October 26, 2011

GEORGE SMITH: Maine needs well-designed plan to help small businesses


Gov. Paul LePage needs to hear from many small business owners and entrepreneurs in his three by-invitation-only conferences to gather ideas that will boost Maine’s sagging economy.

Big businesses won’t deliver prosperity, although each announcement — from a reopened paper mill to a new phone center — gets mega-attention from the media. While we chase the big guys, we often trample the small guys that generate almost all of Maine’s job growth.

LePage doesn’t need to hear from Mardens. He needs to find the next Mickey Marden.

I’ve paid attention over the last few months to columns and news stories by the state’s top economists. Chuck Lawton, senior economist for Planning Decisions, a public policy research firm; J. Scott Moody, chief economist for the Maine Heritage Policy Center; Charles Colgan, former state economist now at the University of Southern Maine’s Muskie Institute of Public Service, and Laurie Lachance, former state economist and now president of the Maine Development Foundation, have weighed in with good insights into our economic problems.

Here are a few things that jumped out at me from their reports.

The rural rim counties are hurting the worst, shedding people and jobs. “The rural economy is stagnant or shrinking and the urban areas are growing,” said Colgan. Aroostook County lost 2,068 residents over the last decade while Washington County lost 1,085.

Lawton reported in the Oct. 16 Sunday newspaper that the rim counties, running from Oxford in the west up to Aroostook in the north and over to Washington in the east, suffered a decline of almost 1,000 jobs since 1990, while the central counties enjoyed an increase in jobs of 11 percent and the southern counties an increase of more than 22 percent. Since 2001 commercial jobs in the rim counties have decreased every year but one.

The rim counties’ share of employment dropped from 19 percent to 16 percent, and their share of earnings decreased from 17 percent to 14 percent.

Even those who work there aren’t doing well. In 2010, the average annual earnings for a worker in the rim counties was $34,279, in the central counties $40,433, and in the southern counties $42,669.

A fascinating column by Moody last July reported that the capital income (interest, dividends and capital gains) of Mainers in 2002 was 86 percent of the national average, but just 64 percent in 2008.

Moody says we need a strategy that keeps and invests capital here in Maine, and offers specific ideas such as allowing businesses to immediately expense all capital purchases.

Lawton believes that connecting rural Maine to the digital world will be critical to any economic turnaround there. Colgan and Lachance have repeatedly offered specific proposals to improve our economy.

Now, it’s time for our job creators, innovators, entrepreneurs and small business owners to be heard — people like Dick McWilliams of Harbor Farm.

McWilliams emailed me at the end of September to comment on my column about the marketing of tourism. He has owned a mail and online order/retail store on Little Deer Isle for 25 years. I’ll let him tell his own story.

“The state of Maine is in the dark ages as far as businesses go. My company, which has traditionally brought in a million dollars from other states and has been written about widely for its interesting products, has been drastically affected by the recession; and yet, we have not been able to get any help at all from the state of Maine or the Small Business Administration.

“Maine has long winters (high heating costs), is geographically remote (higher freight expenses), and has a low population density (limited work force).”

Dick reports that local banks, “are posting record profits (but) have become even more conservative in their lending practices than they were before the recession, which is really saying something).”

“I started this year with six full-time employees — by March I had laid off all but one of them. These were people who worked side by side with me building our company for 25 years, so it was hard emotionally.

“As a result, several of them have had to find one, two or three other jobs, just to pay their bills. They are all exhausted.

“Over the years, I have heard an enormous amount of talk about helping businesses, but I have never seen a thoughtfully designed, well-executed program to do it.”

I guess that’s what the governor is fishing for now. Let’s hope he catches a boatload of suggestions from Maine’s small business community.



George Smith is a writer and TV talk show host. He can be reached at 34 Blake Hill Road, Mount Vernon 04352, or georgesmith maine@gmail.com. Read more of Smith’s writings at www.georgesmithmaine.com.

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