Yahoo Finance What America can learn about reopening from the state of Maine
Happy Memorial Day weekend. And welcome to the most unusual, unofficial beginning of summer of your life.
This holiday weekend will be defined by the coronavirus, but it’s also a demarcation as all 50 states begin to reopen. Each governor faces their own unique challenges and trade-offs, but the restart process takes on a special urgency in areas with summer-oriented economies—from the Jersey shore to Lake Tahoe to the Great Lakes to the Utah parks to the Texas coast. (Americans typically spend about $100 billion on summer vacations each year. And that doesn’t take into account all of the indirect spend that is connected to domestic tourism.)
And as you might know from my recent writing, I’m living in one of those places, more precisely the coast of Maine, which morphs from freezing and nearly-empty in the winter, to less-freezing and somewhat populated in the summer.
Over 37 million out-of-staters visited Maine in 2019—this is ‘Vacationland’ after all—who spent some $6.5 billion, according to the Guardian. A few hearty souls come to ski, but most arrive during one of Maine’s two warmer seasons. (There’s July, August and winter.)
How bad’s the pain going to be? Who knows. Up and down the coast at iconic establishments like the Fat Boy Drive In Brunswick, Red’s Eats in Wiscasset and Moody’s Diner in Waldoboro, restaurant and business owners are trying to assess what the summer will be like.
“We all know that restaurants are clearly hammered,” says Jim Damicis, senior vice president at Camoin 310, a national economic development analysis firm that works with business and government in southern Maine. “You’ve got to make your money Memorial Day through August. You need crowds. A lobster pound restaurant or a brew pub has to be busy to make money. You can’t operate at 40%.”
And then there are summer camps, a big business for the state that generate some $200 million each year. Looks like some will open and some will not. The state released new guidelines for camps which say “activities that involve physical contact are discouraged, as are singing and yelling because they increase the spread of respiratory droplets.”
Good luck with that.
‘Focus has been on safety’
But Maine is hardly just a summertime fantasyland. This is a tough, rugged state with nagging problems, like opioid addiction and the oldest population in the country—20.6% is 65 or older—making it particularly vulnerable to this disease.
The state is tucked away up there. Maine produced $68 billion in goods and services last year, which ranks 43rd in terms of state GDP, below Delaware and above Rhode Island. With a population of 1.3 million—Maine’s biggest city, Portland, has only 66,000—per capita income comes out to about $50,000, well below the national average of $65,000. Some 95% of the people who live in Maine are white, making it one of, if not the least diverse states in the U.S.
Yes, blueberrying, lobstering, potato farming and L.L. Bean are big businesses, but paper and lumber are still sizable employers. Shipbuilding too, with the Bath Iron Works, (the BIW)—now a subsidiary of General Dynamics and employing 6,000—building destroyers, combat ships and landing craft. The Yard, as it’s sometimes called, a massive workplace along the Kennebec River in Bath, has stayed open as an essential business, and to date only two workers are known to have contracted COVID-19.
“Shutting down [wouldn’t have been] easy,” says BIW President Dirk Lesko, “But it’s certainly easier than to think through what changes you make and how to make sure it’s effective and how to communicate with people [when staying open].”
Are these new processes hurting the bottom line? “Definitely impactful, definitely impactful,” he says. “To be honest with you I don’t know the costs at this point. It sounds crazy but we have no choice but to do these things. The focus has been on safety.
“The cost of precautions draw down on efficiency. They’re effective and we’ve seen that, but they represent challenges,” says Lesko. “Typically our focus is to become more and more efficient. So when doing things that have the opposite effect, it’s counterintuitive.”
Like the rest of the U.S., there’s a paucity of testing in Maine. Lesko has workers in the yard doing temperature checks, but there’s no testing. If or when tests become available, the BIW would “certainly be interested in exploring.” Lesko says he wants to keep his shipbuilders safe, but after that there’s work to be done “We were looking to hire a thousand people this year,” he says. “We’re behind on ships here, and that’s not good for our customers.”
And what does Lesko think of the state reopening process?
“The governor has continued to err on the side of caution, to stem the spread,” he says. “Maine’s statistics compared to other states nationally, demonstrate that has worked.”
Despite all kinds of pressure, Maine Governor Janet Mills has been on the cautious side. A stay-at-home order is in effect until June 1, which could be extended. Many of Maine’s most popular beaches remain closed and out-of-state-visitors must quarantine for 14 days. “I’m not saying we’ll try to arrest anybody for violating the quarantine but there are many levels and layers for potential enforcement,” said the governor at a press conference on Monday. “We have to face the hard reality: As much as we would like to, we’re not going to be able to return to the way things used to be, the way things were. Not anytime soon. Instead, we all have to invent and reimagine ways of doing business, ways of doing activities.”
Having said that, Mills has been rolling out a multifaceted reopening plan. Carefully and deliberately. “The last thing we want to have happen is move too quickly and lose all the gains we have on the public health side,” says Maine's state economist Amanda Rector. “In terms of the economic impact that would be considerably detrimental. The phased, thoughtful reopening with all the testing capacity that goes along with that is what will hopefully make this successful.”
