Maryland’s Low Unemployment: Good for Workers, Bad for Employers

For the third month in a row, Maryland has had the lowest unemployment rate in the country. As Marylanders find work, there aren’t enough job seekers to fill vacancies in some field.

Maryland’s unemployment rate fell to 1.7 percent in October, less than half of the national average of 3.9 percent. North Dakota had the next lowest rate at 1.9 percent. Additionally, the Baltimore metro area recorded the “lowest jobless rate of any large metro area nationwide” in the most recent regional national labor report. The area’s unemployment has been below 2% every month since June, settling at 1.8 percent in September.

While Maryland’s low unemployment rate is great for workers, according to The Baltimore Sun, it’s posing a challenge for employers who continue to have vacancies while there are fewer job seekers looking for work. From the reporting:

But such extremely low unemployment poses real challenges for many employers and businesses, especially for those seeking high-wage professionals or in-person workers in health care, construction trades, hospitality and restaurants.

…

That can mean that growing firms are more likely to expand in other parts of the country or even leave the region, he [Anirban Base] said.

The reporting continued:

In recent months, however, job openings in Maryland have increased. The number jumped to 184,000 openings in September, up from 165,000 in July, and there are now more than three jobs available for every unemployed person. That disparity has plagued employers, with labor shortages in the state exacerbated by a mismatch in terms of worker skills and employer needs versus worker demands.

For example, at Maryland hospitals, “nearly one in five nursing positions are vacant” and “turnover rates are high, ranging between 26% and 41%, for registered nurses, licensed practical nurses, and nursing assistants.”

What’s going on?

According to the Baltimore Sun report, decreasing participation in the workforce explains the trend of low unemployment and simultaneous difficulty to hire in certain fields.

The labor force in Maryland dwindled in the wake of the coronavirus pandemic, with working people leaving the job force in droves. It still hasn’t recovered and the slow recovery in Maryland lags that of other states.

Just before the pandemic, in December 2019, Maryland’s labor force participation rate — the share of the working age population aged 15 to 64 working or seeking a job — was 69.2%, U.S. Bureau of Labor Statistics data shows. As of October 2023, that rate was 65.2%.

There are several reasons why Marylanders may not have returned to the workforce post-pandemic, according to the report:

  • Large numbers of Marylanders were or are at or close to retirement age;
  • Federal employees, a large employer in Maryland, may be able to count on pensions to allow them to retire or retire early and to avoid having to go back to work;
  • In a relatively affluent state, many workers may be financially secure enough to leave the workforce altogether; and
  • Job seekers may be moving to regions with stronger economies, lower income taxes, and more available and affordable housing.

Read the full article.

At the MACo Winter Conference session, “Closing the Gap: Filling Vacancies, Fostering Workplace Cohesion,” county and state leaders will examine challenges in hiring and retaining the next generation of county government public servants and how to foster workplace cohesion between the “old” and “new” generations.

Learn more about MACo’s Winter Conference: