Declining Economic Opportunity and a Shrinking Safety Net: Consequences for Maine

(two-minute read)

Policy in Brief:

In this commentary, Ryan M. LaRochelle argues that the (pre-COVID-19) positive economic indicators for Maine and the nation ignore that economic opportunity has declined significantly over the past several decades and that the social safety net that many Mainers rely on has been under assault. Both of these forces, he argues, have significant consequences for low-income residents in Maine.

Declining Economic Opportunity:

Across the nation and in Maine, economic insecurity persists.

  1. 40 percent of adults nationwide would not be able to cover a $400 emergency expense.
  2. 20 percent of adults are unable to pay off their monthly bills in full.
  3. 25 percent of adults skipped necessary medical care in 2017 because they could not afford the costs.
  4. The percentage of Americans who experience a significant financial loss without adequate financial buffers has increased steadily since the mid-1980s.
  5. In Maine, 20 percent of residents experienced such a loss in 2010.

Inequality has worsened alongside persistent insecurity. At the national level, the gap between the richest and the poorest households is now the largest it has been in the past 50 years.

  1. In Maine the highest-earning 5 percent of households captured more than 20 percent of all Maine income in 2018.
  2. Race exacerbates this inequality in Maine. White workers make more than men and women of color, this includes the college-educated populace as well.

These forces coalesce to reduce the prospect of social mobility in Maine.

  1. In Maine, absolute mobility declined by 43 percent over the past half century.
  2. Ninety-three percent of Mainers born in 1940 would go on to earn more than their parents.
  3. For Mainers born in 1980, only half of them can expect to earn more than their parents.

Shrinking Safety Net:

For those who continue to struggle, the safety net that often helps citizens recover and rebound during moments of economic disruption has become less generous over time.

  • The USDA proposed a series of administrative rules that will significantly limit low-income individuals’ access to food by:
    • Expanding work requirements;
    • Eliminating the broad-based categorical eligibility;
    • Limiting a state’s ability to take a household’s utility costs into account.
  • Further, the federal government has sought to limit Medicaid expenditures through:
    • Work requirements;
    • Decreasing state flexibility.
  • Changes to these social programs will have significant consequences to low-income Mainers. Nearly 30 percent of residents in Washington, Aroostook, Somerset, and Piscataquis Counties are enrolled in MaineCare.

Conclusions:

With strain to the federal social safety net, Maine could enact state-level social programs that help Mainers meet basic needs and provide new opportunities. These would be critical to the state’s long-term stability and growth. Policy options include:

  • Wage increases;
  • Addressing unstable work schedules;
  • Early-intervention and education programs;
  • Overtime-eligibility laws;
  • Paid family-leave programs;
  • Paid medical-leave programs.

The evidence is clear that safety net programs are pathways out of poverty. It is time to design bold and creative solutions to address the persistent decline in economic opportunity in Maine.

Dig Deeper:

LaRochelle, Ryan M. “Declining Economic Opportunity and a Shrinking Safety Net: Consequences for Maine.” Maine Policy Review 29.1 (2020) : 29-31.