Working with one’s hands and how the underground economy is saving Maine’s families

Obtaining a college degree is rapidly approaching the point of greatly diminished return on investment.

I believe two years in a carefully chosen program at a Maine Technical College will guarantee a student an income for his or her working life.

In a piece in the New York Times entitled “The Case for Working With Your Hands” from his upcoming book, Matthew R Crawford, stated something that I have argued for years:

“…there are also systemic changes in the economy, arising from information technology, that have the surprising effect of making the manual trades — plumbing, electrical work, car repair — more attractive as careers. The Princeton economist Alan Blinder argues that the crucial distinction in the emerging labor market is not between those with more or less education, but between those whose services can be delivered over a wire and those who must do their work in person or on site. The latter will find their livelihoods more secure against outsourcing to distant countries. As Blinder puts it, “You can’t hammer a nail over the Internet.” Nor can the Indians fix your car. Because they are in India.”

Maine has seen its share of outsourcing. When Bank of America acquired MBNA, it transferred nearly 350 call center jobs out of Maine.

And as for those college graduates, the fact that a large percentage must move out of state to find gainful employment begs the question as to whether the State’s, and by extension, the tax payers’ return on investment would not be better served simply by shutting down all but one of the University of Maine System’s colleges and universities. The State would then take the massive saving and use a portion to provide full grants to Maine’s high school graduates to attend other colleges and universities.

We need to think bold and outside the box. The University of Maine System of colleges and universities is simply not working effectively for Maine tax payers.

Excluding much employment in Portland and in pockets of Augusta, Lewiston and Bangor, we are largely a state that works with its hands.

For example, tourism is our major industry, and a lot of that can go underground as a cash business. For example, parts of the tourism industry are paid in cash which can be placed off the books; the suppliers of and maintenance work for the tourism industry are sometimes paid in cash, as can be the repair workers, etc.

A relative of mine once derisively asked my wife why seemingly all Mainers had two jobs, perhaps a day job and a side job repairing cars, as a seamstress, as a handyman, roofer, gypsy taxi driver, etc. Although my wife politely explained, my answer today would be, “if you have to ask, then you …”

This is Maine’s underground economy. Sometimes it is just enough to buy a few cords of wood, sometimes it is enough to pay the mortgage on the house or more.

Certainly it is untaxed, but it is allowing Mainers to get through the worst times they have seen since the Great Depression, and perhaps that is why our unemployment rate last month was lower than the national average.

We, and many largely rural states like Maine, have long had striving underground economies that predate the establishment of the modern national income tax in 1913.

Perhaps in a diabolical way, that may be why, on Friday, the State Legislature passed a “revenue neutral” reduction in the State income tax by increasing the sales tax and extending it to previously untaxed services.

Given our Maine’s population of 1.3 million, Maine’s small business tax base, and Maine’s low average income, Maine simply cannot live without its underground economy; it provides those in it with a living standard that they would not have otherwise, a living standard typically gained by doing work that cannot be outsourced.

Peter B. Hayward

Social Justice – We need to strive to change what we cannot accept
for our all fellow human beings. We do not have the option of silence.

Copyright © 2009 Peter B. Hayward. All Rights Reserved

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