Md. unemployment rate drops to five-year low

January 07, 1995|By John E. Woodruff and Kim Clark | John E. Woodruff and Kim Clark,Sun Staff Writers

Despite steady improvement that brought Maryland's unemployment rate to a five-year low in November, the state's job base faces serious deterioration, economists who track the state say.

The Maryland unemployment rate dipped to a seasonally adjusted 4.9 percent in November, falling a tenth of a point from October's 5 percent and remaining substantially below the national rate, as it has since last summer, the state Department of Economic and Employment Development (DEED) said yesterday.

"We continue to be encouraged about the direction of Maryland's economy. From a number of vantage points, the state appears to be moving in the right direction," Mark L. Wasserman, the DEED secretary, said of the November unemployment figure. The number of Maryland residents with jobs reached a new high of 2.72 million, DEED said.

But the number of jobs in Maryland actually fell by 1,500 that month, and this was one of only six states in which that figure fell during November. At the same time, the rest of the country enjoyed booming growth as 488,000 jobs were added in the United States in November.

Private economists pointed to November as a warning that behind the improving unemployment figures lies more deterioration than improvement.

"I think people can be badly misled if they focus on the unemployment rate of 4.9 percent," said Charles McMillion, president of MBG Information Services, a Washington-based consultancy that tracks the Maryland economy.

The figure was not misleading any of the more than 30 people waiting to see job counselors yesterday at the state's Eastern Avenue unemployment center. They are among the 132,378 Marylanders who remain unemployed.

Work "has been six months here, nine months there" ever since (( 1990, said Allen Nantz, of Chase, whose most recent long-term job lasted 17 years as a manufacturing engineer for Martin Marietta Corp. The Carr-Lowery bottle factory, where he worked since last May, laid him off two days before Christmas.

"They gave me a very nice bottle of liqueur in the morning, and in the afternoon I was laid off," he said.

Behind the decline are discouraged workers, who continue to drop out of Maryland's labor force. And many parts of the state are losing population as thousands of unemployed workers move to other states either to find jobs or for lower living costs that

make it easier to subsist while unemployed, said Michael A. Conte, director of regional economic studies at the University of Baltimore.

The workers who leave Maryland reduce the number of unemployed Maryland residents and thus lower the official unemployment rate.

But their departure is not good news, Mr. Conte said.

"When your people have to move away to find work, it helps your unemployment statistics, but it is a very unhealthy sign for your economy, especially since many of the jobs we are losing are high-paid manufacturing workers, engineers, bankers and other professionals," Mr. Conte said.

Similarly burnishing the state's unemployment numbers, without adding any jobs in Maryland, is the accelerating flight since 1990 from Washington, which has had a net loss of 34,000 residents -- to 570,000 from 604,000 -- from 1990 through 1994.

"Since Maryland is getting the ones with jobs, that helps improve the state's unemployment picture for now," Mr. McMillion said.

But with the District declining, "the day is not far off when Mayor Marion Barry has to start cutting District government payrolls, and that will hit Prince George's County the same way federal payroll cuts are hitting Montgomery County," he said.

"I think the November decline in jobs tells a lot about where Maryland is heading," Mr. McMillion said.

On one point, the private economists agree with DEED's Mr. Wasserman, who says that one factor helping to cut the official unemployment total is a large number of laid-off workers who are practicing their professions at home.

Maryland's job growth for the 12 months ended Nov. 30 was just 0.8 percent. The only states that performed worse were Rhode Island, Connecticut, California, the District of Columbia and Hawaii, he said.

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