The Lisbon Reporter

WELCOME TO THE LISBON REPORTER. In an effort to keep our community informed of what is going on at local and Federal levels of government, we decided to create this on-line newspaper. It is our hope that this on-line newspaper will help you stay informed so that you can get involved and take action for the benefit of our ENTIRE community. Thank you for visiting and please check back frequently for information about what is happening in LISBON/LISBON FALLS, MAINE USA

Saturday, August 18, 2012

MHPC: "Demographic Winter" has severe economic consequences for Maine‏

"Demographic Winter" means

loss of 47,000 workers in 10 years

MHPC report details economic consequences of population decline

PORTLAND – In a report released today, “The Fiscal Costs of Maine’s ‘Demographic Winter’,” MHPC warns that Maine is staring into a population abyss that could result in the loss of 47,000 workers over the next 10 years.

Even worse, the Maine Department of Labor projects that Maine’s labor force will shrink by 101,000 workers over 20 years. With a declining population and a rapidly increasing number of people over 65, Maine is facing a “Demographic Winter” in which both government and businesses will experience significant losses of revenue.

For Maine’s businesses, “Demographic Winter” is akin to a slow-moving economic depression as the state shifts from population growth to population decline. Not only will businesses lose the prospects of new customers, they will also face the loss of existing customers.

At the same time, Maine’s state government will see a significant spike in Medicaid costs for those over 65. As government expenses soar for those over 65, the taxes paid by them will plummet, creating fewer resources to deal with higher demands.

What is causing “Demographic Winter?”

• Between 2000 and 2011, the number of people under 18 has declined 11%.

• The number of people over 65 has increased by 18% since 2000.

• Between 1991 and 2011, the number of deaths increased by 13 percent.

• The number of births in Maine has plunged since 1991.

“If income taxes are known to decline along with the size of Maine’s workforce, policymakers should proactively begin reducing Maine’s income tax now in order to spark new economic growth and jobs,” said J. Scott Moody, CEO of MHPC and author of the report. “A growing economy and job base will encourage the in-migration of young families and slow the onset of ‘Demographic Winter’.”

Encouraging strong in-migration will not solve Maine’s “Demographic Winter” problem by itself. But, as illustrated by neighboring New Hampshire, Moody noted that in-migration can buy some much-needed time to find longer-term solutions.

“Eliminating Maine’s income tax is an important first step in that process,” Moody said. “To do nothing condemns the majority of Maine to living under a never-ending economic depression.”

Download full report (PDF)

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