One of the puzzling mysteries of the Maine economy so far this century is our sluggish employment growth.

Over the late 1990s (1997 to 2000), total non-farm employment in Maine grew 8.1 percent, slightly better than the U.S. growth of 7.3 percent.

Over the next three years, the period of the high-tech bust between 2000 and 2003, Maine again fared better than the nation as a whole. Total employment in the U.S. fell 1.4 percent while in Maine it actually grew 0.3 percent. We seem to have enjoyed the boom and not suffered the bust.

But since 2003, it has been a different story.

Between 2003 and 2007, employment in the U.S. grew 5.8 percent while employment in Maine grew only 1.3 percent.

In 2008, the first year of the recession, we both got clobbered. Employment in the U.S. dropped 0.4 percent, and in Maine it dropped 0.3 percent.

If we are to participate more fully in whatever economic recovery appears to be starting now than we did in the last "recovery," we better figure out what happened in the period of 2004 to 2007.

One way of attempting to answer this question is to dig deeper into the employment numbers, to examine not just how many people are working but who's hiring and who's firing; to look at how many jobs come (or go) for existing businesses and how many for new businesses.

This is possible by delving into what the Department of Labor calls its Employment Dynamics system. And it reveals some interesting facts.

The first is that the reason for Maine's sluggish employment growth has not been an absence of new businesses.

In each of the distinct periods I've cited as having different job growth patterns – 1997 to 2000; 2001 to 2003; and 2004 to 2007 – the quarterly job growth associated with new firms in Maine has been virtually identical at 33,000 jobs.

The job growth associated with existing companies, in contrast, has fallen in each period.

From 1997 to 2000, it averaged about 5,700 jobs per quarter. From 2001 to 2003, it averaged about 4,100 jobs per quarter. And from 2004 to 2007, the increase dropped to about 3,900 jobs per quarter.

In short, employment growth at existing companies has been increasingly sluggish while job growth attributable to new companies has been relatively constant through both ups and downs of the business cycle.

The second interesting fact evident in looking at Maine's labor market over time is that it is increasingly less dynamic. There is increasingly less turnover, less churn, less movement from job to job.

For the period of 1997 to 2000, new hires averaged about 96,000 per quarter, and separations (people leaving jobs, voluntarily or involuntarily) averaged about 117,000 per quarter. The average job turnover rate was 10.5 percent.

In the period of 2001 to 2003, new hires dropped slightly to about 94,500 per quarter, separations stayed the same at about 117,000 per quarter and the overall turnover rate fell to 9.6 percent.

Then in the period of 2004 to 2007 – the period of strongest national job growth – Maine's new hires dropped to about 86,500 per quarter, separations dropped to about 108,000 per quarter and the turnover rate dropped to 9.1 percent.

In other words, just when the national job market was picking up steam, Maine's was dozing off – less of everything. Very slightly less new business formation, and substantially less job leaving and new hiring. Maine seemed to hunker down and hold on tight to what it had.

This is precisely the dynamic – or absence of dynamism – that we cannot afford in the recovery that is beginning. We need to increase the churn in the labor market – increase new business formation and hiring, and, yes, increase firing and job leaving.

A dynamic labor market is a sign of a dynamic economy. Lots of economic births and deaths is better than lots of hanging with not much change, except slow overall job loss.

Charles Lawton is senior economist for Planning Decisions, a public policy research firm. He can be reached at:

clawton@maine.rr.com