Betsy Chapman:
Jobs for Maine’s future

A legislative task force has scheduled public hearings around the state to obtain comment and possible solutions to the out-migration of young people and a lack of young families moving to Maine over the past decade.

As a mother of two recent college graduates living out of state, the answer is clear to me. In a word, jobs. Not just any job, but competitive career entry jobs in the area of expertise of the graduates. Not just a few jobs, but a sufficient quantity of entry-level jobs for the thousands of college graduates.

First, how many jobs do we need to create, and second, what policy changes will create them? Finally, do we have the political will to take the steps needed?

Regarding the first question, I looked to the work of the State of Maine Department of Labor. Their brochure “Careers in Maine for College Graduates” gives the employment outlook from now until 2010 for college graduates. They anticipate 3,214 new jobs each year for entry level, as well as experienced college graduates. The number of entry-level jobs created in Maine for college graduates each year is fewer than 3,214 jobs.

How many students graduate from Maine colleges and universities each year? By using an informal survey of colleges, I estimate that Maine colleges and universities graduate about 10,000 students per year. This is an incredible talent pool exported into the U.S. economy annually.

So, we have 10,000 new college graduates hitting the job market each year and only a fraction of that many job openings in Maine. It is clear that we are wasting our investment in education. We invest millions of dollars in public education only to close the door to our students when they graduate.

My suggestion is that we create 10,000 more jobs annually to allow more Maine college graduates to start their careers in Maine.

This is certainly a different way of thinking about job creation. Can we do it? Of course, as a wise father told me, we can have whatever we really want, but we can’t have everything we may want. We can create 10,000 jobs a year. However, we must remember it is a matter of priorities and trade offs.

Second, what policy changes can create this number of jobs? Tax reductions offer predictable job creation. We could identify a current program, like the Land for Maine’s Future, and use the money instead for job creation for our children. After all, aren’t people more important than things, particularly in a bad economy?

Governor Baldacci had campaigned on spending $100 million to buy more Maine land, and a recent Portland Press Herald article mentioned the figure of $150 million. What would happen if we invested that $150 million in the future of our young people and used it to create jobs? How many jobs could we create?

Using the Maine State Tax Analysis Modeling Program (Maine STAMP) from the Maine Public Policy Institute, I found we could create quite a few jobs. If we invested in a $150 million reduction in the income tax, we would create 7,049 jobs.

By reducing each personal income tax bracket by 15 percent, it would give people more disposable income to spend. You would expect the sales tax to go up, as well as the gas tax, motor vehicle tax and all the other taxes. Interestingly, revenue from the personal income tax would go down 15 percent, but revenue from all other taxes goes up, so the decrease in the State General Fund would only be 6.18 percent, or $150 million.

Creating 7,049 jobs is a good start, but it isn’t enough. We need to find another program to postpone and trade that money for more new jobs as well. If we cut the income tax 22 percent, or a total of $250 million, we would create a net of 10,448 new jobs.

By thinking about how many jobs our economy needs to create annually, it becomes imperative to prioritize needs and to make trade offs to achieve our number one goal: making a place in the State of Maine for young people and young families.

Let’s commit to a goal of offering a job to each member of our college graduate talent pool each year. Let’s commit to the goal of taking the final step in our education investment and implement policy changes that will allow our college graduates to stay in Maine and contribute their skill and knowledge to the Maine economy. Let’s offer them competitive jobs in the numbers needed for 10,000 young people each year.

Finally, do we have the political will to invest in jobs for Maine graduates? Do we care enough about creating jobs to defer some tax revenue for the sake of our children? Do we care enough to win over those threatened by the change to the status quo?

We can certainly continue our current policy, but we won’t create the numbers of jobs we need to be able to offer a job to each Maine college graduate, and the numbers of college-educated Maine residents will continue to decline.

As a community, we need to decide if we really want to make a place for Maine college graduates in our state. Do we want to reap the reward of the education investment we have made in Maine students or not? Do we really want to stop exporting our most talented young people? Do we want to end the brain drain? If we do, it is within our power.

If we are committed to this goal and we are willing to make necessary policy changes, every graduate of a Maine college or university could start his or her career and raise a family in Maine.

Betsy Chapman is a Financial Consultant and Board Chair of the Maine Public Policy Institute (www.maineinstitute.com), an independent, non-profit, non-partisan education and research institute devoted to promoting market solutions to the challenges affecting the people of Maine. It focuses on three areas: economic opportunity, education excellence, and health improvement. She resides in Hampden, Maine. Contact her at <BPChapman@adelphia.net>.

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