Private workforce losses show economic decline in Montgomery County
Montgomery County’s long economic decline is accelerating, and if residents and businesses aren’t alarmed yet, they should be.
Despite an educated workforce, proximity to the nation’s capital, and several large private employers, the county’s value proposition to businesses in the market for new locations or considering expansions does not help the county. to grow or maintain its share of regional jobs in industries and occupations that pay high wages.
These jobs are important to the county’s ability to fund essential government services that the community needs and expects.
The county executive’s instinctive negative response to a report (“Elrich blows up county economy report; others say it raises concerns,” July 1) is disappointing, but unsurprising. This county executive has spent decades articulating and advancing an imperfect approach to economic development and land use planning, and the results speak for themselves.
Federal economic data shows a county that is irrelevant to private sector decision makers investing in businesses, buildings and jobs.
For the five years from January 2016 to December 2020, the county has in fact lost 514 (or 0.5%) jobs in the professional and commercial services industry (Code 1024 of the North American Industry Classification System).
Across the river Fairfax County gained 10,939 jobs (5.2%) in this same industry. This is an astonishing difference for two counties so close geographically and similar in many ways.
Looking more closely at the economic data from 2019 to 2020, Montgomery County lost 4.0% of its Professional and Business Services jobs.
You might think that these numbers simply describe the economic effects of the pandemic, but you are wrong. The number of jobs in this well-paid industry decreased only 0.5% in Fairfax County and increased 4.1% in Arlington.
The trend lines are consistent with what has generally been going on for years, but the fact that such a big divide is evident during the pandemic should be a wake-up call.
During times of economic contraction or uncertainty, many companies are implementing efficiency improvements and cost-cutting measures that they reserved when the future looked brighter and revenues were solid.
These measures include reducing the real estate footprint, increasing investment in technology and automation as labor substitutes, and making strategic decisions to invest resources in lower tax environments.
In addition, the type of businesses that are growing and expanding in the region are increasingly choosing other locations.
Amazon has a footprint of over 11 million square feet in the region, very little of which is tied to HQ2. Montgomery County has less than 100,000 square feet (0.9%) of this total.
Likewise, Microsoft has nearly 2.8 million square feet in the region, with 53,000 (1.9%) in the county.
Facts, as they say, are stubborn things. And the facts about the Montgomery County economy should be of concern to all residents and businesses in the county.
The data underscores an urgent need to address the county’s economic challenges. Failure to do so could have lasting consequences.
While incentives may not be the only tool the county uses, they are the tool that will have the greatest impact on the strategic decisions companies currently make about how and where to invest their resources. The county can choose to establish a set of policies and practices that will turn this crisis into an opportunity, and now is the time to do so.
Jacob Sesker is a regional economic policy expert and a former senior executive with Montgomery County Council, the Montgomery County Economic Development Corporation, and the Montgomery County Planning Department.
Editor’s Note: Empower Montgomery, a 501-c-4 nonprofit, hired Sesker’s firm, Harpswell Strategies, to conduct a study on the economy of Montgomery County. David Blair, who is running against Marc Elrich for the county executive, is a former member of Empower Montgomery.
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