Md. is No. 2 in job losses in past year Where is recovery, economists ask

THE BALTIMORE SUN

Maryland, socked by job losses in the defense and construction industries, suffered the second-worst loss of employment in the nation during the past year, prompting economists to question how far off a recovery lies.

Although the state's unemployment rate fell slightly in July, it was not enough to reverse a trend that has cut 79,500 jobs in Maryland since the summer of 1992.

"Maryland is really staggering along," said Charles W. McMillion of MBG Information Services, a Washington economic research firm.

There are a few bright spots in the state's economy -- slight gains in personal income, housing prices and hiring expectations for the second half of the year.

But these few positive signs aren't enough to convince economists that a strong recovery is near. "We have some real signs of turnaround," said Michael A. Conte, an economist at the University of Baltimore. "It's just excruciatingly slow."

The latest figures, which Mr. McMillion's firm reported this week, showed that only Maine suffered a greater decline in employment than Maryland since July 1992.

The report was based on figures from the U.S. Bureau of Labor Statistics, which will release August unemployment figures for the nation today.

Although the job losses cut across almost all sectors of the economy, Mr. McMillion said, the construction, manufacturing, utilities and defense industries were hardest hit.

"Maryland benefited disproportionately in the '80s from the boom in commercial construction and defense spending, and it bred an atmosphere of complacency," Mr. McMillion said. "Everybody was fat and happy in '87, '88, '89 and '90."

It is a cycle that the state has seen before, he added. In the 1960s, the economy in Maryland grew much faster than in the rest of the nation, only to lose ground with the oil shocks and real estate problems of the 1970s.

White-collar jobless

This time, unemployment has cast a wider net, snaring white-collar workers unaccustomed to the frustrations of the job hunt.

"I'm at the point where I apply for positions I know I'm overqualified for," said Cyrus Stroman, a 44-year-old former naval officer at Fort Meade. Mr. Stroman lost his full-time job in January.

Yesterday, Mr. Stroman attended a job-placement seminar for those over 40, held at the Maryland Professional Outplacement Center in Linthicum, one organization overloaded with clients.

Mr. Stroman's wife works and is a source of emotional as well as financial support, he said. But he's finding the job search depressing.

"Sometimes it really gets to me. . . ." he said, pausing. ". . . the pain."

According to government figures, Mr. Stroman was one of more than 800 Defense Department workers who lost their jobs in Maryland since June of last year. Further defense cuts are bound to bring more job losses, especially in the suburbs of Washington, which are home to scores of small companies that rely on defense contracting.

Manufacturing and building

Hardest hit, however, have been manufacturing and construction workers. Manufacturing employment has fallen by 4,600 in the 12 months through June, and more than 7,000 construction workers have lost jobs in the same period.

The only employment sectors that have grown recently are temporary personnel and health care. But most of the health-care jobs have gone to relatively low-paying clerical workers who are required to process Medicare and Medicaid payments.

Overall, the state has suffered a 3.2 percent decline in employment since July 1992, according to the federal figures. That's the worst in the nation, except for Maine's 3.4 percent fall. "It's going to continue to be tough this next six months," Mr. McMillion said.

If there is a bright side to the gloom, it's that Maryland businesses are sweating through a weight-loss program that is building a more productive economy.

In July, the unemployment rate fell to 6.7 percent, from 6.8 percent in June, according to the U.S. Bureau of Labor Statistics, whose figures are adjusted to account for seasonal factors, like temporary summer employment.

The raw, unadjusted numbers, which the state is scheduled to release today, will show a slightly greater drop in the July jobless rate, to 6.6 percent, according to Mr. McMillion's study. And both the size of the labor force in Maryland and total employment rose nearly 2 percent since June, according to those nonseasonally adjusted numbers.

Cause for optimism?

Some economists believe that the state's prospects are brighter than current figures suggest.

"The companies, even though they've laid off a lot of people, are stronger and are going to be in a position to hire soon," said Pat Arnold, director of Maryland's Office of Labor Market Analysis and Information. "I think we've taken a lot of pain, but it's going to pay off now."

About a quarter of Maryland's employers said they expect to hire permanent staff before the end of the year, compared with 8 percent who predicted layoffs, according a recent Manpower Inc. survey. That's better than the 22 percent of employers nationwide who said they plan to hire by December, and the 11 percent who said they will cut workers.

Statewide personal income has risen a slight 3.1 percent since the first quarter of last year, noted Mr. Conte, of the University of Baltimore. And housing starts have risen very slowly of late, he said.

"Technically, we're not in recession," Mr. Conte said. "But you wouldn't know it by Maryland."

The state probably will see more job losses in the second half of the year, Mr. Conte said. "I see '94 and '95 holding some promise. But clearly, '93 is not going to be the kind of recovery that we saw last November and December."

"I still remain of the opinion that we do have a slow recovery going on," Mr. Arnold added. "I think it's unfortunate that it's as slow as it is, but it beats a recession."

JOBS: BEST TO WORST

Percentage change in employment from July 1992 to July 1993

BEST: ..........

Nevada ......... +6.99

Utah ........... +6.24

Indiana ........ +5.50

Michigan ....... +3.78

Georgia ........ +3.77

WORST: .........

Maine .......... 3.38

Maryland ....... 3.22

Louisiana ...... 2.54

Washington ..... 2.48

Oklahoma ....... 1.41

SOURCE: MBG Information Services and U.S. Department of Labor

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