The Maine Effect, a Financial Perspective of an Escaping Mainer

For the past 16 years we have lived in the beautiful state of Maine. I have worked in the conservation field and my spouse worked for the federal government. At our peak, we broke the $100,000 dollar mark in a town whose capita income was $16,000yr, and felt we were doing very well. We bought a modest fixer-upper home, two cars, and lived the American dream. We had snowmobiles, ATVs, boats and enjoyed our lives. We also were in terrible debt. Credit cards were high, only getting paid off at tax time. Expenses like firewood and oil hurt our budget so badly that we started an accounting program to analyze where each and every dime went. What we found was troubling.

We found that for every dollar made 35–40% went out in taxes. These taxes included paying for schools, roads, sales tax, state and federal income tax, excise tax on our vehicles, and property taxes. Living in Maine was a beautiful state and the seasons made the state one of great contrasts. One major contrast was the beautiful winters of cold snow and Nor’Easters. The winters however took a drastic toll on our finances as wood, oil and gas were not free. Electricity for the dark winter was not cheap nor was the other hidden costs such as the severe wear and tear on our vehicles. Apparently the moist winters combined with a new salt formulation was a perfect environment for car-eating rust. The weather was also difficult for health and, while we were fortunate to have employer supplied healthcare, many were not, and it too came at a far too steep price.

Maine is well known for a lack of well paying jobs. So well known in fact, that politicians campaign on the platform of job creation and stopping the drain of young professionals from the state. The state’s median age has increased so much that the medical field has grown exponentially with many new and upgraded medical facilities statewide. While we did not work in the medical fields, we were very lucky to have an income. While my wife’s was very stable, my employment hinged on finding niche positions which were not filled with non-profit volunteers. Given unstable work situation I, like many Mainers, became a jack-of-all-trades. During my time in the state, I worked for the county as a deputy sheriff, cut wood, mowed lawns, did carpentry, painting, photography, guiding, care-taking, assistant harbormaster, “professional student”, adjunct professor, jewelry maker, park ranger, Americorp volunteer, and state environmental consultant just to make ends meet. Steady jobs (while poorly paid) were distant and, given the weather as well as the required commuting distance, getting one would cost more in wear and tear on the vehicles than would be made. Life in Maine as a resident was hard and adaptability was, and is, a key trait necessary for scratching out survival in the state.

One thing that was a constant reality of our time in the state were the constant complaints by friends and family about how expensive things were. From electronics to vehicles, everything was expensive. I have to ask however, was it expensive compared to all areas nationwide, statewide or was it simply expensive to those of us in Maine? Those of us who shouldered the burdens of high rents, low paying jobs, excessive heating bills, excessive taxes, those who had 40% of our income go before we even put it towards bills all suffered from what I call the Maine Effect.

While common in many states, and a well known economic issue nationwide, Maine really sticks out given its proximity to the wealthy southern New England states and the vast spread of wealth in such a short distance from the coast to the inland communities. Upon our decision to leave Maine to look for a better life, we first did a lot of research on different states from Maryland, Minnesota, Alaska to Oregon. What we found was that Maine had, on average, a higher cost of living than many states yet also had far less employment opportunities than our target states. Another clear indicator of this would be the distribution of votes in our most recent election. The southern, more affluent, regions voted blue while the northern struggling regions (where we lived) voted red (Some call this the Volvo Line ). While it’s beyond the scope of this post to highlight the reasons of Trump voters, they are well publicized. In overview, they value hard work and keeping more money in their wallets. In any case, the Maine Effect becomes real when those from more affluent regions come and feel the prices are reasonable and spend many dollars in our state. An interesting article by the NY Times discussing this phenomenon hits home very well as it shows how the affluent can simply ignore the problems of the resident Mainer and simply come into a community and enjoy its inexpensive (by their standards) quaintness.

Maine, in general, needs better paying jobs. It needs more jobs. Existing employment must expand to allow telecommuting for bad weather. Taxes need to be lowered. Tax breaks must be expanded for lower income workers and higher taxes for the wealthy and even higher for the seasonally wealthy. There should be more programs in place to get people back to work, including a comprehensive apprenticeship program to anyone willing, not just displaced workers who wish to learn a new trade.

For us, Maine has given us many valuable lessons on how to make a living there. We tried many things but nothing paid enough dividends to be sustainable. We are not the first and we will not be the last to come to this conclusion. I love the state, love many of the people who reside there The climate, salt air and northern wind is in my blood and I will always be a Mainer. I can only pray that someday I can return and retire there. Residing there now, during my prime working age, and saving anything for retirement is almost impossible. The Maine Effect is real, only a drastic change can bring the state to the mainstream and in line with current national financial levels.