Maryland May See More Than 114,000 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.”
The National Institutes of Health (NIH) headquarters in Bethesda would likely see many of these cuts, particularly in medical research. It’s the largest employer in Montgomery County, with 17,997 federal employees, according to the state’s Department of Business and Economic Development.
According to the report, about 617,449 federal jobs are at risk 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.
David Iannucci, a spokesperson with Prince George's County executive's office, said that with their large federal presence, Montgomery County and Prince George's County, as well as all the jurisdictions in the metro area, are especially at risk for the fiscal cliff.
"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.
Additionally, the company with the second-highest number of employees in the county is the Walter Reed National Military Medical Center—with about 11,000 employees—and according to the report, about 48,059 jobs in health care are at risk nationwide.
Maryland’s job loss would rank fifth, says the report, conducted by George Mason University economist Stephen Fuller. Maryland is followed by Washington, DC, 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.
Additionally, 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.