21,200 jobs lost in Md. last year City bore brunt, losing 9,100

April 27, 1993|By Kim Clark | Kim Clark,Staff Writer

Maryland suffered the fifth-worst job loss in the nation in 1992, as manufacturing plant shutdowns, defense cutbacks and construction layoffs cost the state 21,200 jobs, the federal government reported yesterday.

And Baltimore, bearing the brunt of the job losses, saw employment fall by 9,100, or 2.1 percent, last year -- to its lowest level since the government started counting in 1978.

Since 1990, the city has lost a total of 51,100 jobs, dropping employment to 421,800, the Bureau of Labor Statistics (BLS) said.

Although there were signs that the hemorrhaging of jobs in suburban parts of the state was finally stopping, business people and economists said there was little hope for an imminent turnaround in Baltimore.

Mahlon Straszheim, the University of Maryland economist who advises Gov. William Donald Schaefer on the economy, said his surveys and economic models indicated that businesses in areas such as Howard, Montgomery and Frederick counties were growing fast enough to pull the state out of its employment decline within the next few months.

In fact, a survey of Washington and Baltimore CEOs released yesterday showed increasing optimism. Nearly a quarter of the executives said they planned to add staff in the next six months, up from 18 percent last year.

But neither executives nor economists were optimistic about job prospects in Baltimore. "The city could continue to lose jobs for a time," Dr. Straszheim said. "Baltimore City is very vulnerable."

Baltimore's predicament -- losing jobs to outlying areas -- is common to cities nationwide, the BLS reported.

Philadelphia, for example, lost 2.5 percent of its jobs last year, while its suburbs saw employment rise 10 percent.

Wayne Vroman, an economist for the Urban Institute in Washington, said the "urban doughnut" problem of job flight to ++ the suburbs "has been going on since 1969 . . . and it contributes to all the social problems in the cities."

Mr. Vroman warned that urban job losses could feed on themselves, as interrelated businesses fail or move. "I'm very pessimistic about employment prospects . . . I don't think [the job losses] will stop," he said.

Last year's 1 percent decline in Maryland employment was the first annual statewide drop in the past decade.

But the Baltimore region -- which includes the city and six surrounding counties -- has lost jobs for two years. In 1992, area employment dropped by 16,000, representing 1.5 percent of its employment base.

Still, it was an improvement over 1991, when the region lost 44,300 jobs, or nearly 4 percent.

The federal jobs report noted that, for the Baltimore area, jobs disappeared in every sector but one -- services.

Construction employment in the Baltimore area, for example, dropped by nearly 10 percent, or 6,000 jobs. Manufacturing businesses erased 7,400 jobs, a loss of 6.2 percent of the region's total industrial job base.

White-collar workers also suffered, as a total of 1,700 finance, insurance and real estate jobs disappeared last year, reducing total employment in that sector by 2.2 percent.

The only bright spot was the strong job growth in health services, which added 2,700 jobs in the region.

Health services were responsible for the only job growth in the city, adding a total of 900 workers last year.

Local manufacturers said they've been reducing payroll because continued underpricing by foreign competition, a general weakness in demand and improvements in technology.

Jeff Feldman, president of Felco Packaging Specialists on East Baltimore Street, said one reason he cut his staff back to 20 from 25 last year was that he can supply his customers with imported polypropylene bags that are less expensive than the ones he could make.

He's been slowly cutting staff over the past decade because automation, such as bag-feeding machines, have eliminated the need for workers to hand-feed burlap bags, for example, into sewing machines.

And Mr. Feldman sees little hope that he will need additional workers to make bags or boxes any time soon.

Although economists declared the most recent recession over in March 1991, Mr. Feldman said his dealings with hundreds of small companies, have convinced him "there is a recession out there."

But a few miles north, near Towson State University, Richard McLeary has added about seven new workers to his medical billing company in the past year and plans to add another seven in the next year.

Physicians Professional Billing Services Inc., which has grown from 3 employees in 1979 to 57, has been getting more clients as doctors, confused by the government and insurance rules, and are willing to pay Mr. McLeary to handle their billing.

Mr. McLeary has bought several computers to automate much of the billing and eliminate some of the need for clerks to enter data into computers. But he says he'll need more people to handle expected growth.

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