Md. manufacturing job losses outstrip most of U.S.

State could reverse long-running shrinkage, advocates say

  • The site of the former Solo cup manufacturing plant will become a new shopping center.
The site of the former Solo cup manufacturing plant will become… (Barbara Haddock Taylor,…)
November 17, 2013|By Jamie Smith Hopkins, The Baltimore Sun

The General Motors factory in Baltimore, the Solo Cup plant in Owings Mills and the steel mill at Sparrows Point all made things for decades. And all closed in the past 10 years.

It's a familiar tale for much of the country. But Maryland's manufacturing job losses — the result of cutbacks, shutdowns and technological innovations requiring fewer people — are among the nation's steepest.

The state saw a faster pace of job reductions in the sector than all but seven other states and the District of Columbia in the past six years, according to a Baltimore Sun analysis comparing the most recent Labor Department figures with the period just before the recession.

Maryland has lost 25,000 manufacturing jobs — nearly 20 percent of its base — since August 2007. It hasn't enjoyed even the partial rebound the United States as a whole saw after deep declines.

The problem isn't new. Maryland has shed manufacturing jobs since the 1970s. Since 1990, it has lost more of them than all but four states and the District of Columbia, part of a deindustrialization that hit the entire Mid-Atlantic region harder than much of the country.

Advocates say it's not too late for Maryland to rewrite this story line and rebuild its manufacturing base, perhaps by focusing on high-tech niches. They warn that people without a college education — and some with one — have been harmed by the long shrinkage.

"Manufacturing was steppingstones to middle-class America," said Mike Galiazzo, president of the Regional Manufacturing Institute of Maryland, a nonprofit advocacy group. "When we lose manufacturing, that just means nobody's knocking on the door to Bethlehem Steel, they're knocking on the door to Walmart."

As the state reliably added jobs over the decades in such fields as information technology, health care and government contracting, it was easy for state leaders to shrug off losses in manufacturing as inevitable, even acceptable. That appears to be changing: Last year the state convened a commission on manufacturing competitiveness, which is due to make recommendations next month.

Industry was once a linchpin of Maryland's economy. In 1912, The Baltimore Sun reported that Maryland had more manufacturing plants than all but 14 states. Manufacturing accounted for one-third of the jobs in Maryland just before World War II engulfed the country — and nearly half the state's jobs at the height of war production.

The losses in more recent decades are part technology-driven — machines enable one worker today to accomplish what it took several or many manufacturing workers to do years ago — and part geographic shift. Every state in the Mid-Atlantic, from New York to Virginia, saw cuts in the past quarter-century that outpaced the country as a whole.

American auto companies consolidated, favoring Midwestern and Southern locations, said Howard Wial, director of the Center for Urban Economic Development at the University of Illinois at Chicago. The region's steel mills — such as Sparrows Point — were buffeted by newer "mini mill" competitors in the South and Midwest and by foreign producers.

Other manufacturers moved south for lower wages and taxes, cheaper land and less regulation. And some sent production out of the country.

This happened to Mid-Atlantic states both blue and red, ones (like Virginia) that do well on business-climate rankings and even those (like Delaware) considered relatively low-tax.

Still, Michael Hicks, director of the Center for Business and Economic Research at Ball State University in Indiana, says Maryland does itself no favors with its tax rates. In a 2013 state-by-state score card, he gave Maryland a "D" for both its manufacturing health and its tax climate.

"Firms vote with their feet," he said. "Manufacturing is one where people can easily vote."

While he acknowledged that the state's well-educated workforce is a plus, companies are more likely to employ labor-saving technology in higher cost, higher-educated areas. He thinks that explains part of the region's losses in recent years.

"All the productivity gains in manufacturing are designed to kill jobs," Hicks said.

But Wial doesn't see job loss as the final result of innovation. He thinks it would be well worth Marylanders' time to help manufacturing flourish.

"Don't assume that just because factories are more automated that that limits manufacturing job growth in the future," he said. "What has usually happened in the past is that automation reduces the cost of the product and enables the market to expand."

Wial is also a nonresident senior fellow at the Washington-based Brookings Institution, which has called on the Baltimore region to increase manufacturing as part of a strategy to expand middle-class jobs. Brookings warned that low-wage fields account for a growing share of area employment.

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