Growing the Pie

Let's strengthen Maine's economy

Key Difference Between Foundational and Service Jobs

Foundational and service jobs are both important for the economy overall. Yet there’s one primary difference between them.

Foundational jobs create value or bring new money into a state or economy. For example, a lumber mill in Maine sells its lumber to construction firms elsewhere in the country. Money then flows into Maine’s economy to pay higher wages, business investment, and government services like police, firefighters, schools, and infrastructure.

In contrast, service jobs circulate money already in Maine’s economy. Someone from Maine hires an accountant or goes to a healthcare provider, for example, and money already in the economy changes hands without adding value, creating wealth, or driving economic growth.

Foundational jobs are absolutely necessary for economic health, both in the short and long term. They’re also important so that young people have job opportunities and stay in the state, thus providing the government with tax revenue so essential services can continue to function properly.

Service jobs have been increasing relative to foundational jobs throughout the national economy, but the impact has been even greater in Maine. Here our legacy industries have been declining and those foundational jobs have not been replaced by cutting edge growth industries of the 21st Century while the service and public sectors have grown.

The Struggles of the Modern Economy

Many people, including those who have lived in Maine for their entire lives, wonder just why the state’s economy is struggling to create new foundational jobs. In short: competitive factors.

Maine, despite its wonderful natural resources and potential for economic growth, also has certain elements working against its markets. For example, many in Maine pay much more for electricity, healthcare and taxes than those in many other states. Wages, meanwhile, are generally lower.

How to “Grow the Pie” and Gain New Foundational Jobs

At the moment, Maine’s economy is increasingly dominated by service jobs rather than foundational jobs. But there are ways to change this and to help Maine reach a brighter future for everyone.

It’s a big challenge that can’t be solved with piecemeal or partial solutions. That’s why Maine needs a comprehensive, long-term economic plan that addresses all of the issues that impact job creation: regulations, taxes, business and living expenses, investment, education and workforce training, infrastructure, innovation, and public services, just to name a few.

One thing is for certain: we can’t rob from one part of our economy to grow another part. We have to grow the entire pie for everyone. Growing Maine’s statewide economy is key to ensuring our collective success for the future. Working together, implementing smart public policies, and facilitating an attractive economic environment for foundational jobs and businesses is vital going forward.

Foundational jobs are truly essential for the future of Maine. Sign up for our newsletter today to stay informed and to help us work toward our goals and build a brighter economic future for Maine.