April 19, 2019

Sluggish economy hits small Maine businesses About 100 workers lost jobs in past week alone

BANGOR – At least 100 people lost their jobs in the last week in Maine, and except for the people directly affected by the cuts, hardly anybody else knows about it.

These individuals work at small businesses that generally don’t have the statewide name recognition that L.L. Bean, Fairchild Semiconductor or Dexter Shoe have. They are the people state economists had predicted could lose their jobs during this recession.

The reductions are the ones “you don’t know about and I would have to search to find” because they total one or two people here or 15 people there at companies that employ 50 or fewer people, said Paul Luce of the Maine Department of Labor.

Luce is a coordinator of the state’s “Rapid Response” team, which meets with dislocated workers to educate them on their unemployment benefits. On Wednesday, he spent time with 30 people at Heritage Salmon in Eastport who were told late last week that they were losing their jobs.

Besides Heritage Salmon, the state recently was notified about other job reductions. They include: Maine Coast Nordic in Calais, eight people; James Julia Auctioneers in Fairfield, five people; Pat’s Pizza in Calais, 11 people; Greenville Steam Co. in Greenville, eight people; Maine Apple Growers in Buckfield, 20 people; EPX in Portland, 15 people.

“I’m looking at about 100 people,” said Luce, reviewing a list of small businesses that are reducing their staffs. “That’s like one sizable dislocation.”

The big companies, too, are cutting jobs this month. L.L. Bean announced it would eliminate 175 positions, DeLorme in Yarmouth said it would cut 52 jobs, and Fairchild Semiconductor in South Portland stated it would cut 30 positions.

With Federal Reserve Bank Chairman Alan Greenspan projecting Wednesday that the end of the recession is near, economic analysts in Maine can only guess as to when that may happen here. The economists, appointed by Gov. Angus King to the Consensus Economic Forecasting Committee, will meet today in Augusta to try to pinpoint just when Maine might start seeing an economic turnaround.

Job growth would be part of that recovery, said Laurie Lachance, the state’s economist, who is a member of the forecasting committee.

“The moment that the U.S. economy starts to grow, Maine’s industries will start to benefit,” Lachance said. “Three to six months? It may not even be that much.”

Yet those three to six months could be a period of uneasiness or difficulty for people who worry about whether they will lose their jobs, and for those individuals who actually do, she said.

“I personally think we have not seen the full extent of the layoffs,” Lachance said. “We feel the pain of the downturn more personally here in Maine. Obviously if you’re one of those [individuals], it hurts.”

Currently more than 17,000 people are collecting unemployment benefits, about 2,600 more people than this time last year, Luce said.

“That’s 2,600 more people drawing checks this month, this winter, this time of year,” he said.

As painful as the job losses are, more Mainers could have been in a similar predicament if the state had more high-technology businesses located within its borders, said Michael Donihue, an associate professor of economics at Colby College. Donihue also is a member of the economic forecasting commission.

The state’s unemployment rate remains lower than the national rate, at 4 percent in Maine compared with 5.4 percent nationally in November. And it has stayed at roughly 4 percent for about three months.

Going into this year, Donihue said he doesn’t expect unemployment numbers to go up. Job growth will be sluggish at about 1.5 percent to 2 percent, he said.

Donihue does not like to say that Maine is experiencing a recession. Instead, he said, he would prefer to call it “sluggish growth.”

“You just don’t hear a lot of scary stories in Maine like you do the rest of the country,” Donihue said. “I don’t hear a lot of complaints because of the recession. It’s all weather-related. For Maine, I’d be hesitant to even call it a recession. OK, I’m going to stick my neck out and say it. Maine is not in a recession.”

Many businesses, he said, are trying to stick it out during this sluggish period by cutting back on the number of hours worked instead of eliminating their positions altogether, Donihue said. And for those businesses that cut employees, they may have trouble refilling the positions when the economy starts to pick up again because many of the eligible workers are moving out of state, he said.

Even with the recent layoffs, Lachance said she wouldn’t use them as an “indication that we’re in an [economic] free-fall.” Cumulatively, the state lost 1,300 jobs last year, far below predictions by national analysts, who estimated 10,000 positions would be eliminated in Maine.

“So that’s good news,” Lachance said.

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