Maine Needs 15,000 More Workers for the 2021 Tourism Season
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Few industries were more impacted by the COVID-19 pandemic in 2020 than the tourism industry. Travel, in particular, along with dining out, entertainment, and other spending for leisure and amusement, came to nearly a complete halt for much of the year as people were suddenly confined to a tight radius around their homes due to both personal wariness and government mandates.
Although COVID-19 remains a very real and pressing issue, as more and more people get vaccinated while others simply decide (for better or worse) that they’ve had enough of tight radiuses and government restrictions, the tourism industry nationwide is set for a major rebound. Nowhere is the potential greater than in Maine, which is perceived as a particularly safe place with lower numbers of COVID cases and (comparatively speaking) high vaccination rates. But as tourists flock to Vacationland, there is just one problem: there are not enough workers to respond to them.
The Season Ahead
Nationwide there is significant pent-up demand for travel after a year of restrictions. And many consumers have more cash than usual thanks in part to government stimulus programs and an economy that, for many, did not dip as much as was initially feared at the outset of COVID-19. Bookings for everything from campgrounds to hotels to rental cars are starting to surge, especially relative to the understandably dismal 2020 season.
Where are people choosing to go? A recent study by Travel technology company Koddi found a particularly interesting connection:
In the U.S., we see a sustained correlation between regions that have comparatively high numbers of vaccinations per 100 people compared to the recovery of the travel intent and travel demand for those areas.
In other words, tourists are going to flock to areas that have high vaccination rates and that are perceived as safe - places like Maine, which currently boasts the highest percentage of residents who are fully vaccinated of any state in the country, trailing only the small island of Pulau among all U.S. jurisdictions.
There is just one problem for Maine: as hotel managers, restaurant owners, and others in the tourism field frantically plan for the season ahead, there are just not enough workers.
Prior to the pandemic, there were roughly 70,000 people in Maine working in the leisure/hospitality industry on a seasonally adjusted basis. The chart below shows the obvious drop in this category of employment during the first quarter of 2020 when COVID first hit.
The Bureau of Labor Statistics estimates that approximately 57,000 people in Maine were employed in the tourism sector on a seasonally adjusted basis as of March 2021, which is the most recent month for which data are available. Although employment in the tourism industry managed to bounce back throughout the last half of 2020, this 57,000 figure still lags below what would be expected at this point in the season. And if Maine sees even an average tourism season in 2021, there will not be enough workers. Plus this figure does not even include workers in the retail and transportation sectors, which are categorized separately and which also show numbers of seasonally adjusted workers below what would be expected at this point in the year. Currently Maine is at least 10,000 workers short in the leisure and hospitality sector and 5,000-10,000 workers short in the retail and transportation sectors.
Where are the workers?
Maine faced a worker shortage even before the pandemic began. The chart below shows the Labor Force Participation Rate in Maine over the last ten years. What this figure illustrates is the percentage of the working-age population that is either working or actively looking for work. The percentage has dropped from 64.9% at the beginning of 2011 to 60.0% today.
There are plenty of reasons to speculate about why the Labor Force Participation Rate in Maine has declined. Maine has an aging population and many people cycle out of the workforce as they age. Others may have lost their jobs in some of Maine’s traditional industries like paper marking and textiles and were not able to find new jobs, eventually stopping to look altogether.
In the last year, however, COVID hesitancy among both workers and employers is, of course, a key variable: for people who were working at a restaurant, bar, or hotel in the past but who have other options financially or vocationally, why risk contracting the virus tending to demanding and possibly unvaccinated tourists?
Unemployment benefits, too, are unquestionably part of the calculus for many people. Congress updated the rules for unemployment and President Biden signed them into law in March, which extended enhanced unemployment benefits into September 2021 including an additional $300/week. According to Zip Recruiter, for Maine specifically:
The maximum unemployment benefit available to individuals in Maine is $745 a week, or about $19 per hour, through March 14, 2021. After that, the maximum weekly benefit for individuals is $445 a week, or about $11 per hour.
