Maine economy is facing significant challenges, ranking 42nd out of 50 states and Washington D.C., making it the 10th lowest-performing state economy in the United States. This revelation comes from a recent study conducted by WalletHub, a personal finance website.
Key Findings:
Maine economic performance was assessed across various dimensions, shedding light on essential factors that contribute to its current economic standing. Let’s take a closer look at the findings:
Economic Activity:
- Annual change in GDP: 23rd
- Exports per capita: 43rd
- Startup activity: 31st
- Percentage of jobs in high-tech industries: 36th
Economic Health:
- Annual median household income: 49th
- Change in nonfarm payrolls: 44th
WalletHub’s study utilized 28 metrics, each graded on a 100-point scale, to calculate Maine’s weighted average across three key dimensions: economic activity, economic health, and innovation potential. These dimensions collectively contributed to Maine’s overall score and ranking.
Economic Activity Metrics: Maine’s economic activity was evaluated using indicators such as its annual change in gross domestic product (GDP), the presence of the fastest-growing firms, gross public debt as a percentage of GDP, exports per capita, and startup activity.
Economic Health Metrics: Economic health was assessed through criteria including unemployment and underemployment rates, median household income, the percentage of the population living in poverty, and government surplus or deficit per capita.
Innovation Potential Metrics: Innovation potential was gauged based on the state’s share of jobs in high-tech industries and STEM fields, independent inventor patents per 1,000 work-age population, research and development investment per total civilian population and as a share of GDP, and entrepreneurial activity.
Economic experts weighed in on WalletHub’s findings, offering insights into effective strategies for states to improve their economies. Key recommendations included attracting and retaining skilled workers to prevent “brain drain” and creating a business-friendly regulatory and investment climate.
Expert Opinions:
Kent Jones, a professor of economics at Babson College, emphasized the importance of promoting new business development and ensuring that regulations do not hinder growth.
Housing availability emerged as a critical factor in economic success, with Dr. Kenneth Kickham, a political science professor at the University of Central Oklahoma, noting that housing appears to be the most significant driver of decisions to relocate. Rising housing costs have made moving prohibitively expensive for many skilled workers.
Maine’s Housing Crisis:
Maine, ranking at the bottom in terms of median household income, is grappling with an ongoing affordable housing crisis. Harvard University data from the 2022 “State of the Nation’s Housing” report revealed that 41 percent of Maine tenants struggle to afford rent, with nearly 20 percent facing severe cost burdens due to housing expenses. That impacts the Maine economy.
According to the Maine State Housing Authority’s 2023 Outlook Report, the median single-family home sale price in Maine surged by 13 percent from 2021 to 2022, reaching $334,000. The report predicts that single-family home prices will continue to rise throughout 2023, primarily due to persistently low supply, especially in southern and coastal counties.
In response to these housing challenges, Governor Janet Mills has proposed allocating $30 million in funding for affordable housing programs. These programs include MaineHousing’s Rural Affordable Housing Rental Program and the Low-Income Housing Tax Credit Program. Which also impacts the Maine economy.
Conclusion:
Maine economy and it’s challenges are significant, with rankings placing it among the lowest-performing states in the U.S. Factors such as low median household income and a severe affordable housing crisis contribute to the state’s economic struggles. Addressing these issues and implementing strategies to boost economic activity, improve economic health, and foster in
This article was reimagined from: https://www.themainewire.com/2023/06/maine-has-the-10th-worst-state-economy-study-finds/
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