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Maryland's economic woes predate the pandemic and “serve as blinking yellow lights for the state's financial 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, examines the apparent contradiction in Maryland's economic indicators: The state has the lowest unemployment rate and highest average income in the country, but has barely grown since 2016 as the country's economy experienced double-digit expansion.
The analysis found that Maryland lost low- and middle-income workers to places with more affordable housing and that a larger cohort of women left Maryland's workforce compared to other states. Population growth stagnated for several years before economic and wage growth stalled in 2017, the study found.
“Job growth in the private sector is stagnating. “People are moving to Maryland from states with higher costs of living, but more and more Marylanders are moving to states where the cost of living is even lower,” Lierman wrote in a letter accompanying the report.
The 110-page document does not prescribe policy solutions but focuses on the state's affordable housing problems and lack of access to child care at a time when Maryland leaders are taking a hard look at the weaknesses of the state's economy Take a magnifying glass.
Maryland state government faces budget shortfalls that are expected to widen from $761 million next fiscal year to $2.7 billion four years later. Democrats, who dominate state government, are looking for ways to raise hundreds of millions of dollars annually to fund their priorities, particularly a comprehensive education plan and transportation projects.
Gov. Wes Moore (D) began publicly sounding the alarm this summer as Lierman's report ran, saying Maryland's “economic engine does not support our ambitions.” Its own economic council, founded in June, is expected to publish an analysis in the next few weeks.
Lierman's analysis used publicly available economic data as well as interviews with residents and business owners to create an audit of the state's economic performance, which she said also illuminates “Marylanders' experiences navigating an evolving economy.”
Findings highlighted by the report included:
- From the fourth quarter of 2016 to the first quarter of 2023, Maryland's gross domestic product grew 1.6 percent. US GDP grew by 13.9 percent over the same period. Neighboring Virginia grew 11.2 percent and Pennsylvania grew 6.6 percent during that period.
- Nationwide, there are 1.3 job vacancies for every job seeker; There are 3.1 job openings in Maryland.
- Part of this disparity is due to fewer people aged 25 to 44 looking for work. These people are disproportionately women. “While labor force participation has declined for both men and women in Maryland, the decline for women has been relatively larger compared to the country, most census tracts, and most neighboring states,” the report said.
- Survey data collected by researchers “shows that household responsibilities such as child care and health concerns particularly contribute to women's decisions to leave the traditional workforce,” the report said.
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