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Regional Matters

February 26, 2020

Maryland’s Sluggish Payroll Employment Growth

Every month the Bureau of Labor Statistics releases estimates of payroll employment for the preceding month for the United States, for all 50 states, and for 450 major metropolitan areas. These estimates come from a survey of about 142,000 businesses and government agencies that represent roughly 689,000 worksites. They provide a useful snapshot of the health of local, state, and national labor markets and enable useful comparisons among these markets.

In the long recovery period since the Great Recession, Maryland’s employment growth has mostly lagged the nation as a whole. In fact, Maryland’s employment growth fell below the United States’ beginning in February 2011 and has continued to lag up to and including the most recent data available for January 2020. (See chart below.)

From a historical perspective, it is important to note that Maryland’s employment growth did not need to recover to the same degree that the national labor market did since it was spared some of the worst effects of the last recession. The chart above also shows that the decline in employment growth during the last recession was not as long or severe in Maryland as it was in the United States as a whole. Maryland’s negative year-over-year employment growth lasted from June 2008 to June 2010, while the nation’s lasted from May 2008 until September 2010. And the largest negative growth rate reported for Maryland was -3.3 percent in July 2009, compared with -5.0 percent for the United States in that same month.

Maryland’s slower employment growth can also be viewed by major industry types. The chart below shows the percentage growth in total employment in both Maryland and the United States between February 2010 – when total employment was at its lowest point after the recession – and December 2019. The industry categories are sorted by the share of total employment in Maryland in December 2019, with the largest share (government employment) at the top and the smallest share (manufacturing employment) at the bottom.

Although employment in government grew faster in Maryland than in the United States during this period, the growth rate was relatively low compared with other industry categories. Industries where Maryland had similar growth rates to the United States were education and health services and leisure and hospitality. Every other category shows Maryland’s employment growth lagging relative to the United States. In short, the small boost from government employment and the relative parity in education and health services and leisure and hospitality was not enough to counter deficits in other industry categories.

In addition to industrial composition, there are other angles from which to view Maryland’s slower employment growth. For one, the size of the state’s population has grown more slowly than that of the United States, so not as many jobs are required to keep pace. Between 2010 and 2018, the population between the ages of 18 and 64 grew by 1.6 percent in Maryland versus 3.6 percent in the United States overall. The education, skills, and experience of the workforce can also play a role, as could the prevalence of cities, which have seen faster employment growth than rural areas. Whatever the cause, the last few months have shown Maryland’s employment growth narrowing the gap with the United States overall, which bodes well for the state of the economy moving into 2020.


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Views expressed are those of the authors and do not necessarily reflect those of the Federal Reserve Bank of Richmond or the Federal Reserve System.

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