person has equal representation, but the bulk of the population live in cities.
Penobscot county and Bangor as the county seat used to be the Hub for all the Northern countries and many businesses. These other counties are dying and businesses are leaving there. So it is only reasonable to think that Bangor will do the same… I buy a new pair of New Balance sneaker every year weather I need them or not to do my part. I shop as local for food and other goods as possibile, Bed works makes their own products here in the Bangor area, and the furniture store on stillwater Avenue sell a ton of Maine made products.. The more money kept in the area the more the area will prosper… What are you doing to keep the money local and to improve the area?..
Is it the lack of skill, or the lack of businesses that takes the skill out of Maine. It was only decades ago people talked about how the young folk were leaving the state for jobs. We need jobs to keep the skill local.
As a tourist state we need people to run the shops, cash registers, hotels, clean up, ice cream shops and sales, low skill low paying jobs. Until, we can figure out how to make those jobs more efficient and replace man’s job with machine like manufacturing.
Also, when starting a business, isn’t it about location, location, location? What it the advantage of being surrounded on three sides by a foreign country when free trade isn’t exactly equal or fair? Actually, I would think that would or could provide opportunity, since to make a profit, we need more exports than imports, but at the same time, that could be the problem.
For some cities in Maine it was easier before the requirement of passports and places where people cannot cross the border on a 24 hour bases to get supplies from Canada. Also cheaper when the exchange rate was in American favor. This provides money for Canada not America, while at one point providing savings for Americans. Unless, Americans provide for those Canadian cities.
Maine did not participate in the high tech businesses. The reason being is that has not produced a skilled workforce, it has high taxes which does not attract skilled worker, and its cost of living is expensive. You may want to look at 42 years of Democratic control in Augusta as the culprit. I cannot even find a surgeon in Maine to do a hip operation. So far I have been waiting for an appointment for the past six weeks just to talk to a surgeon. The entire system is broken.
Maine is stuck in a rut… Business attraction is looked at as the savior of the economy. Maine should worry about the businesses that are already here. There are thousands of jobs starting a $40k plus full benefits that are going unfilled RIGHT NOW!
Maine look in the mirror and you will see the solution to a stronger economy.