A new report has revealed that even though Maine recovered quickly from the recession caused by the pandemic, that improvement has obscured “continued fundamental weaknesses that are affecting the state’s economy.”
The issues identified by the Maine Center for Economic Policies annual “State of Working Maine report highlight that many jobs remain without basic protections for workers — even as workers are increasingly asserting their authority and demand better standards. And that wages have been hindered by the high rate of inflation.
The study, which was authored by MECEP economist James Myall, found that Maine has seen a nearly complete recovery from the financial downturn that was caused by the onset of COVID-19’s pandemic in the year 2020. Employment is almost returning to pre-pandemic levels as well as the state’s GDP rising above prior to the crisis. Myall said that the state’s recovery was due partly to an aggressive fiscal response from the federal government, who offered states and individuals money during the outbreak through different programs.
Overall, Maine’s economic recovery from the recession was more rapid than the recovery following that Great Recession of 2008. Following the recession, Maine’s growth and employment rates slowed in comparison to pre-2008 levels for a period of time until 2016. This Myall explained partly to austerity policies, which were in place predominantly in LePage’s administration. LePage administration.
The report did find that recovery following the outbreak is shaky and has concealed a number of warning signals for Maine’s economy.
Inflation dampens the effect of wage growth
A major issue is the rising cost of living, and it is at a higher level than ever before in the U.S. than at any time in the past 40 years. While a strong economy has led to higher pay for Maine workers, the study discovered that the “rapidly increasing price of living diminished the benefits” of the higher wages. For instance, while the wages of middle-income people in Maine have grown by 18% over the past three years of the report, prices have increased by 13% in the same time. This results in a real increase in wages of less than five percent for the workers in this time frame which, as Myall says is “much smaller than the dramatic increase that is reported in the headlines of many newspapers.”
Payrolls that are not increasing enough to be able to outpace inflation is a major concern in the direct care and child care sectors according to the report. Both occupations have been underpaid for a long time, leading to a deficiency of these workers. The market has been unable to address the issue, Myall said, calling for the intervention of the state to increase these workers’ salaries and provide subsidy to those who need to get access to services. The state has taken action to boost child care and direct-care employees’ salaries, Myall argued it might not be enough to lure employees to the sector in the long run, particularly given the constant problem of inflation.
Industry professionals are seeking better working conditions in order to attract prospective employees.
“Our early childhood education system is sagging. There are a lot of families in Maine who have no choice to care for their children,” Terri Crocker, the proprietor of Creative Play Childcare in Bath reports in the report.
In light of the current economic climate in Maine, it is no surprise that the Working Maine study makes several recommendations for improving wages of workers against the rising cost of living. The first one is to protect and increase the minimum wage in Maine that is currently dependent on what it costs to live. But, MECEP has found that by going above that, and increasing that minimum rate to $16 per hour in 2025 Maine will increase the pay of 350,000 people and help to address the issue of economic inequality.
Myall also suggests paying direct care workers appropriately and requires employers to disclose in job applications regarding the amount of wages potential employees will receive.
Protections for workers must be improved .
Another issue with the positive economic growth is that protections for workers are not enough for a lot of employees, as stated in the report. Myall says that the flu has caused many workers to reconsider their work-related responsibilities and resulted in a large number of them leaving to pursue new jobs. The percentage of Mainers leaving their jobs and getting recruited for new jobs is at its highest over the last two decades, according to the report. The higher wages are the primary reason for people to change jobs, in addition to low-cost health insurance, more regular hours, and paid time off.
With this much labor “churn,” Myall argued that more needs to be taken to improve the working environment for Mainers. There have been some modest improvements achieved over the years such as the time that Maine’s paid-time off law came into effect in 2022. This law led to the amount of Mainers who are paid for time off to rise from 33 percent during the five years prior to the pandemic , to 54% this year.
However, a significant portion of Mainers remain facing the possibility of financial difficulties should they need to leave work due to health issues or taking care of a family member or any other reason, Myall pointed out. He suggested that the law on paid time off should be expanded to include more workers , and include provisions that protect against retaliation. This is something the law currently doesn’t have. A bill that would prohibit the employer from retaliating against employees who take advantage of the paid leave was blocked by Governor. Janet Mills in 2022.
