Maine is headed for a significant labor shortage that could spell trouble for the state economy and opportunity for tomorrow’s job-seekers. The exact size of the shortage remains unknown, but predictions that it will occur are based on simple math.
In 2012, the number of Maine residents between the ages of 45 and 64 totaled roughly 411,000. Most members of that group are expected to exit the labor force by 2032. At the same time, there were 302,000 residents under age 20, most of whom are expected to enter the workforce by 2032.
Even if none of those young people left the state, the aging of Maine residents would generate a shortfall of up to 109,000 workers – a significant problem in a state where the workforce totaled about 705,200 in July, according to the Maine Department of Labor.
“A lot of people are going to be aging out … and there’s not going to be enough young people to replace them,” said Edward McKersie, founder and president of staffing and recruiting firm Pro Search Inc. in Portland.
Based on those projections, economists say six out of every seven job openings in Maine over the next several years will be to replace existing workers leaving the labor force, which began shrinking in 2013. During the 12 months ending in July, it decreased by about 10,700 workers.
While labor analysts understand the scope of Maine’s overall shrinking trend, they don’t yet know how it will affect specific industries, said Glenn Mills, chief economist at the Labor Department’s Center for Workforce Research and Information
For instance, it is impossible to predict the age at which each participant in a particular profession will retire, Mills said.
“Those are sort of the unknowables,” he said. “It’s challenging along those lines.”
Maine is the oldest state in the nation by median age, Mills said. The leading edge of the large baby boom generation has reached retirement age, and all of that group will surpass age 65 in the next 15 years, he said.
“A great deal of high-value experience will be lost to employers with their exodus from the workforce,” Mills said. “Combined with a much smaller population of youths and young adults to replace them in the labor force, the situation makes for a slow job growth outlook in the near term, and, if we do not foster an environment that will entice higher rates of in-migration to stem this demographic tide, we will see outright decline longer-term.”
The decline in the labor force is a serious issue that the Labor Department has been warning about in various reports and presentations.
Mills said it is happening because the birth rate in Maine plunged in the 1990s and has not recovered.
“We have reached a point where there are more people retiring each year than young people beginning their work life,” he said.
In 2010, the nonprofit Maine Development Foundation set out to determine what it would take to make up an anticipated shortfall of 65,000 workers in the state by 2020. Along with the Maine State Chamber of Commerce, it asked more than 1,000 business leaders for their input.
The general consensus was that bridging the gap would require a significant boost in workforce participation among those already living in Maine, as well as redoubling efforts to recruit workers from outside of Maine.
According to the foundation, roughly 20,000 young adults living out of state would need to be lured to Maine, along with about 12,000 foreign citizens. In addition, 10,000 Mainers with disabilities, 12,000 older residents, 5,000 veterans and 6,000 disengaged youths would need to be coaxed into the workforce.
“There’s need across all levels of the job spectrum,” said Ryan Neale, the foundation’s program director. “If we don’t do something to grow our workforce now … we stand to lose a significant portion of our workforce.”
There is a good chance that the impending worker shortage will change the way employers and employees view retirement, said Charles Lawton, chief economist at consulting firm Planning Decisions in York and a columnist for the Maine Sunday Telegram. It’s likely that many Maine workers will stay on the job well past age 65, especially on a part-time basis, said Lawton. In addition, employers will continue to implement various technologies such as automation to increase productivity and eliminate the need for certain jobs.
“If you don’t have people to replace existing workers, you’re going to look to technology,” he said.
Lawton said the onus is on Maine’s learning institutions to do a better job of preparing young people for the jobs that will be most needed. He described those jobs as “not replaceable by technology but made more valuable by technology.”
McKersie is working on another approach: marketing Maine to job-seekers in other states. He is developing a website called LiveandWorkinMaine.com that will promote the state by showcasing an extensive, searchable list of available jobs. He plans to launch the site in October.
McKersie said the website will demonstrate that there is a lot more to the Maine labor market than low-paying service jobs. At the same time, he said, not every great job in high demand requires a college degree.
“A lot of the trades are in demand,” he said. “There are not a lot of unemployed electricians and plumbers.”