Maryland's anemic growth

August 17, 1993

The news isn't good on the state and local economic scenes. June's unemployment numbers are depressing: a big jump from 6 percent in May to 6.8 percent just 30 days later. Maryland's economic recovery is proceeding -- but progress is measured in minute steps forward.

Given the shaky nature of this recovery, businesses are extremely reluctant to make new hires, even to help out during the summer months. The recession left many Maryland companies in a precarious position. They are in better shape than they were a year ago, but business still isn't booming.

Consumers are reluctant to go on spending sprees, and there is trepidation among shopkeepers about the impact of the just-passed tax bill and the soon-to-be-released health-care plan. Will it hurt their profitability? All this only adds to the malaise in Maryland.

As Gov. William Donald Schaefer's chief economic adviser, University of Maryland economist Mahlon Straszheim, put it, the situation isn't quite as bleak as the June unemployment numbers would indicate, but "it's also clear that the economy doesn't have the momentum to increase employment significantly."

Baltimore City's plight is the most troubling. The jobless rate in the city rose from 10.1 percent in May to 11.5 percent in June. There was no federal money for summer jobs and little local money. Such a high rate of unemployment is unacceptable on a long-term basis: It would create a drag on the economic development prospects of the entire region, and the state as well.

Still, there are areas of hope. The Maryland economy created 26,000 new jobs during June. The average work week in the manufacturing sector was up slightly, which may translate into the creation of more jobs if that trend continues. Personal income and growth in the manufacturing sector are on course to grow by 5 or 6 percent over the next two years.

Summer unemployment figures are always tricky to decipher. College and high school students looking for temporary work give a distorted picture of the overall employment scene. A better indicator comes in the autumn employment numbers. Then we will get a more reliable fix on the true state of the Maryland economy.

The worst of the recession may be behind us in this region, but the recovery is taking its time getting here.

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