Chapter 4: Canaan's Local Economy

The Important Stuff -- Household Incomes:

For nearly everyone, our paychecks have gone up over the past ten years. So has inflation, along with housing prices, taxes, and the cost of nearly everything. The question is, are we better off than we used to be? For the purpose of the comprehensive plan, income data can provide the answers to this, and a few more questions. The first and foremost is, whether we can afford to pay for town services. Another question might be, are the new residents in a significantly different income class than they have been. Another might be, are the higher incomes only because more of us are working?

The table below shows the growth in per capita and household income over the past twenty years, in Canaan and neighboring communities. "Per capita income" is the total income of the town divided by the total number of residents; "household income" is the total divided by the number of households. They use the same numbers, but they grow at a different rate, because there are fewer people in households now than years ago.

1979 1989 1999

Community: HHI Per Cap. HHI Per Cap. HHI Per Cap.

Canaan $10,705 $4,169 $26,354 $10,260 $29,397 $13,870

Cornville $12,454 $4,197 $25,625 $11,579 $38,015 $16,184

Pittsfield $13,594 $5,008 $22,787 $10,738 $32,868 $16,065

Clinton $14,576 $5,556 $29,667 $11,694 $32,419 $15,052

Skowhegan $11,208 $5,401 $22,165 $11,332 $28,390 $15,543

Somerset Co. $11,850 $4,842 $22,829 $10,471 $30,731 $15,474

Source: U.S. Census

This table demonstrates that Canaan has gone from the bottom of the pile in terms of incomes, since 1979 to almost the leader in the area in 1989. . Judging from the ten-year change, there has been a dramatic upswing, in either the income levels of town residents, or the incomes of new residents. During this period (1980-1990), the total inflation, as measured by the Consumer Price Index, was 59.8 percent. So income growth is about 80 percent ahead of inflation.

During the period 1989 -1999 , surrounding communities saw their incomes rise much higher as compared to Canaan. The exception was Skowhegan which has a lower income level. This trend can also be seen in other areas as higher income households depart urban areas for rural communities.

These figures do not measure the average income per worker, but that can be figured approximately. (There are a few holes in this calculation, mainly the assumption that only workers receive income.) In 1979, there was an aggregate of $4,956,941 income, and 427 people employed, for an average of $11,600 per worker. In 1989, there was $16,785,360, and 706 workers, an average of $23,775 per worker. That is a 104 percent increase, which is less than the rate of increase of incomes generally. What does that mean? It could mean that the added income is coming from well-to-do retired persons moving into town.

The box at right shows relevant comparisons. It shows that household income, on average, is well ahead of housing prices, and about double the average property tax in Canaan (this could be misleading: the mill rate in 1980 was up to 15.33 -- full value.)

The Canaan Labor Force:

The growth in the Canaan labor force over the past twenty y ears has been substantial. In 1980, the labor force consisted of 427 people; in 1990, it was 706 and in 2000 it was 992. That is a growth of 132 percent, an enormous jump beyond the overall population growth of "only" 70 percent. This is highly unusual. In the past twenty years, more and more families have had to get by on two incomes instead of one, which means a greater percentage of the population in the workforce. But Canaan seems to be adding workers at a rate almost twice that of population growth.

The Census figures should answer the initial question: where are these added workers coming from? The short answer is: more women working. While the male labor force increased by 147 between 1980 and 1990, and in the female labor force increased by 165. Between 1990 and 2000 the male labor force increased by 95 persons and the female labor force increased by 112 persons Females now make up a much more substantial part of the work force, closer to the regional average.

Change in Composition of Canaan labor Force 1980-2000 Source: Census 1980-2000

Based on experience in other areas, the female labor force will continue to increase to about 65 percent before it levels off. In addition, the figures show us that we have far more young people entering working age than older people retiring. The combination of factors means that there will still be a growing demand for jobs for quite some time to come.

Employment Trends:

The table below shows changes that have occurred during the last twenty years in the types of employment that people are working in. . The trends are similar. There has been a drop in the percentage of jobs in manufacturing, and an increase in service- and trade-related jobs. In Canaan, some of the changes are dramatic: Manufacturing has ten percent less of the workers in 2000 than twenty years prior, and services has 15 percent more. (Within "services," health and education are the growth industry, from 62 local jobs in 1980, to 166 in 2000, an increase of 167%..

For planning purposes, this information is useful, because we need to know where to concentrate our efforts. Encouraging new manufacturing would be swimming against the tide -- a difficult task. It might be easier to create or cater to an industry in the health service field. Farm jobs, by the way, increased from 31 to 50.

The overall unemployment rate is a concern as well. In 1980, the census-reported unemployment rate was 10.8. In 1990, it had not improved much, to 10.1. The rate was up to 11.7 in 1993, and down to 10.9 in 1994 (Maine Department of Labor data). That rate ranks 10th highest among the 27 towns in Somerset County, but is just about the county average of 10.7 for the year. (Skowhegan had an 11.1 percent rate in 1993.) It is, however, going in the opposite direction from the county. From 1993 to 1994, county unemployment rose by 1.4 points.

