City's job losses still outpacing D.C., Richmond Woes in retailing, wholesale trade are main culprits

Demons and demographics

UB study documents continuing shifts of the human tide

October 09, 1995|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

Baltimore has continued to lose jobs faster than Washington and Richmond, Va., even since the most recent national recession ended, according to a new report by the University of Baltimore, and hemorrhages in retailing and wholesale trade are the primary culprits.

The city lost 4.6 percent of its job base between 1991 and 1994, according to the university's regional economic studies program. Washington lost 3 percent of its jobs, and Richmond lost 1.4 percent. The study's authors said suburbs of all three cities gained jobs along with the national recovery, with suburban Baltimore growing the most slowly of the three areas.

"The outlook is not bright for any of the area's major cities, and the disparity between the urban core and the surrounding metropolitan jurisdictions has, if anything, accelerated in the 1990s," economists Michael A. Conte and Robert A. Riva write.

The percentages work out to 19,842 jobs lost in Baltimore, the study says. The biggest losers: 4,967 jobs in retailing, or 10 percent of all Baltimore retailing jobs; 4,733 jobs in wholesale trade, a drop of 18.3 percent; and 4,117 jobs in manufacturing, a 10 percent decline that cut manufacturing's share of all city-based jobs to less than 9 percent, making the traditional blue-collar city economy nearly as service-oriented as is that of Maryland as a whole.

The gains follow the loss of 10 percent of Baltimore's pre-recession jobs between 1989 and 1991, Mr. Conte said.

"Retail, in particular, has shrunk because of the population exodus" to the suburbs, Mr. Conte said. "We see an exodus from Richmond and D.C., but Baltimore is changing its character more because Baltimore has always been a very residential city."

"The wealth created in the city is carried out to the suburbs," by people who commute into Baltimore, Mr. Riva said. "There's not enough income [among people who live in town] for a trade base to be sustained. Population declines overwhelm whatever new tourism in the Harbor could draw."

Economic observers knew the city had kept losing jobs after 1991 even before the UB study, which is the lead article in the new issue of the economic studies program's quarterly journal.

The extent of the losses had not been as clear. In addition, the report says the city's finance, insurance and real estate sector lost fewer jobs than in either Richmond or Washington, disputing the idea advanced by political allies of Mayor Kurt L. Schmoke that job losses were primarily caused by banking mergers that moved the headquarters of the old Bank of Baltimore and Maryland National Bank out of the state, leading to mass layoffs.

"Insurance is doing pretty well," Mr. Conte said, pointing mostly to midsize insurers. The city is also headquarters to four large securities firms that have grown strongly during the bull market. He said those trends helped to offset layoffs that followed the bank mergers, as well as downsizing by USF&G Corp., the city's biggest insurance company.

What sectors grew? Service employment rose by 1,067 jobs, and now more than one of every three city-based jobs is in that sector. State government added 1,050 jobs, and local government added 17 jobs.

Richmond lost 4 percent of its private-sector jobs, but was buoyed by gains in state and local government hiring. Richmond's biggest job losses came in manufacturing (12 percent, or 3,340 jobs) and finance (15 percent, or 2,648 jobs). Washington lost more than 9,200 federal jobs, or 4 percent of its U.S. workers, and more than 6 percent of its local government work force.

Reaction from Baltimore's newly appointed economic czar was muted. Roger Lipitz, named last week as chairman of Baltimore Development Corp. (BDC), said he had not seen the report but noted that many retailers have continued to have serious financial problems well after the 1990-1991 recession ended.

Mr. Conte said solutions to the job losses include moves such as cutting the city's personal property tax, which burdens the wholesale trade industry, and reorganizing BDC. But he said the city should also consider bolder efforts, including a revival of the "Dollar Homes" program and tax abatements.

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