Forging ahead despite Forbes

Maine’s certainly got its economic problems – I know, I’ve been writing about them for the last decade or so.

Our work force is graying. And there’s a skills gap between the jobs that are open and the skills our workers have. Many of our traditional industries have closed shop, or contracted. Paper mills employ fewer people than they once did; textile mills are non-existent.

In October, we had an unemployment rate of 7.3 percent, down slightly from September and from the same period a year ago, and lower than the national average of 9 percent. Still, we had some 50,700 people out of work.

Our sparse population of 1.3 million is spread across the vast geography of our state, necessitating a need for services that span great distances. And, too often, those unemployed aren’t anywhere near where there are new job openings, geographically speaking.

So, yeah, we’ve got problems.

We’ve got a lot of positive stories, too, that tend to get lost in the mix. Heck – in the last few weeks I’ve written about the rebound of the Mt. Abram ski center after a fire claimed the lodge, and the help given the business by the state, in terms of working through the right permits and regulations. A major international energy company, Statoil, is proposing the country’s first deepwater wind farm off the coast of Maine. It was revealed our workers’ comp rates would drop in 2012 by 3.8 percent — on top of the 3.2 percent decrease that was already announced. My colleague, Nok-Noi Ricker, wrote this weekend about this neat Brewer company that was turning old shipping containers into housing.

But it still chafes when Forbes ranks the state dead last in terms of “The Best States to do Business.”

We were last in 2010, too. Before that, in 2009, Maine had hit a high of 41, having been ranked 46, 48, and 46 in the previous three years that Forbes did the ranking.

Forbes used both data it uncovered as well as information from a variety of sources to compile the list, most heavily relying on Moody’s Economy.com, but also using reports from Pollina Corporate Real Estate, Pacific Research Institute, the Tax Foundation, Sperling’s Best Places, the Better Government Association the U.S. Census Bureau, the Small Business Administration, the FBI, and the U.S. Department of Education.

In this year’s story, Forbes notes that “Maine suffers from energy costs 31 percent above the national average, stagnant population growth and anemic forecasts when it comes to job and gross state product growth.”

Maine does have high energy costs, but they remain the lowest in New England. Also – much of the state is in the NORTH. It’s winter from late October through mid-April in parts of our state – so it would follow that our costs would be high, wouldn’t  it? (I also wonder if the report methodology just looks at business energy costs, or if it also considers housing energy costs, as we have the oldest housing stock in the nation).

Energy costs is a factor in the overall category of “Business Costs,” which Forbes said is the “most heavily weighted component in the Forbes Best States for Business” list.

Interestingly, Maine ranks 44th in terms of “Business Costs.” Who’s worse off than us? New Hampshire, New York, Connecticut, New Jersey, Hawaii and Massachusetts.

Massachusetts, by the way, was ranked 18th overall in the best list, and got a call-out in Forbes’ story for the “dynamic Boston economy which is strong in growth industries like healthcare, education and technology.”

“Business and living costs are among the highest in the country, but the state ranks first overall in quality of life and has one of the most educated labor forces in the U.S.,” Forbes reported.

Maine ranked 17th in terms of “quality of life,” which was the highest ranking our state got in any of the categories. I do think people want to live and work here – in fact, many people make a go of it by pursuing careers as small business people. They run one or two-person shops, carving out their own niche as a way to get by in a state that’s got a lot to offer, from the seas to the mountains to our close-knit communities.

Oh, by the way, that small business strength of Maine is apparently a detriment in the list.

Yup. One of the rankings – “Economic Climate” – has, among its metrics, thenumber of big public and private companies headquartered in the state.”

I can count on my two hands the number of those that are HQed here.

So that’s another ding.

Personally, I think ranking states like this is, in many ways, useless. We’re compared to states that operate with energy from the Tennessee Valley Authority. With states whose cities dwarf the entire population of our state. With those in warm climes. With those with abundant natural gas or oil reserves.

And we’re dinged for what some (me) would consider strengths – our diverse small business sector that’s a living symbol of our entrepreneurial spirit. And our wintry weather. (Sue me – I’m a winter guy.)

These reports are marketing tools. And they give our politicians something to pontificate on, and our journalists something to write about.

Meanwhile, people are still trying to make a living in Maine every day – at businesses that are still here, forging forward, trying to make an honest profit.

Despite our ranking in Forbes.

Maine’s Ranking in Forbes over the last six years

 2011

Overall Rank 50

Business Costs 44

Labor Supply 28

Regulatory Environment 45

Economic Climate 42

Growth Prospects 50

Quality of Life 17

Population 1.3M

 

2010

Overall Rank 50

Business Costs 47

Labor Supply 26

Regulatory Environment 48

Economic Climate 45

Growth Prospects 44

Quality of Life 16

Population 1.3M

Gross State Product $40B

 

2009

Overall Rank 41

Business Costs 44

Labor Supply 25

Regulatory Environment 32

Economic Climate 39

Growth Prospects 28

Quality of Life 19

Population 1.3M

GSP $40B

 

2008

Overall Rank 46

Business Costs 44

Labor Supply 26

Regulatory Environment 32

Economic Climate 39

Growth Prospects 43

Quality of Life 19

Population 1.3M

GSP $41B

 

2007

Overall Rank 48

Business Costs 43

Labor Supply 27

Regulatory Environment 46

Economic Climate 30

Growth Prospects 42

Quality of Life 16

Population 1.3M

GSP $42B

 

2006

Overall Rank 46

Business Costs 45

Labor Supply 26

Regulatory Environment 49

Economic Climate 21

Growth Prospects 48

Quality of Life 21

Population 1.3M

GSP $42B