2023 has subtly been a time of some significant change. We are far enough past the pandemic that there’s a somewhat “return to normal,” but it’s not actually a return to normal at all — it’s a new normal. The new normal involves a shift in company culture, adjusted hours for staffing, new benefits, employee-driven incentives and hybrid work relationships. It’s a departure from the way business was done even a decade ago, and it seems that the businesses that are adapting more quickly to this changing landscape are finding the most success, while those resistant to the change are falling behind.
Here are a few questions I think are important for us to ask as we evaluate what lies next for all of Maine businesses.
What is real?
If we’re going to make decisions on policy, economic investments, leadership changes and more, we need to base those decisions on what is real and not what is perceived. An example of this comes from a recent Pew research study that came out about perceptions on the U.S. economy.
Essentially, since at least 2016, people’s perception on the strength of the U.S. economy has been largely tied to whether the president was someone they voted for. Literally, 85%-90% of Democrats and Republicans said they think the economy is doing well when their candidate is in office, and 85*-90% said it’s the worst economy of their lifetime when the opposition’s candidate is the president.
If we’re to make sound policy decisions, we need to look at numbers like rate of inflation rate versus other countries, job growth reports, unemployment numbers, wage reports and other metrics. We have the information and the comparative data to see what’s working and what isn’t. What we need is to accept the statistics as they are and overcome our own partisan biases.
This goes for more than just economic forecasts; it’s the same for topics like climate change, tax policy and more. To take just one example, the ocean waters in the Florida Keys registered at 100.1 degrees Fahrenheit on Monday — the highest ever. That’s not partisan, that’s a fact. According to a paper released by the World Meteorological Organization on Jan. 12, 2023, the eight hottest years worldwide on record are the last eight years (2015-2022).
We need to look at the facts and agree that climate change is happening to our planet, and only then can we start to create policies to fix it. Ignoring the facts of scientists or, worse, promoting the view of a rogue scientist who disagrees with 100 other experts in the field but happens to push the false narrative you prefer hurts all of us.
What the Maine FMLA broadly tells us
One of the hotly debated topics from this session of the Maine Legislature was a paid family medical leave law, which will go into effect once the fund is solvent, likely sometime in 2025-2026. The fund will grow from contributions made from Maine employers and employees through their payroll. Beyond the cost of the new legislation and what it can be used for, the passing of the legislation tells us a few more things very broadly.
First off, we’re no longer in an employer-driven economy; the economy is now employee-driven. With the staffing shortages, wage increases and competitive attraction and retention efforts happening throughout the state (and country), employees have more opportunity to get the support they desire as the employers are providing more incentives to meet that desire. The pool of replacement candidates is shallower in sheer numbers than at almost any time in the history of the country (historically low Black unemployment rate; nearly historically low overall unemployment rate). If employees can get better support somewhere else or if there is a company culture that doesn’t make them feel valued, they’ll cross the street and work for someone else. Many people hate this, but let’s be honest, it’s the employees using the same tenets of capitalism that many employers started their businesses with.
Secondly, some of the bills and concept drafts being submitted through the Maine Legislature mirror bills and laws that were passed in Massachusetts, California and other states. This brings up the question, what can we do to convene groups to look at what bills are being passed in other states now in order to get an early handle on how it could affect Maine businesses? According to a quick Google search, some of the top 2023 forecasted workplace trends include: four-day work weeks, expansion of benefits to part-time workers, DEI (diversity, equity and inclusion) policies, hybrid work schedules and more. Will we get ahead of any of these topics with proactive insights on how this could help or hurt our businesses? Or will we wait until a bill gets written before the business community reactively responds to how it will affect their business model?
Are some traditional metrics still relevant?
As I re-read the first section of this column, I have to wonder if the unemployment rate is still an effective metric. With the demographics of retiring baby boomers leaving the workforce, we were always going to have a smaller pool of potential job seekers between 2015 and 2030. You can’t continue to have new business growth without population growth — eventually you hit an impasse.
Is the unemployment rate an effective indicator with the demographic changes? In July 2018, the unemployment rate went below 4% for the first time in nearly two decades (the last time previous to that was briefly in 2000 — before that it was during the Vietnam War, 1969). The unemployment rate stayed under 4% until the pandemic, and since the economic recovery post-pandemic, it has stayed below 4% ever snice. If you take out the pandemic, this is the longest sustained period of under 4% employment in a non-war time in a century. Which leads to the question, do the demographics make this metric irrelevant? Perhaps it’s not that people don’t want to work; perhaps we literally don’t have the people to work.
Cory King is executive director of the Bath-Brunswick Regional Chamber of Commerce.
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