“SUBSIDIZING THE LOW ROAD”:

Economists Say City Faces ‘Employment Mismatch’

Baltimore City needs to get more bang for its economic development buck, according to economists who point to a lack of accountability on the part of subsidized businesses.

by Russell Henley

Camden Yards generates about $3 million annually in state revenue, but costs the state’s taxpayers $14 million.
Heather Boushey, Ph.D., an economist with the Washington, DC-based EPI, pointed out that the current unemployment rate “obscures the recession’s true depth.”

Ms. Boushey was one of two presenters at a forum called “The State of Working America: Implications for the Low-Wage Workers in Maryland,” held on November 19 at the University of Baltimore. The other speaker was Richard P. Clinch, Director of Economic Development for the Maryland Business Research Partnership.

The event was one of a series of forums convened by Open Society Institute-Baltimore in an effort to generate ideas, spark partnerships, and create solutions to economic problems.

Clinch has found that Baltimore City’s employment figures do not stray much from the EPI’s overall U.S. findings. The city has the highest unemployment rate in Maryland at 7.5%. This is down, however, when compared to 1998’s figure of 9.2%.

Additionally, while the state of Maryland has a 67% labor force participation rate, Baltimore City has a 57% rate. Further, while 16% of Maryland’s workforce has less than a high school diploma, 32% of Baltimore City workers have not earned a diploma.

However, according to Clinch, the city has improved its job gap numbers significantly. In 1997, there were 2.9 job seekers per available job; in 2000, there were 1.8.

Clinch also reported that an “employment mismatch” is occuring in Baltimore City. While it has the highest proportion of unskilled workers, most new jobs being created in the city are professional and technical. The City has the state’s lowest concentration of low-skill jobs at 66%, while the outer suburbs—where such workers can least afford to live—have the highest percentages. According to Clinch, low-skill job openings in Baltimore City are not increasing; when they occur, they are a result of meeting replacement needs rather than due to growth demands.

Despite the current situation, Clinch offered some possible solutions for Baltimore City. The new tourism opportunities such as the waterfront Marriott Hotel and parking garage could add hundreds of low-skill jobs, he pointed out. But generally, he said, low-skilled jobs are not a sector of the economy that is growing.

The picture for higher-wage jobs is much brighter. Other major developments—including, most recently, Tide Point and Montgomery Business Park—all promise to add thousands of new, permanent jobs to the Baltimore area.

Another key issue for Baltimore is linking transportation to the outlying areas of the city, which offer more low-skill job opportunities.

The economists also called for more concentrated efforts to improve education and job training in Baltimore City, so that city residents will be qualified for the better jobs when they become available.

If this training does not occur, Clinch warned, not only will there be few opportunities for those with less education, but they may also find themselves unable to afford to live in the city, as real estate prices can be expected to increase, because real estate prices can be expected to increase as skilled workers move into the city.

Report Is Critical of BDC
A September 2002 report by a national nonprofit called Good Jobs First, called “Subsidizing the Low Road: Economic Development in Baltimore” and authored by Kate Davis and Chauna Brocht with Phil Mattera and Greg LeRoy, was made possible by a grant from the Rockefeller Foundation. LeRoy, founder of Good Jobs First, is author of No More Candy Store: States and Cities Making Job Subsidies Accountable.

The report outlined “pervasive process problems” in Baltimore’s “privatized system for initiating deals”: the Baltimore Development Corporation (BDC). The authors found that taxpayers have little input into the development process in the city, and faulted BDC because its records are secret, exempted from the Maryland Public Information Act.

Among the report’s findings:
The report's recommendations:


Copyright © 2003 The Baltimore Chronicle and The Sentinel. All rights reserved. We invite your comments, criticisms and suggestions.

Republication or redistribution of Baltimore Chronicle and Sentinel content is expressly prohibited without their prior written consent.

This story was published on December 4, 2002.