Economist still predicts slack Md. recovery

ECONOMY WATCH

November 23, 1993|By John E. Woodruff | John E. Woodruff,Staff Writer

"A painless recession and a joyless recovery."

Mahlon Straszheim recalls his own 1990 estimate of what was in store for Maryland half ruefully and half with a professional's pride of authorship.

Ruefully, not only because he was wrong about the recession but also because its pain reached so many more Marylanders than he imagined.

Marylanders like Ed Adams.

Five months ago -- more than two years after the recession was declared ended in the rest of America -- Mr. Adams called his family together at his White Marsh home. He had just been laid off from Miles Chemicals in Baltimore.

"I told everybody we were going to make it, and I still believe that. This is my fourth time to be laid off from a job after building up seniority that might have been enough to protect you," he said. "But I also had to explain that we were going to be getting poorer every day this lasted, and we needed everybody to help every way we could -- turn off lights, cut back the heat, use less gasoline, all those things," he said.

"Yes, it has been a much more painful recession, and painful for far more people, than I thought when I used that phrase," Mr. Straszheim said. "But I continue to believe the recovery will be very moderate."

Especially for Maryland.

Mr. Straszheim, chairman of the Economics Department at the University of Maryland and Gov. William Donald Schaefer's chief economic adviser, is like most economists who track Maryland. He thinks the state is at last pulling out of recession -- a year or two behind the rest of the country. And while the United States can look for two or more percentage points of growth in 1994, Maryland will be close to 1 percent, just as he suggested three years ago.

Why Maryland? Wasn't Maryland one of the boom states of the late 1980s? Wasn't this state supposed to be recession-proof?

That's what a lot of people thought. Until this one hit.

The federal spillover from Washington, huge government office blocks like Social Security and the National Institutes of Health, a generous and diversified share of defense installations and defense contracts -- all were supposed to keep Maryland insulated against recession. A new emphasis on high technology, especially biotechnology, was supposed to turn all this stability into growth.

Then the Cold War ended, just about the time recession hit.

Maryland not only hemorrhaged the same kinds of manufacturing and white-collar jobs as most of the country, but also watched many of its strengths turn into weaknesses. Defense installations and contractors that had helped see Marylanders through past recessions suddenly were putting people out of work.

Just where Maryland stands today may not become clear until May. That's when the state adjusts its employment figures to add in businesses that started up in the preceding 12 months.

"The downsizing by existing firms shows up right away, because they are in the figures from the beginning of the year," Mr. Straszheim says. "But there has also been a very substantial number of new business start-ups in the past few months. They won't get into the 1993 figures until they are adjusted in May. My sense is that when we see the revised figures in May, we'll see that Maryland had some modest net job growth even in 1993."

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