Naturally some in the state are peeved Mills isn't moving faster. GOP state legislator John DeVeau of Caribou, (nicknamed the most northeastern city In the United States) told protesters at a rally last Saturday he filed paperwork to impeach the governor over coronavirus-related restrictions, (though Republican leadership isn’t on board.) And former governor and Trump supporter, the bombastic Republican Paul LePage now says he will run against Mills in 2022.
On the other hand some say the governor is moving too fast. An article by award-winning Portland Press Herald reporter (and author of notable books “The Lobster Coast” and “American Nations”) Colin Woodard, points out the state is opening back up even as cases, albeit small in number, are still rising, (perhaps in part because doctors are testing more.) On Thursday, 71 new cases of COVID-19 were reported (a big outbreak was detected at a residential care facility that day.) The state’s cumulative total as of Friday was 1,948, according to the Maine Center for Disease Control. Seventy-six have died.
Still when you’re taking it from both sides, maybe you’re doing something right.
David Shaw, who founded two of Maine’s largest companies—both in animal health care—IDEXX, which is now making human COVID-19 tests, and Covetrus, thinks what Mills is doing make sense. “Luckily we have a governor who is resourceful, smart and analytical,” Shaw says. “She deals in an evidence-based world not beliefs. Science doesn’t care what you believe.”
“It’s almost like a parent saying ‘go have a good time kids, but be safe.’ It’s a combination of health and the economy,” says Damicis. “I ultimately believe there is no difference between the economy and health. If we head down a path that’s not safe, then the cost of shutting down and reopening again is going to be brutal.”
“We continue to walk this balance of public health and economic health,” says Heather Johnson, commissioner of the state's Department of Economic and Community Development. “Our priority is keeping Mainers safe. But economic health is an additional priority. Balance between the two and trying to find the mix is what we’re working on every day. We’re seeing Maine businesses trying to find their own solutions, and trying to facilitate that work as well.”
Dr. Nirav Shah, Director of the Maine CDC, notes that “should we see trends go in the wrong direction [we] would assess the implications and make decisions based on the most recent and thorough data. Earlier this week, we delayed reopening plans for nail salons and gyms because new information became available.”
But peaking of finding their own solutions, I should point out that the state’s colleges and universities are trying to find their way too, as I know well, being on the board of Bowdoin College in Brunswick. I can’t get into specifics, but I can tell you that figuring out a plan for the fall semester and beyond is incredibly complex, never mind time-consuming. The administration, faculty, students, parents, town officials and trustees have been burning up those Zoom lines.
‘As goes Maine, so goes the nation’
I have no doubt that Mainers (it’s okay to say Mainiacs)—quirky, iconoclastic and independent-minded as they are—will get much of this right. (Shaw told me when Mills said the state was introducing social distancing and people needed to stay six feet apart, a Mainer asked her, “Why so close?”)
Two hundred years of statehood—yes this is Maine’s bicentennial, and we should not forget the state was let into the Union to balance admitting Missouri as a slave state—has produced (just in the past five decades) an eclectic and outsized crop of prominent politicians including Margaret Chase Smith, Ed Muskie, Olympia Snow, George Mitchell and William Cohen. It’s fitting perhaps that the state has a Republican senator (Susan Collins, up for election this year), an independent senator (Angus King) and Mills, the Democratic governor.
Maine is the only state besides Nebraska which can split its electoral votes, as it did in 2016, awarding three to Hilary Clinton and one to Donald Trump. In 2017, Maine became the first (and only) state to enact ranked choice voting. (In the event there are more than two candidates, the voter must rank the candidates by order of preference. If no candidate receives a majority, the candidate with fewest votes is eliminated until a candidate has over 50% of the vote.)
So it will be interesting to watch what happens in Maine come November.
But for now, politicians, the private sector and some college presidents are looking to open Maine back up this Memorial Day and beyond. Keeping as much of the economy “semi-functional” as possible is critical,” says Rector, the state’s economist. “Going into this, Maine's economy was in a pretty good place at the end of 2019. That might help us coming out of it as well.”
Could be.
Mainers are stirring. The line in Rocky’s Hardware in Bath was so long (with social distancing mind you), that I turned around and walked out the door. Down the street at the Family Dollar store, masked customers filed in, seemingly oblivious to an osprey—fish clutched in talons—swooping to its nest atop a telephone pole in the parking lot.
Back in the 19th and early 20th centuries, political pundits used to say “As goes Maine, so goes the nation,” because the state was a bellwether for presidential elections. Then in 1936, when only Maine and Vermont voted for Alf Landon over Franklin Roosevelt, wags rightfully changed that chestnut to “As goes Maine, so goes Vermont.”
If Governor Mills gets things right, it might be time to bring back the original.
This article was featured in a Saturday edition of the Morning Brief on May 23, 2020. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe
Andy Serwer is editor-in-chief of Yahoo Finance. Follow him on Twitter: @serwer.
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