Revised data brighten Maryland's job picture Employment grew 1.3% in '96, not 0.5%

March 18, 1997|By Jay Hancock | Jay Hancock,SUN STAFF

Maryland added jobs last year nearly three times faster than previously reported, new figures show, boosting the state in national rankings and casting a different light on its maligned economy and legislative efforts to improve it.

Maryland had 29,200 more jobs in December 1996 than it did a year earlier, new data from the U.S. Labor Department indicate. That's growth of 1.3 percent, and it places the state 34th among its brethren.

While Maryland failed to match the U.S. employment expansion of 2 percent in 1996, the new results show that its economy scored far better last year than government statisticians had been saying. Maryland's national rank under the old results was about 45th.

But a top business leader argued yesterday that the new results don't weaken the case for cutting Maryland taxes, streamlining regulations and generally making the state more commerce-friendly.

"While it is certainly better to be 34th than 44th or 45th, we still are not being effective competitors with other states in the region," said Champe McCulloch, president of the Maryland Chamber of Commerce.

Month by month last year, the U.S. Labor Department kept crediting Maryland with job growth of only about 10,000 compared with the corresponding month in 1995. At the end of 1996, the Labor Department said Maryland had only 11,700 more jobs than it did a year earlier -- a thin, 0.5 percent growth. Besides flinging Maryland into the job-growth cellar, the meager results helped stoke widespread complaints about the state's economy as well as proposals for tax cuts -- now under consideration by the General Assembly -- to try improve it. The 0.5 percent rate and the 45th rank have been widely and repeatedly cited.

The revised results "look a lot better," said Mark Vitner, an economist who follows the state for First Union Corp., a Charlotte, N.C., banking company.

"It's almost three times as many" jobs, he added. "Maryland's still lagging the rest of the country, and the reason for that is, we're still losing jobs in the older, manufacturing industries. But we have very strong growth in some of the newer industries -- biotechnology, communications."

By another measure, Maryland performed even better last year. Average fourth-quarter employment in 1996 was 1.4 percent more than in the same period in 1995.

But some argued yesterday that the best gauge of Maryland's economy is not against past reports, or even a national standard, but against nearby states competing for jobs.

"You have to look at all these benchmarks and say: Are we cutting the mustard against our competitors?" McCulloch said.

Maryland is not. According to the new results, its job growth last year trailed that of Pennsylvania (1.7 percent, 27th); Virginia (2.5 percent, 17th); Delaware (2.8 percent, 14th); and North Carolina (3.3 percent, sixth).

"Even though we are showing improvements we need more help in this direction, particularly when we look at our competition" from other states, said Judi Scioli, spokeswoman for Gov. Parris N. Glendening. "We need to get our rate up."

The job-count revisions are part of an annual overhaul based on precise counts of companies' unemployment insurance records. Initial reports stem from less-reliable employer polls. The latest changes are grounded in March 1996 payroll data, and they affect monthly job totals for every state stretching from January 1997 back several years.

Maryland added jobs at a 1.1 percent rate in 1995, the newest report shows, giving it a rank of 40th among states for that year.

Last year wasn't the first that Maryland's economy looked better on the second glance than the first. For the last several years, the Labor Department has initially underestimated Maryland job growth by about 1 percent, missing 20,000 jobs, and economists have expressed annoyance that the results haven't been better.

"I'm just very frustrated," said Charles McMillion, chief economist for MBG Information Services, a Washington, D.C.-based business and economics consultancy. Growth last year of 1.3 percent, he added, "is a hell of a lot better than people thought."

The result is especially impressive given last year's bad winter weather, federal shutdowns and the continued loss of Maryland federal jobs, he said.

Some analysts believe that Maryland did even better than 1.3 percent last year. In March 1996 the state was still recovering from a slow winter, and basing employment revisions on payroll counts from that month may undersell it and miss substantial improvement later in the year, they said.

"We think employment growth was in the neighborhood of 1.5 percent to 1.6 percent," said Mike Funk, an economist with the Regional Economic Studies Program at Towson State University.

Indeed, state tax collections, which correlate closely with the economy, are up substantially. Officials recently boosted estimated state revenue this year by $50 million.

Pub Date: 3/18/97

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