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Maryland ranks last in pace of job creation

Hampered by a slowdown in federal spending, Maryland came in dead last in the nation for its pace of job creation over the past year, shedding almost 1 percent of its employment base — nearly 20,000 positions — the U.S. Department of Labor reported.

The figures released Friday show declines in Maryland in eight of the past 12 months. Twenty-two states added jobs during the past year.

The preliminary report, which could be revised, isn't uniformly bad. The Labor Department's survey of households suggests that more Marylanders are working, either by finding employment out of state or by starting new businesses, neither of which would show up in the separate jobs count.

About 25,000 more Marylanders were working in May than were a year earlier, gains made largely in recent months.

The unemployment rate has trended downward as a result, from 7.4 percent in May 2010 to 6.8 percent last month. The rate was unchanged from April.

But that doesn't negate the job-creation problem facing Maryland. The state weathered the recession better than the nation as a whole, but it is now dealing with slowdowns and cutbacks to federal agencies and contractors — a key part of the regional economy — on top of a lackluster national recovery.

"The Maryland economy is weak," said Richard Clinch, director of economic research at the University of Baltimore's Jacob France Institute. "We need to see a broad-based national recovery, and until that happens, Maryland will lag. Government contracting is certainly not the same type of growth industry it's been over the last two decades."

The state's employers added nearly 10,000 jobs in April, according to data adjusted to account for normal seasonal changes in hiring and cutbacks. But that gain was more than wiped out by a 13,300-job loss in May that cut a swath across nearly every major sector.

Those adjustments are intended to allow for month-by-month comparisons, but the situation in May was less about layoffs than growth falling far short of the norm. May is normally a good hiring month, with an average of 20,000 jobs added in raw terms — before seasonal adjustments. The unadjusted figures for May show employers adding a much more modest 6,700 positions, the lowest for the month in 36 years. Seasonal adjustments translated that into a big loss.

Over the year as a whole, though, Maryland lost close to 20,000 jobs whether the figures were adjusted or not.

All told, slightly more than 200,000 Marylanders were out of work and actively looking in May. That's down from the peak in January 2010, when 25,000 more were unemployed, but remains abnormally high for the state, which had fewer than 110,000 unemployed adults when the recession began at the end of 2007.

So many job-seekers competing for positions has contributed to a long, frustrating search for many people.

When the landscaping company that employed him moved south just over 21/2 years ago, Michael L. Starr Sr. was prepared. The Edgemere man, anticipating the move, went back to school to get certified as an electrocardiograph technician so he could work in health care, a field that has always fascinated him. But he hit a wall in his job search.

"They want anywhere from six months to a year experience," said Starr, 52. "If you don't have the experience, they don't even want to talk to you. And my question is, how do you get the experience?"

Besides sending out the requisite "tons" of resumes, he's tried creative measures — shadowing technicians at hospitals in hopes of catching a manager's eye, looking for volunteer opportunities, reaching out to a temp agency. But so far that's gotten him nowhere.

"It's really disheartening," said Starr, who cut back his family's expenses so they can get by on his wife's salary. "I'm not looking to walk in the door making top dollar. I just want a job. You know, I just want to feel like a human being again. I want to feel ... that I'm contributing."

Lawmakers in Washington are negotiating to attack the federal government's huge debt levels by following Starr's suit — cutting back on spending. That does not bode well for Maryland, which relies on federal employment and contracting.

With that in mind, a local banking executive has launched an initiative to quantify the possible effects of federal cuts and work on ways the state can grow without Uncle Sam's help. Blueprint Maryland, announced this week, will organize forums across the state to get the conversation going.

"This whole region in general is very vulnerable to changes in federal spending," said John Delaney, the Chevy Chase banker who is chairing the effort. "I'm a big believer in 'hope for the best but prepare for the worst.' "

Clinch, the economist, remembers anxiety in the early 1990s that post-Cold War federal cutbacks would choke the state. Instead, spending revved up. But this time, he believes, cuts are inevitable.

He suggests the state invest more money and effort on economic development — and reconsider policies that aren't business-friendly — to better capitalize on a highly educated work force and good location.

"We have a problem in Maryland," he said. "Virginia isn't experiencing the same problem because it has diversified its economy. This is simple Economics 101."

Part of the reason more Marylanders have found jobs in recent months could be that they're commuting to Virginia. That state took a recessionary hit, too, but employers there have added jobs every month this year.

Alexander M. Sanchez, Maryland's labor secretary, said there's a lot of cross-border commuting because Marylanders live within driving distance of so many states. But he said Maryland is not falling behind in the jobs race.

Sanchez said the last-place ranking in year-over-year growth reflects a relative strength. Because Maryland was doing better than average during the recession, he said, many states have more lost ground to make up.

"May was a soft month, there's no getting around it, but … the unemployment rate has declined or held steady for 16 straight months," Sanchez said.

Joe Gonzales, a regional vice president based in Maryland for the staffing firm Robert Half International, sees reason for optimism on jobs. He said his clients, companies in need of employees, are feeling more confident about growth prospects.

The offices he manages specialize in white-collar specialties — finance, accounting, law, technology, advertising and marketing. He said they're seeing so much demand for certain finance and accounting staff that candidates are getting multiple job offers.

But with the high unemployment rate, he said, some companies are setting a high bar in their requirements. One specialized skill isn't enough. They want more.

"We'd like everything to be 100 percent better again — it'd be good for everybody — but we do feel like it's moving," Gonzales said. "Not as fast as we'd like, but moving in the right direction."

jhopkins@baltsun.com

twitter.com/realestatewonk

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