What purpose does Maine serve in the U.S. economy?

by philg

Perhaps there are some readers from Maine who can answer this question…  Why are there any jobs at all in Maine?


One thing I noticed from reading the local newspapers up in Moosehead Lake is that the non-tourist economy of Maine seems to be in trouble.  Wood and paper products can be obtained more cheaply from Canada under NAFTA.  The fishing industry is in decline due to lack of fish.  Tax rates are the highest in the U.S. because state and local government wants to pay itself and operate just like the Massachusetts government, for example, but without the high salaries that enable Massachusetts to be both profligate and rich.  (E.g., the average schoolteacher in Maine earns $37,000 for a 9-month tour of classroom duty, maybe 20 percent less than in Massachusetts, but her students’ parents may be earning less than half of what their counterparts in the Boston suburbs earn.)


You’d think that the answer would be tourism but most of Maine is too far from the crowded cities of the East Coast to make a practical weekend getaway.  The locals in Moosehead say that the amount of business from hunters is way down; the average hunter is getting to be very old.  Telephone customer service centers for banks have been important sources of employment for the last couple of decades but today most companies would probably send those jobs to India.


What is the role of Maine in the U.S. economy?  The workforce doesn’t seem to be especially well educated.  The climate is not attractive to most people, except for a few months in the summer.  Taxes are higher than almost anywhere else in the country.  Transportation of products to or from Maine is expensive because it is at the end of the road.  Are states like Maine to become the first victims of globalization?

17 thoughts on “What purpose does Maine serve in the U.S. economy?”

  2. i grew up in Dexter, maine, the home of Dexter Shoes up until about a year ago when Warren Buffet bought the company from the local owners and moved operations to china to bleed a bit of quick profit out of it before putting it to sleep. up until that point, Dexter Shoes had been nicely profitable. it wasn’t making a fortune, but it was keeping the locals employed and making the owners enough to live on comfortably. the shoes had a reputation for quality construction and the workers in the area had a reputation for good quality semi-skilled labor.

    maine’s industries in a nutshell: paper, lumber, potatoes, tourism, and lobsters. the paper companies seem to be in trouble, but this is a pretty recent development. the tourism is mainly coastal but brings in a *lot* of money and feeds the neighboring towns.

    one thing that you won’t hear in most mainstream press is that maine’s largest cash crop is marijuana. it brings more money into the state than potatoes, blueberries and lobsters combined.

    one key thing to keep in mind though is that the population of the state is only about 1 million people. that’s very small. so it really doesn’t take much income to sustain that small a population. taxes aside, the cost of living is extremely low if your not right on the coast. my sister recently bought a 2-story farmhouse with a couple acres of land in Dexter for $30,000. comparing her mortgage payments to my NYC rent makes me want to cry.

    i’d also like to know where you get the $37,000/year figure for teacher salaries. that is about twice what public school teachers that i know in the inland parts of the state make.

    overall though, yes, the Maine economy is in serious trouble. when the recession in the late 80’s / early 90’s hit Maine never recovered. most of the country had an economic boom from the mid 90’s till the end of the decade and Maine never saw any of that prosperity.

  4. If you take a look at this map, Maine’s purpose in the economy becomes clear.

    Without Maine, we’re in danger of having Canada tip over and collapse on the entire eastern seaboard! That would be catastrophic!

  5. I’ve lived in Maine for about 7 years. I moved here because my girlfriend was here and she wanted to get back together. As it was easier for me to leave the the skibum lifestyle than for her to leave the graduate program she was in, Maine was my destination.

    After scraping by with two jobs, one at HomeQuarters, one at the Humane Society, I ended up getting a job in a Central Maine ISP, MINT. I worked my way from tech support to Network and System Admin. Now that MINT is gone (bought by big corporate megolith and then killed) I work for another technology company.

    Much of the old economy of Maine is dying. Things change ,we all need to realize that. Most of the mills are shut down, but there are still plenty of people taking wood from our forests. Shoe factories are almost all gone, paper mills, wood product mills, etc.

    Where you see things continuing in those industries is the niche markets. About 90% of all the wooden golf tees in the world are made in Maine. Wooden row markers for gardens? In maine. Using wood products, but for other purposes.

    We see old mills being bought by people like Marden’s and a few other small businesses move into the old mill.

    We see a lot of things like MBNA (buying Camden and Belfast and Rockland) and other service companies happening. Continued call center business (Microdyne/Envisionet) and continuing jostling in the ISP business float a tech economy. However, the tech business also is supported in a focus on smaller Mom and Pop type ISP’s. The bigger ISP’s in the state are NOT the prexar’s (Canadians that came in with the power of NBTel) or the Adelphia’s, but are more concentrated in the GWI or Midcoast companies.

    Maine offers employers and businesses a focus on locally owned and operated companies. I have seen several ISP’s who tried to get too big for themselves fail, primarily for over expanding themselves and forgetting that they were dealing with customers in Maine. Forget that your customers are hard working down to earth Mainers and you doom your company to failure.

    I see the future of Maine as a service community. If we can manage to get a lower tax burden, we could really see companies flock here to give their employees a Maine experience. But simply posting a “Shouldn’t your business be in Maine?” sign on the busiest section of the turnpike won’t do it.

