As city's economy changes, job losses continue CAMPAIGN 1995

July 19, 1995|By Jay Hancock | Jay Hancock,Sun Staff Writer

In Baltimore, the recession never ended. As mayoral candidates discuss jobs and growth, a disturbing fact looms: The city's economy has quietly, fundamentally changed.

Commerce in Baltimore once beat in rhythm with business activity across Maryland and across the nation. No longer.

"There has been a structural shift," said Michael A. Conte, director of the University of Baltimore's Regional Economic Studies Program.

"What the city is going through is not a cyclical phenomenon any more. We have moved into a new era. Unfortunately, it's not a happy one."

Mr. Conte and his team knew something was seriously wrong in Baltimore when their statistical formulas stopped working there. A tried-and-true index has predicted that the city would enjoy growth and relative prosperity each year after 1991. Instead, Baltimore surprised university economists by continuing to lose employment through 1994.

The total toll over five years: 61,900 jobs.

Baltimore's suburbs continue to expand and thrive. But the last time so few people held jobs inside city limits was the mid-1970s. All the city's hard-won employment growth of the 1980s has been wiped out.

Job disappearances in 1994 were less severe than previously, and preliminary data suggest that city employment leveled off in the early months of 1995. Nevertheless, said economist Charles W. McMillion, "it is clear that the city continues to lose jobs."

Whose fault is it? As Baltimore prepares to vote for mayor, economic policy is a top issue and gains new urgency with Congress' plans to slash the federal payroll. More than 15,000 federal employees work in the city. Federal shrinkage could expose another pillar of employment to layoffs and shutdowns.

Kurt L. Schmoke, mayor since 1987, defends his economic record as a creative and positive response to hostile trends largely out of his hands. Mary Pat Clarke, City Council president and Mr. Schmoke's opponent, lays the city's 13 percent employment loss since 1989 directly at Mr. Schmoke's polished Bass loafers.

The facts are somewhere in between, interviews with economists, economic development leaders and business operators suggest.

It is true that Baltimore has suffered from forces remote and largely unstoppable: Corporate mergers. Cuts in defense spending. Fewer federal urban-development dollars. Foreign competition. Cheap gasoline, cellular phones and laptop computers -- centrifugal forces spinning jobs into the hinterlands.

Forces beyond control

"If we could just get $100-a-barrel oil, Baltimore's problems would be solved" by making suburban commuting too expensive, said Mr. McMillion, president of MBG Information Services, a Washington economics consultancy.

But many of Baltimore's economic handicaps are local. The city's high crime and problem schools have hurt its jobs picture as much as foreign competition or corporate layoffs, economists said.

At the same time, the Schmoke administration has drawn criticism for the way it has coped with economic megatrends. Many business people believe Mr. Schmoke hasn't devoted enough personal energy to wooing employers, is out of touch with big-company executives and seems largely uninterested in business.

Business people are unenthusiastic about the candidacy of Mrs. Clarke, a community activist whose best-remembered economic act was her resistance 17 years ago to legislation that led to Harborplace, the germ of downtown's revival.

But Mr. Schmoke, business people believe, has an uneven economic record. The comments go beyond complaints, reported by The Sun last year, about alleged incompetence at Baltimore Development Corp., the city's economic development agency.

Sonny Morstein is a jeweler on Light Street and president of the South Baltimore Business Association.

"I think there is much more this mayor can do to create a pro-business attitude to make business people feel he cares," said Mr. Morstein, who nevertheless praised Mr. Schmoke for recently boosting services to community shops.

More pro-business

A draft report from a committee of business leaders studying Baltimore Development Corp. makes a similar point. "The mayor should more aggressively identify himself as the city's principal cheerleader . . . and should leave no doubt that economic development is an ongoing mayoral priority," the report said.

The word "cheerleader" evokes images of former Mayor William Donald Schaefer, known for prodding, cajoling and threatening businesses and politicians onto his development bandwagon. It's a comparison that is poison to the Schmoke campaign, which holds that Mr. Schaefer, who stepped down as governor this year, gets too much credit for Baltimore's 1980s revival.

But in the minds of many local corporate leaders, Mr. Schaefer was the very model of a business-minded mayor.

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