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August 1, 2013

Report: Maine productivity a reflection of rural status

Maine's measure of productivity per worker is near the bottom nationally, which a recent study attributes to the makeup of the state's mostly rural economy.

The Maine Development Foundation's quarterly jobs economic report, released today, identifies causes for Maine's lagging productivity numbers, which it measures using the gross state product per worker.

Based on the percentage of adults with bachelor's degrees — 28.4% in Maine — and other demographic statistics, researchers projected Maine's per capita gross state product should be around $82,000. For 2011, however, the average gross state product per worker in the state was $64,556.

Based on an educational attainment ranking that puts Maine 20th in the nation, the study rules out a lack of college educated workers as the sole cause for Maine's lower productivity.

Rather, the study found that, except for agriculture, Maine's top industries pay wages below the national average. Those lower earnings, the study's authors wrote, are an indicator of lower productivity.

Generally, high-wage and highly productive jobs in knowledge-based management, professional, scientific and technical services industries are found around dense urban areas and not as much in rural states, like Maine.

As a result, the study recommends the state not chase industries typical to urban areas but rather focuses on existing rural industries through research and development and innovation in those areas. The study also suggests the state turn attention to developing complementary services, which enhance economic growth in urban areas in the region.

The full report, available here, was authored by UMaine School of Economics professor Todd Gabe through the Maine Development Foundation, a private, nonpartisan membership organization created by statute in 1978 to pursue sustainable, long-term economic growth for Maine.

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