Maryland Could See Nearly 115,000 Job Losses Next Year

According to a recent report, Maryland is set to lose almost 115,000 jobs next year after federal spending cuts take effect.

If planned federal cuts take place next year, Maryland could lose nearly 115,000 jobs, according to a recently released report by the Aerospace Industries Association.

About a third of the lost jobs in Maryland would come from Department of Defense cuts, and the rest would come from cuts in professional and business services, said the report, entitled “The Economic Impact of the Budget Control Act of 2011.”

In Prince George’s County, it's possible these cuts could effect one of the county’s largest employers, Joint Base Andrews Naval Air Facility Washington, which, according to the state’s Department of Business and Economic Development office, employs the highest amount of federal workers in the county at 8,057 employees. 

David Iannucci, a spokesperson with Prince George's County executive's office, said that with the county's large federal presence, it is especially vulnerable to these types of cuts.

"If these types of cuts were to be implemented it would have a very serious negative effect on the local economy, tax revenue and unemployment," Iannucci, who specializes in economic development, said. 

The county has 17 federal agencies altogether.

Data from ChooseMaryland.org shows that of the top five largest employers in the county, three of them are federal government agencies and could stand to suffer the highest amount job losses. 

According to the report, about 617,449 federal jobs are at risk nationwide when the automatic spending cuts go into effect in 2013, and they’ll cost the U.S. economy about 2.14 million jobs in total, as well as decrease personal earnings of the workforce by $109 billion. 

Maryland’s job loss would rank fifth, the report, conducted by George Mason University economist Stephen Fuller, says, following D.C, which is predicted to lose 127,407 jobs, and Virginia, at 207,571 job losses.

These numbers include losses from both Department of Defense (DOD) cuts and non-DOD cuts and represent direct, indirect and induced job losses resulting from the spending reductions.

Fuller predicts in the report that the reductions will reduce the nation’s Gross Domestic Product (GDP) by $215 billion, while unemployment will increase by as much as 1.5 percentage points, putting the national rate above 9 percent.

In addition, he says collateral impacts, determined by behavioral factors, will also occur.

“The loss of consumer confidence may suppress spending, especially spending requiring credit such as for autos and housing,” he wrote. “Personal saving may increase, taking further spending out of the economy.”

According to Fuller, these collateral impacts, along with the loss of personal income, jobs and GDP, will seriously enlarge the negative consequences of the spending cuts and deepen the economic reduction in 2013. 

“If they are allowed to occur as currently scheduled, the long-term consequences will permanently alter the course of the U.S. economy’s performance, changing its competitive position in the global economy,” Fuller wrote in the summary of his findings.

Fazi Mack July 19, 2012 at 08:31 PM
It clearly indicates a need to help small businesses and new business ventures, get the necessary resources, i.e, free flowing credit and infrastructural help so they can absorb the newly jobless after federal cuts. Instead of throwing in the towel, we need to move forward with allowing the new businesses to exist and become stable.
Lee Havis July 20, 2012 at 10:30 AM
Creating conditions for a free enterprise system to function in Maryland will take some time, and a considerable change of mind-set which has been deeply engrained in the political structure of government for many years. But, reduced federal spending is necessary, and, in the end, everyone will be better off with a more robust climate for free enterprise in the area.


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