While $445 a week is still not enough to live on, the fact that unemployment benefits may pay some workers almost as much or actually as much as they would be earning if they were working makes it unsurprising that some people will decide to simply stay home, which you can see has played itself out in the Labor Force Participation Chart above.
Compounding Maine’s challenges this year is the inability of some international workers to travel to the United States due to COVID-19 travel restrictions. Traditional touristy areas of Maine such as Bar Harbor, for example, typically welcome hundreds if not thousands of workers each season from Jamaica, Haiti, and the rest of the Caribbean and beyond. Many of these workers will not be able to come in 2021.
What can be done?
Undoubtedly with COVID-19 still impacting the way we all live, play, and do business, the 2021 tourism season is going to look different than usual. But with such robust expected interest in visiting Maine paired with a significant labor shortage, the season could also be chaotic: longer waits at restaurants, the inability to access certain activities, more limited hotel capacity from a lack of staff, and other challenges are to be expected.
Businesses will have to adapt. This includes changing the way services are provided. Expect more takeout-only from restaurants who simply do not have the staff to wait and clean tables, for example. While not specifically a tourist spot, the Chipotle in Bangor still has not opened its dining room and, in fact, recently closed down its in-person ordering line and has temporarily shortened their hours for takeout to just 12:00 pm - 5:30 pm. Why? A lack of workers, I was told by a friend who works there.
Many business owners will also have to address wages. At the root of this issue is an economic problem in which the supply of labor is too low to meet the demand, which would suggest the price for labor must rise. In plain English, if businesses can’t find workers they will need to offer higher pay and greater benefits to attract them. This is easier said than done, however, as many businesses are not operating at high enough profitability to remain viable with increases in labor costs. Small businesses, in particular, may not have the ability to adjust prices enough to bring in more revenue without losing customers as result of those very same high prices. It is a serious dilemma that hundreds of Maine business owners are grappling with as the season begins.
Lastly, there may be some creative things that the federal or state government can do to bolster employment rolls. President Biden has been working to increase the number of foreign workers who can travel to the United States with H2-B seasonal visas, for example.
I also think the state government in Maine could get creative with its COVID-relief funds and develop an incentive system to get people back to work. There will always be concerns about the health and wellness of workers as long as COVID lasts, but for those individuals who don’t want to sacrifice the extra $300/week in unemployment benefits but who still want to work, maybe a portion of the state’s COVID-relief money could go to incentivizing people to get back into the workforce.
Matthew Yglesias, who writes the Substack Newsletter Slow Boring, posed an idea of a “re-employment bonus,” in a recent article:
Congress should pass a law saying that if you have X weeks of Federal Pandemic Unemployment Compensation [FPUC] eligibility left and you get a job, then you get X times $300 from Uncle Sam as a re-employment bonus.
People who can’t find work will still get their FPUC money. But people who can find work won’t be financially penalized for saying yes to a job sooner rather than later. And you don’t need to think of it exclusively in incentive terms either. The re-employment bonus can help you address the barriers (child care, etc.) to work that may have arisen over the past year.
This is a terrific idea and Maine’s Congressional delegation should take note. People who want to work especially those who are fully vaccinated and are in a position with childcare and other factors to be able to do so should now be reentering the workforce. Maine needs them, and there are, of course, countless professional and personal benefits to working rather than staying home collecting unemployment.
What Comes Next?
Everyone will have to be patient this summer and fall, including both tourists and workers in the industry. That goes for other Mainers as well, who must recognize that tourism is one of the pillars of the state’s economy and we must all be a little bit more gracious and kinds this summer towards our guests and with one another even if the line at Ben & Bill’s or the trolley to Perkins Cove are moving more slowly than we’d like.
It may be a challenging season, but the saving grace of it all is that it will be challenging at least in part because so many people want to spend time in Maine, which ultimately is a good thing for our state.
Ben Sprague lives and works in Bangor, Maine as a V.P./Commercial Lending Officer for Damariscotta-based First National Bank. He can be reached at ben.sprague@thefirst.com or bsprague1@gmail.com. Follow Ben on Twitter, Facebook, or Instagram and subscribe to his weekly newsletter by clicking below.
