More pink slips Layoffs at Jos. A. Bank show why economic development must be varied.

November 16, 1995

JOS. A. BANK'S decision to eliminate about 100 jobs at its Hampstead plant just made Carroll County's uphill economic development struggle that much steeper. Attracting jobs has not historically been a priority for this suburban-rural county, but that is changing as it becomes harder to preserve existing positions.

American industry is going through a cycle where companies regularly slash payrolls to improve their financial returns. The list of Fortune 500 companies that have eliminated tens of thousands of jobs across the nation continues to grow. Local companies are not immune to the practice. In recent times, Black & Decker closed its county plant, Telemecanique vacated Maryland and Londontowne Corp. has cut back its sewing jobs.

Bank, the county's eighth largest employer with 425 workers, wants to reduce its cost of production, and laying off employees is the quickest way to achieve those savings. The company has determined that buying sports coats and jackets from other manufacturers is much less expensive than sewing them at the 35,000-square-foot Hampstead plant.

This strategy may be good for Bank, but unfortunately it is devastating to its workers. With few large clothing manufacturers left in Carroll, many of these displaced employees will have a tough time finding similar work.

The layoffs from Bank will ripple through Carroll's economy. Most of the affected households will spend less money, hurting retailers from the grocery store to the shoe store. Carroll's unemployment rate hasn't changed much, but there are a high percentage of residents who must commute outside the county to work. That gets increasingly more difficult for lower-paid workers who get laid off.

While the goal of Carroll's economic development effort is to attract fast-growing, cutting-edge technology companies, it also must entice other less flashy businesses that could use a talented pool of skilled and semi-skilled workers. With manufacturers fleeing to low-wage states or even other countries, it is difficult to compete for these jobs. Local incentive packages with subsidized financing and tax abatements have to be quite attractive to fend off the allure of cheap labor. Indeed, these are tough times for local economic development.

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