What if port disappeared?

Impact: How many people would be out of work if the port disappeared? A study finds that the economic effect would be enormous but difficult to quantify.

June 06, 1999|By Robert Little | Robert Little,SUN STAFF

State officials have figured out how many people owe their jobs to the port of Baltimore: somewhere between 6,500 and 126,700, depending on how you do the math.

As stark as the differences are, determining the port's economic impact means more than a potential ego boost for those whose livelihoods depend on the commerce of the waterways. It could mean a lot of money.

The Maryland Port Administration commissioned an economic impact study this year to provide ammunition to use in Annapolis, where a few thousand jobs in economic impact can translate into a few million dollars in additional state funds.

And while the findings released last month suggest that the port's impact on the state's economy reaches far and wide, they also underscore how difficult measuring that reach precisely can be. The number of people who service ships and handle cargo is in the thousands; the number of jobs related to the industry could be 20 times that. Or somewhere in between.

"It might seem like sleight of hand, but it's not," said Maryann Feldman, an economist with the Institute for Policy Studies at the Johns Hopkins University, who reviewed the study. "It's a well-established methodology.

"Certainly, it's always hard to imagine what things would be like if the port of Baltimore didn't exist. But there are ways to answer the question."

The survey is the most detailed yet of the effects of commercial shipping on the state's economy. It was conducted by Pennsylvania economist John C. Martin, and began with telephone surveys of 247 Maryland businesses that work in the port. They included stevedores, freight-forwarding companies, trucking companies and other employers.

According to the survey, the number of employees working for companies that supply maritime services -- Longshoremen, steamship agents, chandlers, bay pilots and the like -- is about 6,500.

But those aren't the only jobs that would be lost if the port went away. About 7,000 people work for companies that rely on the port to stay in business, and another 3,900 work for trucking companies and railroads that move the port's cargo.

Combined, those workers amount to 17,733 "direct jobs" associated with the port, the study says. Take the port away, and those jobs are lost. The number is down about 300 jobs from a survey conducted seven years ago.

The impact runs deeper; all of the waitresses, auto mechanics, schoolteachers or homebuilders that those workers underwrite would also lose their jobs if the port disappeared. Add them -- 11,312 "induced jobs" -- and you have 29,045 people working courtesy of the port of Baltimore.

There's more. The employers in the port hire janitors and lawyers, and they use banks and pay for heat and air conditioning and buy office equipment. That creates 14,588 "indirect jobs" related to the maritime trades. Combined impact: 43,633 employees.

And if you consider all the industries that are in Baltimore because of the port -- the manufacturers, the warehouses, the importers and exporters -- the ships sailing into Baltimore every day account for another 83,100 "related jobs."

The total number of direct, induced, indirect and related jobs associated with the port of Baltimore is about 126,700, according to the study. That's nearly 6 percent of the state work force.

Probably an exaggeration

It's also probably an exaggeration, Maryland port officials acknowledge.

The further economic studies stray from estimating direct employment -- a number determined by a physical count through employer surveys -- the less reliable the estimates are, they say.

Those 83,100 related jobs, for instance, could be with companies that would feel very little effect if the port shut down.

The study found that most of those jobs are with manufacturers or other businesses that use the port for shipping cargo in steel containers. Those businesses could use trucks or trains to ship their cargo through other ports.

But the estimates aren't pulled out of a hat, they are a product of detailed economic analysis.

After the number of direct jobs is calculated, induced jobs are determined by calculating how much those people would typically spend in a year. Indirect jobs are calculated based on how much the employers spend in a year.

And related jobs are determined using a formula that calculates the value of commodities shipped through the port and estimates how many jobs that value supports.

For instance, analysts determined the number of coal mining jobs required to produce a ton of coal and compared it with the annual coal shipments through the port.

`Pretty bulletproof'

"It's pretty bulletproof," said Martin, who conducted similar surveys for the port in 1979, 1987 and 1992, and has conducted them for more than 80 ports nationwide. "When you have to go to the legislature and ask for $200 million, you better make sure that you're not blowing smoke."

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