Wage growth un­der­scores state’s ur­ban-ru­ral di­vide

East of Susque­hanna River un­changed from level in 2006

The Washington Times Daily - - METRO - BY ZACHARY MELVIN

Re­cent months have brought a spate of pos­i­tive eco­nomic news, sug­gest­ing to many economists that Amer­i­can in­dus­try is fi­nally start­ing to pick up again af­ter a long, post-re­ces­sion han­gover.

Unem­ploy­ment is hold­ing steady at or slightly below 5 per­cent, the de­cline in la­bor force par­tic­i­pa­tion ap­pears to have slowed in the last year and the Cen­sus Bureau’s Amer­i­can Com­mu­nity Sur­vey found fam­ily in­come rose 5.2 per­cent in 2015, the fastest rate on record.

Parts of Mary­land are cer­tainly feel­ing that op­ti­mism. Wages in the Bal­ti­more-Wash­ing­ton cor­ri­dor have been lurch­ing up­ward over the last decade, up 7.2 per­cent since 2006, ac­cord­ing to the Bureau of La­bor Statis­tics’ Quar­terly Sur­vey of Em­ploy­ment and Wages.

But east of the Susque­hanna River, it’s a dif­fer­ent story. Wages are up just 0.75 per­cent, es­sen­tially un­changed from their level in 2006.

Gains in Caro­line County, the Eastern Shore’s lone bright spot, haven’t been enough to over­come tepid growth in nearby Ce­cil, Dorch­ester and Kent Coun­ties, where col­lec­tively wages are still 6.5 per­cent below their 2007 peak.

While the re­ces­sion slashed wages in nearly every Mary­land county — wages fell about 2.1 per­cent statewide between 2007 and 2009 — its toll on the Eastern Shore’s man­u­fac­tur­ing sec­tor was par­tic­u­larly dev­as­tat­ing, said An­gela Vis­in­tainer, Caro­line County’s di­rec­tor of eco­nomic devel­op­ment.

“One of our big in­dus­tries in Caro­line County is man­u­fac­tur­ing, par­tic­u­larly man­u­fac­tur­ers that make these com­mod­ity types of prod­ucts that have low skill pro­duc­tion,” Ms. Vis­in­tainer said. “The re­ces­sion hit man­u­fac­tur­ing hard, and a lot of those busi­nesses were ei­ther lost or have be­come a lot smaller.”

Wages fell for six straight years in Kent County, drop­ping al­most 7 per­cent between 2007 and 2013. In Dorch­ester County, it was five straight years of free fall, equat­ing to a 9.4 per­cent loss. And in Ce­cil County, wages plum­meted nearly 20 per­cent between 2007 and 2011, ac­cord­ing to Bureau of La­bor Statis­tics’ data.

Across the Ch­e­sa­peake Bay, most coun­ties in Mary­land’s ur­ban core man­aged to weather the re­ces­sion well. Wages fell af­ter the fi­nan­cial cri­sis in 2008, but started tick­ing up again within the next two years.

The re­silience of the re­gion largely is ex­plained by the pres­ence of the fed­eral government.

Nowhere is this more ev­i­dent than in St. Mary’s County, per­haps the clos­est par­al­lel to Ce­cil County west of the Susque­hanna. Both re­gions have pop­u­la­tions just over 100,000 and both are about as far from a ma­jor city as a county can be while still fall­ing within its metropoli­tan area.

But St. Mary’s County is home to the Naval Air Sta­tion Patux­ent River. With a work­force of more than 22,000, “Pax River” is the third-largest em­ployer among Mary­land’s 17 mil­i­tary bases.

“Our econ­omy is very closely tied to fed­eral de­fense spend­ing,” said Robin Fin­na­com, St. Mary’s deputy di­rec­tor of eco­nomic devel­op­ment. “Pax River is the sec­ond-most eco­nom­i­cally pro­duc­tive base in the state. Me­dian in­come here is about $88,000, but if we look at the av­er­age civil ser­vant in­come, it’s about $105,000.”

Wages in St. Mary’s County grew 7 per­cent in 2009 alone, a stag­ger­ing out­lier on both a state and na­tional scale.

It wasn’t un­til Congress’ fail­ure to agree on a bud­get in 2013 trig­gered au­to­matic cuts to de­fense spend­ing, known as se­ques­tra­tion, that wages took a hit. De­spite me­te­oric growth early in the re­cov­ery, wages stayed es­sen­tially flat in St. Mary’s County from 2012 to 2014.

“There were some fur­lough days. Con­tracts were de­layed and even can­celed in some cases,” Ms. Fin­na­com said. “Government rev­enues are a lag­ging in­di­ca­tor of our econ­omy and we’re only just now start­ing to see an uptick in that.”

The se­quester high­lighted a need in St. Mary’s County to branch out from the pub­lic sec­tor, ac­cord­ing to Ms. Fin­na­com. De­pend­ing solely on funds from a Congress in­creas­ingly re­sis­tant to pass­ing much of any­thing sim­ply isn’t a sus­tain­able strat­egy, she said.

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