These Five Factors Make Maine’s Economy Most Vulnerable to COVID-19 Fallout

Key factors include Maine’s aging workforce and reliance on hospitality, tourism, and retail jobs

On May 7, we published this piece on how COVID-19 had exposed the danger of losing foundational jobs in Maine. Specifically, Maine’s shift in recent decades away from good-paying, goods-producing jobs toward lower-paying hospitality, service and retail jobs has made our economy far less resilient to economic downturns.

The Alliance for Maine has long called for rebuilding our foundational job sectors as a strategy to strengthen our economy, provide better opportunities for families, and generate the tax revenue necessary to fund public services.

What’s also true is that Maine has made its economy uniquely vulnerable to a pandemic that threatens the elderly, interrupts consumer spending and puts a virtual halt on travel.

A new study published by Oxford Economics now finds that Maine is, in fact, the most vulnerable state in the nation for COVID-19 economic fallout. The global economic forecasting firm pointed to Maine’s elder population and dependence on tourism and retail activity.

The study also found that Maine’s prevalence of small business and self-employed workers add risk, since these firms are less likely to have the financial resources to withstand closures and reduced customer spending.

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Unfortunately, the economic shocks that are hitting the private sector will ripple through state and local government, as depressed tax revenues will curtail Maine’s capacity to help people through public programs.

On the other hand, we can see that foundational job sectors are more resilient to the COVID-19 economic impacts. Biotech, research, manufacturing, construction, fishing, and farming were all cited as sectors that can be agile, continue with social distancing and even see new business opportunities connected to the pandemic.

Foundational jobs are steady, stable and resilient. They are the type of jobs that generate growth in good economic times and a measure of safety in bad economic times.

The COVID-19 pandemic has reinforced the need for Maine to have a comprehensive, long-term plan for rebuilding our foundational job sectors.