Worker incomes in N.B. significantly lower than incomes in Maine
An income gap of thousands of dollars per year makes a big difference for living standards and quality of life. And as long as growth rates in New Brunswick’s cities trail other nearby cities, this gap will continue to grow
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New Brunswick shares many similarities with Maine, its next-door neighbour, including similarly structured economies, shared history and cultural ties. Despite these similarities, there’s a large income gap between residents in Maine’s cities and cities in New Brunswick. Specifically, workers in Portland, Lewiston and Bangor enjoy substantially higher employment income than workers in Moncton, Fredericton and Saint John.
While much has been made of New Brunswick’s recent growth in population, residents of the province likely care more about economic performance and the effect on individuals and families. To measure the health of any labour market, economists often look at median employment income because it strips out government transfers and passive income from investments.
According to a recent study, after adjusting for currency differences, median employment income in Fredericton ($37,184), Saint John ($36,132) and Moncton ($35,711) trailed behind Portland ($49,876), Lewiston ($46,096) and Bangor ($39,712) in 2019 (the latest year of non-pandemic influenced data).
The lowest-earning New Brunswick city (Moncton) reported income $14,165 lower than the highest-earning Maine city (Portland). And New Brunswick’s three cities ranked in the lowest three positions for income among 20 large cities in New England and Atlantic Canada. In other words, workers in cities in Maine make more than workers in cities in New Brunswick.
Moreover, this gap generally grew during the 2010s.
From 2010 to 2019, Fredericton experienced compounded annual income growth (adjusted for inflation) of just 0.2 per cent per year while Saint John and Moncton fared only slightly better at 0.3 per cent. This outperforms only three of the 15 New England cities, and is far less than income growth in Lewiston (2.3 per cent), Bangor (1.7 per cent) and Portland (1.3 per cent).
Obviously, an income gap of thousands of dollars per year makes a big difference for living standards and quality of life. And as long as growth rates in New Brunswick’s cities trail other nearby cities, this gap will continue to grow.
New Brunswickers needn’t accept such a large gap in employment income. Catching up, through stronger government policies, should be a top priority for the province and municipalities.
Alex Whalen and Ben Eisen are economists at the Fraser Institute
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