Editor’s note: The following commentary appeared on CenterMaryland.org on September 12.
By Donald C. Fry
Depending on who you ask, the most recent employment data for Maryland from the federal government are either a cause for concern or simply a glitch in a longer-term data stream that documents acceptable job growth in Maryland.
Here are the latest job-growth facts reported by the federal Bureau of Labor Statistics. Maryland lost 9,000 jobs in July, according to the bureau’s preliminary data. If accurate, this would be the state’s largest one-month job loss in more than four years. Nevertheless, even after Maryland’s job loss in July, our state still has gained a net 16,300 jobs since July 2013, according to BLS data.
Well, should we be worried, or should July’s job loss be considered just a monthly aberration?
Experts such as Daraius Irani, chief economist at Towson University’s Regional Economic Studies Institute, sound a cautionary note over the one-month loss of 9,000 jobs in July.
In his most recent newsletter, Irani describes a “tumultuous” jobs market in July where key economic sectors for Maryland – such as education services and health care – “lost their way” and hiring stalled in other growth sectors including professional, technical and scientific services. Job creation in another growth driver – the wholesale trade, transportation and utilities sector – “took a turn in the right direction,” Irani notes, but cautions that growth in the federal government sector – a lead driver of job growth in Maryland – began to decelerate, yielding a gain of just 100 jobs in July.
The longer that growth languishes in key employment sectors that are not dependent on the federal presence in Maryland, “the more that concern will grow as the federal government begins to tap the brakes on spending,” Irani warns.
Not so fast on the doom and gloom, counters Maryland’s Department of Labor, Licensing and Regulation in its August jobs report, which acknowledged July’s decline of 9,000 jobs but focused on the state’s net increase in jobs over the previous 12 months.
“Still, four out of seven months in 2014 have posted over-the-month total job gains. Compared with July 2013, Maryland total jobs are up by 16,300,” the DLLR release boasted. It is interesting to note that, offsetting a loss of government jobs, Maryland’s private sector generated 18,700 new jobs between July 2013 and July 2014, according to the DLLR release.
All valid points, indeed. So which is it, when it comes to the employment situation in our state? Are we on the brink of a jobs slowdown or are we doing just fine?
A look at trends in recent data from all angles suggests that, when it comes to job creation, Maryland could be stagnating. Among six mid-Atlantic states, Maryland ranks 5th for its percentage rate of job growth both in July and for the previous 12 months as well.
A particularly sobering piece of data is that, despite experiencing job growth in four of seven months this year, as state officials point out, Maryland has netted only 900 more jobs so far in 2014 than it had in December 2013, according to the Bureau of Labor Statistics.
That number could change for better or worse when the next two pre-election jobs reports are released next week and again in October.
It’s an election year, so you can be assured that between now and November 4, the status of Maryland’s job-growth performance will be spun hard in various directions by the candidates for statewide office and the Maryland General Assembly.
But either way the jobs reports go in the next two months, one thing seems clear. The issue of business climate and job creation must be the top policy priority of the next governor and state lawmakers.
Maryland must focus on strategic policies that promote a competitive business climate and nurture job growth in all employment sectors, especially those that are not dependent on what virtually all economic experts suggest will be trimmed federal spending.
For Maryland’s economic future, strengthening our state’s business climate needs to be not just another issue for winners in November, but the issue for our leaders in post-election Annapolis.
Donald C. Fry is president and CEO of the Greater Baltimore Committee. He is a regular contributor to Center Maryland.