Officials, experts differ widely on outlook economic for state

January 27, 1992|By Jon Morgan

Throughout the fast-growing 1980s, Maryland's economic base proved rock solid. Jobs were created as fast as offices could be built. Futuristic industries popped up in the shadows of shuttered factories and abandoned smokestacks.

But the base has been badly shaken by more than a year of recession, and experts are inspecting it for cracks. How will it perform when the state emerges from the recession?

The answer varies widely depending on who is asked. State officials say Maryland is poised for new growth and vigor. Other, independent experts warn that troubles in the very industries that fueled the state's growth in the last decade may keep it out of the first stages of a national recovery.

"In the long run, we have such fabulous resources in the state, but those resources need to be well used and we face a turbulent period," said Dr. Charles McMillion, president of MBG, a Washington-based business consulting group.

While a fellow at the Johns Hopkins University Institute for Policy Studies, he helped coordinate an 11-part study of the state's economy competed in 1990. He says Maryland has a lot that other states should envy, but he worries about the long term re-adjustment that will be necessary to maintain momentum.

For one thing, Marylanders and their leaders need to better understand the dramatic changes that have occurred in recent decades and redirect priorities, he said.

At one time, Maryland's wealth was measured in tons of steel made, pounds of cargo shipped, or bushels of crabs harvested. Today, those activities employ a relatively minuscule part of the state's 2.4 million workers.

The state produces more computer software than steel and has about twice as many doctors as dockworkers. Blue crabs, the feisty symbol of the Free State, provide far more dinners than paychecks.

A more accurate portrait would be dominated by lawyers, scientists and doctors. Federal workers, military and civilian, constitute the biggest chunk. Uncle Sam is the state's largest employer.

This mix of jobs -- the intricate puzzle of occupations that make up an economy -- will largely determine how effectively the state throws off the effects of a long, debilitating recession.

Manufacturers have cut way back in Maryland, eliminating more than 45,000 jobs in the past 15 years. However, nearly 700,000 non-manufacturing jobs were added during the period in such places as offices around Washington, high-tech labs along I-270 and hospitals in Baltimore.

The state's biggest private employers? If you guessed Bethlehem Steel or General Motors Corp., you're wrong. Try Johns Hopkins, with a combined full and part-time work force of 24,500 at the university and health system, or maybe Giant Foods Inc., with 18,000 Maryland workers.

According to state figures, services, a category encompassing health, business, legal and educational sectors, now employ about 620,000, or more than a quarter of Maryland's 2.4 million workers, the largest single category.

Retail trade provides 420,000 jobs. Federal, state and local governments employ 412,000, while finance, insurance and real estate have 128,000. Combined, these account for 40 percent of the work force.

Manufacturing, by contrast, employs fewer than 200,000, or a little more than 9 percent of the work force. That's about half the national average and it's falling. Agriculture, forestry and fisheries employ fewer than 50,000; mining, fewer than 2,000.

The economic mother lode in Maryland is "producer services," or the researchers, advertising executives, lawyers, architects, engineers, and other workers that service companies (or producers) in and out of the state, rather than people (or consumers) exclusively in the state, Dr. McMillion said.

"We have a much higher percentage of our population in producer services than almost any other state. We have one of the highest concentrations of high-wage, knowledge-intensive industries," he said.

In most downturns these sectors would cushion the fall. But the service sector has suffered deeply this time around.

One key to Maryland's future will be its ability to find new work for the service workers idled by declining federal spending, Dr. McMillion said.

"The state needs to not be all things to all people and to focus on key industries in each region of the state," he said. "We need to completely turn our business development strategy upside down."

Efforts to promote exports have been directed largely at manufactured goods, he said. The state should instead look for more ways to help the producer services adapt to federal budget cuts by finding new, private-sector customers so the jobs don't disappear with the federal money, he said.

He applauds Gov. William Donald Schaefer's newfound support for high-tech businesses. But he warns against an overemphasis on those high-tech industries that have not materialized.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.