Hiring by Maryland's largest employer — the federal government — has fallen by more than 40 percent nationally over four years, and the state's job market is feeling the pain.
Years of tightening budgets have brought federal hiring to the lowest levels in at least a decade. And each month for more than a year, Maryland has posted a decrease in federal employment from the previous year, creating a drag on overall employment.
The decline in federal jobs has been a major contributor to Maryland's spotty employment performance in recent months. When the state saw dismal numbers for July, showing a loss of 9,000 jobs from the previous month, the O'Malley administration announced the news with a cheery headline that emphasized 18,700 new private sector jobs over the past year.
Not mentioned was the loss of some 2,400 federal jobs since July 2013, as many agencies left positions unfilled amid budget sequestration and hiring freezes.
Federal employment in Maryland is now at its lowest level since military base realignment brought a surge of jobs in 2010 and 2011.
"At the end of the day, all of these things translate into a more stagnant Maryland economy," said Anirban Basu, founder of Sage Policy Group, an economic consulting firm.
Federal hiring has fallen in Maryland at about the same rate as it has nationally, according to the Office of Personnel Management. Almost 15,000 employees joined the federal workforce in Maryland during fiscal year 2009. By 2013, the number had fallen to a little more than 8,000
Federal agencies have been under pressure to reduce staffing, Basu said, and managers have in many cases decided to do so through attrition.
"It's different from layoffs and doesn't have the same impact as layoffs," Basu said.
Some of the agencies most heavily affected are those with a large presence in Maryland.
One agency that has taken an especially hard hit is the Social Security Administration, headquartered in Woodlawn. New hires in Maryland fell from 1,507 in 2009 to 117 in 2013. Employment at the agency in Maryland has dropped from 12,744 in 2010 to 10,769 this year.
The Bethesda-based National Institutes of Health was more typical of the national decline, with about a third fewer hires in 2013 than in 2009.
An agency that is bucking the trend is the Centers for Medicare & Medicaid Services, also in Woodlawn, which added 480 to its payroll in 2013 — up from 264 in 2009 — as it ramped up for the implementation of the Affordable Care Act.
Not included in the numbers released by OPM is one of Maryland's largest employers: the secretive National Security Agency at Fort Meade.
The decline in hiring has taken a toll on customer service and worker morale, union officials say.
Withold Skwierczynski, president of the American Federation of Government Employees' council for employees of Social Security field offices, said attrition has led to shorter office hours and longer waits for people seeking services.
"The public is getting very frustrated and angry because of the diminishment of service, and people take it out on our employees," he said. "We're really producing a shoddy product. It's not the Social Security of old."
With fewer workers to counsel Social Security beneficiaries, Skwierczynski said, more people are being pushed to use online services. In many cases, he said, people who are not computer-savvy might be making choices about benefits that cost them money in the long run.
"Social Security is a little different from buying pizzas or tickets to the ballgame," he said.
Nicole Tiggemann, a spokeswoman for Social Security, said service has not deteriorated. She pointed to customer satisfaction ratings in which the agency consistently scores about 80 percent.
Hiring freezes, which tend to slow hiring rather than stop it, did not apply equally across pay grades. The number of people hired in Maryland for positions paying $150,000 or more increased slightly. But the number of people taking jobs in the $40,000-to-$60,000 range dropped by more than half.
Basu said the loss of federal job opportunities is likely prompting some Marylanders, especially those who are highly educated, to move to other states.
"That's precisely the people Maryland wants to retain," Basu said. "We're losing high-quality jobs and some high-net-worth families. All that contributes to a loss of the tax base."
Economists have long warned that Maryland needs to make itself more attractive to private-sector employers to offset what they expect to be a long-term trend of federal cutbacks.
Improving the state's business climate is an issue stressed by both Democratic gubernatorial candidate Anthony G. Brown and Republican rival Larry Hogan in this year's election.
"The new governor has got to take more seriously Maryland's business reputation," Basu said.
Federal employment in Maryland
(at end of July, in thousands)
Source: Maryland Department of Labor, Licensing and Regulation