Governor likely to shift priority to job training Urgency evaporates for creating new jobs, business development

The Economy

November 08, 1998|By Jay Hancock

IT'S NOT TOO SOON to survey the economic topography created by Tuesday's election. Like the rest of the country, Maryland seems pointed on a nostalgia trip, a jaunt back to a more moderate, more complacent, possibly wealthier time.

The urgency once commanded by economic development and job growth has evaporated.

Gov. Parris N. Glendening paid them little lip service in the recent campaign. James T. Brady, Glendening's former pro-growth, pro-business economic chief, is not only out of the administration but publicly backed the loser in the governor's race.

Even state income-tax cuts, spawned two years ago from worry over Maryland's business climate, became more of a populist political tool than a commercial one when Glendening proposed speeding them up this year.

It became clearer than ever last week that massive federal job cuts for Maryland are last night's bogyman.

The Perot & Gingrich crew just had a few more bulldozers repossessed in their bid to downsize government. The U.S. government is solvent, if heavily encumbered. Health agencies are building new lab caverns this side of the D.C. line. What hasn't killed Maryland's remaining defense contractors has made them stronger, and the drought in war products seems past its height, even with a more-Democratic Congress.

A fresh local sign of federal bullishness was Glendening's impressive performance in Montgomery County, Maryland's white-collar government nexus. An economically anxious Montgomery gave much more support four years ago to pro-growth Glendening opponent Ellen Sauerbrey than it did this year.

Maryland still has 7,000 fewer federal workers than it did 10 years ago, and 4,000 fewer than in 1996, according to the U.S. Bureau of Labor Statistics. But many of those jobs still exist, having been transferred to the private sector.

And state and local government have made up for the loss. Total government employment in Maryland, including federal workers, has been flat since 1994 but up 22,000 in 10 years. Maryland ranks 14th in the nation in the share of its jobs given to government -- 18.5 percent, according to Regional Financial Associates, of West Chester, Pa.

The government recovery is key. Much of Maryland's economic anxiety and action four years ago seeped out of predictions that the federal locomotive would blow a few cylinders. Now that the fireman is stoking the boiler again, the imperative no longer applies.

HTC But it's also true that Maryland is more diversified, more stable, more resilient, less reliant on importing wealth from Iowans and Kentuckians in the form of federal taxes than it used to be.

Manufacturers across the country are being battered by the Asian crisis, but Maryland now relies so little on manufacturing that it ranks 42nd nationally in its percentage of factory employment -- below Colorado, Arizona and Nebraska. What Maryland factories remain after the massacre of the early 1990s are hardened, high-tech and world competitive.

The slow, lackluster growth that was a political liability for Glendening a few years ago is now something of an economic asset. The 1.5-percent and 2-percent job expansion of the past few years leaves Maryland full but not bloated.

Construction employment, a good bloat indicator, is strong but not too strong. With 6 percent of our work force, we've got 10,000 more construction workers than four years ago -- but 25,000 fewer than a decade ago, and Glendening's "smart growth" strictures will continue to limit the industry's growth.

Contrast Maryland with Nevada, where one in 10 workers is building a hotel, casino, office complex or house. The next recession will not be nice in Las Vegas.

Maryland will continue as one of the southernmost states allowing closed union shops -- a liability in the employer hunt but a factor that will help perpetuate the state's high score in household and per-capita incomes.

Don't expect any computer-chip plants to set up business here soon. Glendening and the General Assembly won't spend the tax incentives to get one. But don't expect any new chip plants in Virginia, Oregon or anywhere else, either. The world has too many chip factories already.

Computer-services, health-care and telecommunications firms are the commercial future on both sides of the Potomac. The firms that care for lower taxes and conservative politics will go to Virginia. The ones that like major-league sports, sailing and a bit of preserved green space will come here. The ones that like casinos and slot machines will go to New Jersey or Illinois.

Glendening won't abandon economic development and job growth. But he seems ready to concentrate not on further tax cuts and regulation reform but on something that is becoming a crucial problem everywhere: worker training.

Employers badly need workers that can handle computers, serve customers competently and function in self-directed teams. Supplying those workers is a legitimate economic development issue. But it's also an education issue, something that a liberal, Democratic professor-turned-governor in a prosperous state won't think twice about making his economic priority.

Pub Date: 11/08/98

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