Casual observation would seem to indicate that there are a lot more people in town doing "their own thing" with one-person operations and such. But at least according to the census, 60 people identified themselves as "self-employed" in 1980, in 1990 self-employed numbered 69 and in 2000 the number of self-employed persons was 90.

Canaan Employment by Industry 1980-2000 Source: Census 1980-2000

Commuting Patterns:

Where people work is nearly as important as how they work. Knowing how many work in town, and how many commute to the east, west, or south, can help in estimating future development and transportation demand. It could also help in anticipating which employment centers will be experiencing growth.

As the major employment center in the vicinity, we would expect Skowhegan to draw most of Canaan's workers. And according to the census, 179 workers -- over 25 percent -- commute to jobs in Skowhegan. But people who work in Canaan are almost as numerous -- 158. And the next highest draw is not that far behind, Waterville at 107. After that it drops way off. Pittsfield draws 67, Fairfield 49, and Augusta 20. In all, about 13 percent of the workers head east to their jobs, another 3 percent north, 23 percent stay in town, and the vast majority go south and west.

Canaan Business Community:

It's clear from the figures that Canaan has a fairly thriving little job base of our own. In addition to the 158 people who live and work in Canaan, another 73 commute from other towns to work in Canaan, for a total of 231 workers in Canaan. We do not have a major employer in town, so these jobs are spread out among dozens of small businesses. Small business is much more unpredictable than a major employer -- a business could double its workers one month and close down the next -- but put all together, small business itself is a growth industry.

The largest employer in town, however, is not private business but the elementary school. After that, it drops way off. The largest "manufacturing" employer is listed as Canaan Woodworking, with 3 persons.

The following is a listing of most Canaan businesses, including self-employed, by category. Since we wish to recognize tourism as a major contributor to the local economy, businesses which are strongly related to tourist business are marked with an asterisk (*).

Industrial:

Canaan Woodworking

R. Johnson & Sons sawmill

Retail Sales:

Ames Mobile Homes

Soll's Antiques *

Hill Road Market

Canaan Superette

Lake George Market

Kelley Petroleum Products

Marjorie's Tropical Fish

Canaan's Corner Flea Market *

Wood Stuff

Jakesy's Lumber

Country Car Sales

No Brand Antiques*

Ezzy's Redemption

Canaan Country Store

Canaan Cycle Parts

Services:

Quality Electric

Kut Price Hair& Tanning Salon

Dorman's Lawn and Garden Service

Sunshine Design

Maheu's Garage

C&D Transmission

Albertson's Garage

Clark's Mills Transportation

D.R. Franklin Forest Products

David Porter Trucking

Roger Brown Trucking

Clark Milk Transport

J&P Auto Sales

Ivory Burrill's Garage & Auto Sales

Boucher's Small Engine Repair

Sibley Cuts

Albertson's Day Care

Judy Cochrains Day Care

No Limits

Jeness Auto Salavage

Busy Bear Day Care

Ron Mathieu's Construction

Kennebec Paving

Auction Barn

Rena Natales Child Care

Davis Dan's Storage Sheds

Danforth Lawn Care

Steve Baker Construction

JNS Graphics

JP Clarke Plumbing

Jundkins Construction

Cyrus Carter Enterprises

Canaan Laundromat

Windy Hill Redemption

Abbott Heating Services

Auxiliary Legal Services

Robinson Construction Co.

Burrill's Auto Sales

Hotel, Motel, Restaurant:

Purple Cow Restaurant*

Skowhegan/Canaan KOA*

Canaan Motel*

Lake George Motel & RV Park*

Farms and Rural Industries:

Lone Oak Arabians

Keaney Dairy

Herrin Dairy

Clark Dairy

Holt Dairy

Black Stream Lumber

Bob Johnson Lumber Mill

Arnita Jeweles Tree Farm

Wright Brothers Farm

Tad Walker Lumber

Fibre lee Farm

Willie Higgins Goat Farm

Wyoma Merrill Farm

In addition to these, there are several construction contractors and woods workers who are headquartered in Canaan but spend most of their time working at job sites.

Though there are businesses located throughout town, most of the businesses on this list -- and all the ones identified as tourism-dependent -- are located on or adjacent to Route 2. Many are also located within the loosely-defined Canaan Village. The businesses not on Route 2, Route 23, or in the village tend to be of the one- or two-man variety.

Canaan Village has seen a resurgence over the past few years. There has been new construction and extensive renovation for commercial purposes. The Canaan Downtown Merchant's Association has been responsible for much of the energy that has gone into both business revitalization and village improvements. The Association was responsible for the "Welcome to Canaan" signs and other projects, and has plans for more. In cooperation, the Town is working on getting grants for road improvements, downtown parking, and better sidewalks.

The Town recognizes that the recreational potential of Canaan and the surrounding area is largely untapped, and could yield large commercial opportunities. The potential market includes seasonal residents, day trippers to Lake George and other attractions, and through-travelers on Route 2. Tapping the tourism dollar should be an issue in future economic development planning.

The Town recognizing the importance of the regional economy, became a partner in the technology park located in Oakland. The park is a partnership of many municipalities in the region that have committed funds to create the park in concert with other grant funds and whom will eventually share in the rewards consisting of tax revenue and high wage jobs.