By Erin Cox. Washington Post Jan 4th 2024
Maryland’s economic woes predate the pandemic and “serve as flashing yellow lights for the state’s fiscal health,” according to a first-of-its-kind economic analysis released Wednesday by Comptroller Brooke E. Lierman’s office.
The report, written by state economists and policy researchers, delves into the seeming contradiction in Maryland’s economic indicators: The state has the nation’s lowest unemployment rate and highest median income, but it has barely grown since 2016 as the nation’s economy experienced a double-digit expansion.
The analysis found that Maryland lost lower- and middle-income workers to places with cheaper housing, and that a larger cohort of women left Maryland’s workforce compared with other states. The population growth sputtered a few years before economic and wage growth stalled in 2017, the study found.
“Private sector job growth has been stagnant. People are moving to Maryland from states with higher costs of living, but more Marylanders are moving away to states where cost of living is even lower,” Lierman (D) wrote in a letter accompanying the report.
The 110-page document doesn’t prescribe policy solutions but focuses attention on the state’s affordable housing problems and lack of access to child care at a time when Maryland leaders are scrutinizing weaknesses in the state economy.
Maryland’s state government faces budget gaps that are projected to widen from $761 million next fiscal year to $2.7 billion four years later. The Democrats who dominate the state government are looking for ways to raise hundreds of millions of dollars annually to pay for their priorities, particularly a sweeping education plan and transportation projects.
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Gov. Wes Moore (D) began publicly sounding alarms this past summer, as Lierman’s report was underway, saying that Maryland’s “economic engine does not support our ambitions.” His own economic council, created in June, is expected to release an analysis within the next few weeks.
Lierman’s analysis used publicly available economic data as well as interviews with residents and business owners to build what she called an audit of the state’s economic performance that also “illustrates the experience of Marylanders as they navigate an evolving economy.”Share this articleNo subscription required to readShare
Among the more striking observations: 100,000 women have dropped out of the workforce since the pandemic, most of them at a peak working age and at a rate at least twice as high as the national average.
Between 2019 and 2021, 2 percent of women ages 16-24 and 25-34 dropped out of the labor force in Maryland. Nationally, these figures were 1 percent for women under 25 and 0.4 percent for those 25-34. Part of the explanation, the report says, is that industries that disproportionately employ women were hardest hit by the pandemic. But at the same time, child-care costs rose dramatically in Maryland, complicating the math for mothers considering returning to the workforce, Lierman said.
Between 2019 and 2023, the average annual cost of child care increased by at least 14 percent and as much as 30 percent, the report found.
“If women do not return to the labor force, Maryland’s labor pool will remain shallow, making it difficult for employers to fill jobs and for the state’s economy to grow,” the report said. In an interview, Lierman added that “if businesses cannot hire the employees and the team members that they need, then it’s even more difficult for the private sector to grow.”
Among the other findings the report highlighted:
- From the fourth quarter of 2016 to the first quarter of 2023, Maryland’s gross domestic product grew 1.6 percent. The U.S. GDP grew 13.9 percent during the same time. Neighboring Virginia’s grew at 11.2 percent and Pennsylvania’s at 6.6 percent during the period.
- Nationwide there are 1.3 job openings for every job seeker; in Maryland there are 3.1 job openings.
- Part of that mismatch is because fewer people ages 25 to 44 are seeking work. Disproportionately, those people are women. “While labor participation of both men and women has fallen in Maryland, the decline among women has been relatively larger compared to the nation, most census regions, and most neighboring states,” the report says.
- Survey data gathered by researchers “indicate that household responsibilities such as childcare and health issues are contributing factors especially for women opting to leave the traditional labor force,” according to the report.
- Opioid use has contributed to lower participation in the labor market.
Lierman said she launched the report in order to synthesize multiple government data sets and use the expertise of economists and policy workers in the comptroller’s office to help define the problems facing the state.
“I believe the information that we have in the agency is incredibly powerful and fascinating,” Lierman said. “But if we don’t bring it to the public in a way that is understandable and usable, then you know what? What good are we doing?”
https://www.washingtonpost.com/dc-md-va/2024/01/03/maryland-economy-lags-women-workforce/