A further suggestion to improve the standards of labor is to establish an equal workweek norm, which will require businesses to develop regular schedules for employees. Insecure schedules Myall says, are proven to have negative effects on the bottom line of workers and their mental and physical health.
A recent rally to show support of Chipotle employees located in Augusta • Maine Service Employees Association, SEIU Local 1989, on Facebook.
Another policy that can enhance the lives of workers is the paid medical and family leave. This permits employees to be off for a longer duration of time. This is different against paid vacation time, which is the short-term absence of employees. Maine could have the chance to establish an unpaid medical and family leave system by 2023 via legislative action or at voting on the ballot, because the advocates (including Maine People’s Alliance, of which Beacon is a part of) are collecting the necessary signatures to vote on a possible referendum.
In discussing ways that the standards of labor could improve, Myall noted the increased the leverage that workers are currently enjoying when businesses and other employers try to fill positions.
The power of the union is manifested in the rise of unionization activities in Maine and across the nation as workers attempt to establish collective bargaining units in a variety of sectors, including those owned by giant corporations like Chipotle or Starbucks. Workers’ power has reached levels that have not been seen for decades, MECEP found.
“Now that the world has recognized the value we have now is the time to demand to be treated as employees in any other sector,” Brandi McNease, who led an upcoming unionization campaign at the restaurant Chipotle in Augusta she said within the article.
However, the study concluded that “as as the power of workers has grown but it’s still hampered by the power of many firms and companies,” with employers often striking back against the unionization effort.
To tackle these issues The report suggests that policymakers ensure that workers have union rights in Maine without the interference of bosses. Myall is also calling for enhancements in the bargaining power of unions working in the public sector in Maine. Arbitration decisions regarding pay and benefits for employees of these unions aren’t yet binding, which allows employers to largely overlook the demands of their employees. Union workers from the public sector in Maine are not permitted to organize a strike. This reduces their influence, Myall argues. In addition, the report suggests that farmers be permitted to join unions. They have been denied basic protections from labor such as the right to join a collective bargaining group or even be classified as employees under the state’s laws on wages and hours. A bill approved by the legislature which would have permitted farm workers to organize was blocked through Mills on January.
The structural barriers that hinder too many from the workforce .
Another problem Maine has is that some people are unable to fully participate -or even at allon the job market. The main barriers to employment Mainers confront include health concerns and caregiving obligations, as well as fewer jobs in rural areas, and ongoing discrimination based on race, according to the study. There are opportunities for people with disabilities, Myall found, and adding them to the labour market could boost the economy, without depressing wages for workers already employed.
One indicator of Maine’s issues with full employment is the fact that there are lower numbers of people in the prime age range between the ages of 25 and 54 that are participating in the workforce before the pandemic. The decline in participation hasn’t manifested completely in Maine’s overall job market since the older workforce remain employed for longer, according to the study.
Myall says within the study that decrease in the percentage of those of prime age working suggests it is because “people are either depressed about their abilities to find an employment that pays a reasonable wage or are that makes them unfit to work (for instance, a health issue, insufficient child care or transport issues).”
In addition, asylum seekers are prohibited from applying for an employment authorization for only 180 days. which prevents an additional group of the population from entering the workforce.
“I would like to own an apartment and be able to take care of myself, my friends as well as my loved ones. It’s difficult to sustain myself with no work,” Gervin Kah, an asylum seeker in Maine stated within the document.
To solve these problems working in the workforce it is suggested that the government must aid people of prime age return to work and also assist older Mainers who wish to stay working, and allow those who wish to retire in peace.
There are several policies that can help to achieve this goal, such as continuous public health initiatives to stop spreading COVID-19 informing employers to provide accommodations to those suffering from long-term COVID as well as increasing the accessibility of health care facilities (including the mental health care system) as well as establishing the largest subsidy available of child-care, ensuring the funding for community colleges that are free and enforcing anti-discrimination law in the workplace.
“Maine legislators are given the chance to build upon the momentum created by workers themselves and shape economics in a manner that benefits everyone in the world -an economy that fair compensates workers, and ensures that every workers are treated with respect for their the most basic rights,” Myall writes.