    I also see us as being a technically savvy service economy. Whether anyone likes it or not, the Maine Laptop program is going to be getting our students hands on with technology and hands on with systems like they’ll see in the Internet (OS X on Mac – i.e. Unix based). It’s not just the beautiful scenery that brings people to the annual Camden Technology conference (Pop!Tech, http://www.camcon.org). And special intern programs with high end data centers and the University system will further educate our students in the ways of Internet technologies.

    Of course, I could be wrong and we’ll try to subsist on lobsters, blueberries and potatoes, fail miserably and drive away everyone and end up becoming a backwater state with no measure of economy beyonf that which is subject to typical agricultural issues, but also legislation by pointy heads in Washington, DC that have no idea how a lobster trap even works.

    j

  6. Anders: My source for the teacher salaries was an NPR news broadcast that I heard while driving around up in Maine. http://www.nea.org/edstats/images/03rankings.pdf shows that for the 2000 school year Maine teachers were making an average of $36,373 for the school year against a national average of $43,400 (Michigan, NY, NJ, California, and Connecticut are the only places where the average teacher makes over $50k for 9 months).

  7. Poland Spring from Maine is the best tasting natural spring water. Hope somebody would know its economic impact …

  8. Turn it into a giant military base. We should get something for our budget deficit dollars.

  9. i’ll take a look at that study. it must just be really skewed from the wealthier coastal towns.

    Sarasota’s comment reminds me that Limestone, Maine used to be home to Loring Air Force Base, which was one of the largest AFB’s in the country and was the preferred launch point in case we needed to nuke anyone in europe. that got shut down in the 90’s. now they use the land to host a giant phish concert every summer.

  10. I’ve lived in Maine for 10 years and love the climate year-round. Some of us really enjoy snow and cold weather, as well as fabulous falls and very tolerable summers. (Can’t say much good about spring, though; that’s when we travel.) As for the economy, many people here work a couple of part-time jobs, one of which is often as an artisan, craftsman, carpenter, etc. Or in a family, one adult works for money and the other adult doesn’t. More people here than in other places I’ve lived (in the mid-Atlantic for most of my 40 years) grow their own food, school their own kids, cut their own firewood, govern their own towns, etc. I think Maine provides a good economic model for the rest of the U.S. — work only as much as you need to and make do with what you have.

  11. SCHOOL TEACHER PAY:

    Average first year pay: $24,054 (48th out of 51)
    Average teacher pay: $37,300 (38th out of 51)
    Nationwide average: $44,367

    Source, as reported in the Press Herald, from source American Federation of Teachers. This was a story in the news up here at about the time that Philip was apparantly visiting Vacationland.

  13. The salaries of public school teachers is more a measure of their political influence than their economic demand.

    To say–almost in the same breath–that Maine is a “victim” of globalization and that Maine has high taxes raises the question: why would a productive person move to Maine?

  14. I moved to Maine in 1987 and lived there for a few years working as a Financial Analyst for Bath Iron Works. Lots of things happened personally while I was there including a decision to switch careers to IT. There wasn’t much IT there and I moved away (I was looking in the Bangor area). As for the economy, when I was there, it was much like the rest of that part of North America (Maine, New Brunswick, Nova Scotia, Newfoundland) – extractive industry (fishing & lumber being the biggies), tourism, local services, small-scale industry (except BIW), etc. The call centers came after I was there; I think the state gave away tax incentives – a short-run patch; in the long-run they’ll follow the cheap labor elsewhere. These places have similar economies to a state like Oregon, but are too far removed from the economic pulse of America or Canada to have the high-tech influx that brought prosperity to Oregon (which is fading now).

    Funny though with all that going against it, you’ll probably find that few Mainers would want to live anywhere else. There is more to life than a job and there is more to life up there than work, suburbs, and shopping. That is what I liked about living there – the wealth of opportunity to get out and enjoy the woods, lakes, rivers, and sea. I’d move back in a minute if I could make at least 3/4 what I make now.

    One opportunity for those in the north is the prospect of a ‘Maine Woods National Park’. I’m torn as to whether it is the right thing to do; preservation is, but is a park the best way to achieve it? I wonder what the current buzz is about the park proposal in areas like Greenville; I know there was strong opposition a few years back. Seems a park would treat the area better than Irving or Bowater in the long run. Of course, there is more to the story that I don’t know about, I’m sure.

  15. I think that Maine is to become the dumping ground of tens of thousands of Somalis and possibly other immigrants. Already a few thousand have moved to the area to take advantage of Maine’s generous welfare program.

  16. The comment above about Warren Buffett buying Dexter Shoes “about a year ago” and moving it all to China is inaccurate. Berkshire Hathaway (Buffett’s company) bought Dexter in 1993. If the manufacturing finally moved to China only last year, this probably indicates that Buffett tolerated years of unprofitable operations and finally gave up only last year. You can probably read what Buffett has written about it at http://www.berkshirehathaway.com.

  17. Angela Lansbury needs to get her tired ass back there and start filming Murder She Wrote again. This will do wonders for their economy.

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