Lawmakers have attributed Maine's labor challenges to a workforce participation rate 4 points lower than the national average.
A sign advertises jobs at a small grocery store on April 28, 2023, in Jonesport. Credit: Robert F. Bukaty / AP

Continued low unemployment and the workforce shortage suggest Maine will have difficulty supporting significant job growth, according to the director of Center for Workforce Research and Information.

Maine’s unemployment rate has been below 4 percent for 22 straight months, the third longest period in state history of such low rates. And the rate has been below 3 percent for four months.

Director Mark McInerney told the Revenue Forecasting Committee that the constrained labor market has yielded wage growth for workers, but that employers will need more of them if they plan on adding jobs at a higher rate than they are now.

“Additional job growth beyond the levels we’re seeing now would most likely have to be driven by further population, and thus further workforce growth,” he said.

McInerney said in-migration during the COVID-19 pandemic helped Maine mitigate some of the workforce shortage, but the arrival of new residents dipped slightly last year compared with 2021.

Some state lawmakers have attributed the worker shortage to a Maine workforce participation rate that’s 4 percentage points below the national average. But McInerney said Maine lags in that category because the state’s eligible workforce has a lower share of workers younger than 35 and a larger share of workers older than 65 than the national average.

“The 4 percentage point gap between Maine’s labor force participation rate and the nation is entirely explained by … the age distribution of the working age population,” he said.

Policymakers and business leaders have long worried about the demographic challenges of Maine’s workforce and are pushing for affordable child care and housing, as well as a loosening of work rules for asylum seekers.

This article appears through a media partnership with Maine Public.