AUGUSTA, Maine — An estimated 61,000 Maine jobs could be lost by the summer as the new coronavirus drags the country into a recession, according to a new analysis from the liberal Maine Center for Economic Policy and the Economic Policy Institute.
That figure would equate to more than triple the jobs lost in the state during the Great Recession and more per capita than all but eight other states. But the Maine Center for Economic Policy predicts the economic fallout from the coronavirus will hit the economy harder and faster as officials shut down businesses deemed nonessential.
It has triggered unprecedented levels of unemployment in just a week in the U.S. More than 21,000 Mainers filed for unemployment in the week ending March 21, a 3,200 percent increase from the previous week. The hospitality industry was most affected, with as many as one in seven workers in the food and lodging industries filing for unemployment that week.
Those figures set a new state record for weekly claims filed, despite reports that residents are struggling to file for unemployment, in part due to an inability to contact the Maine Department of Labor for assistance. The previous record was 5,634 during the Great Recession between 2007 and 2009. Last week’s unemployment numbers will be released on Thursday.
As evidence of a recession, a report from the Maine Center for Economic Policy uses estimates from financial firms including J.P. Morgan, which told investors last week to expect a 10 percent decrease in GDP for the first quarter and 25 percent for the second quarter. A recession is typically marked by two consecutive quarters of negative GDP growth.
Gov. Janet Mills doubled down on the state’s efforts to slow the virus’ spread Thursday when she ordered Mainers to stay home in most cases except to buy necessities or work at essential jobs through April 30, placing Maine among a majority of states to enshrine similar emergency measures. She has closed nonessential businesses including shopping malls, salons and gyms.
The economy will be further hit as people stop spending money on things like entertainment and tourism, which will not be outweighed by a surging demand for groceries, wrote Sarah Austin, a policy analyst for the Maine Center for Economic Policy.
Those “demand shocks” are a “natural result” of sudden unemployment and social distancing, which public health officials are pushing as the top way to slow the virus’ spread. Austin said they make the recession “unique” because they are necessary to slow the virus down and prevent health care systems from being overwhelmed.
It will mean declining sales and use taxes and income tax revenues, imperiling key revenue sources for the state and likely necessitating further action by the federal government and state legislatures. Congress passed a $2 trillion stimulus package last month, when the Maine Legislature passed a $73 million spending bill and an omnibus package focused on the virus.