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UMD Report: Education, Infrastructure and Affordable Housing Key to Maryland’s Economic Growth

March 26, 2015
Contacts: 

Maggie Haslam 202-258-8946 

COLLEGE PARK, Md.—A new report released this week by the University of Maryland’s National Center for Smart Growth states that while Maryland boasts a strong economic foundation, it must respond to 21st century challenges—like aging infrastructure, a diverse population and regional economic disparities—if it wants to ensure long-term economic success. The report, “Beyond Smart Growth: An Economic Development Strategy for 21st Century Maryland,” suggests a path for the State of Maryland’s role in continued economic growth, including what many economists claim is critical to long-term economic prosperity: addressing economic, social, and environmental challenges—the triple bottom line.

The report, which is the culmination of a three-year study funded in part by the Surdna and Abell Foundations, reviews economic trends and presents forecasts for the state’s population, employment, industrial structure and “factors of production” as the basis for its recommendations.  According to the report, Maryland leads the nation in many economic indicators, including a stable economic base, a resistance to economic downturns, and has consistently experienced lower unemployment and generally high incomes.  Although it is emerging from the great recession rather slowly, the state’s cumulative growth in the GDP exceeds the national average by 20 percent. 

Yet, Maryland is not immune to the larger social and environmental trends affecting states across the nation. Social indicators have generally stayed flat. While wages of top earners (at the 90th percentile) have grown to exceed their pre-recession levels, real wages for most households have continued to decline. Income inequality has increased markedly over the last decade, with high poverty rates seen in the state’s most vulnerable populations: the unemployed, disabled, Hispanic and female-headed households. Over the past decade, Maryland has also become one of the most racially diverse states in the nation; minorities comprise almost half the state’s population, making it sixth in the nation in minority population share. While the report does not offer a comprehensive environmental study, it points to declining environmental indicators, mostly due to climate change and increased population. Congestion is a looming issue; the amount of time commuters spend in traffic is expected to grow 80 percent over the next 15 years.

“The State of Maryland still has one of the strongest economies in the nation,” said Gerrit Knaap, Director of the National Center for Smart Growth and primary investigator of the report. “But unless the state prepares tomorrow’s workforce, provides them with affordable housing, and enables them to get to work in reasonable time, the state will lose it competitive advantage.”

Researchers suggest Maryland should capitalize on its strengths—such as its proximity to the federal government, an extensive transit system, fast-growing industries like heath care and professional services, and a resilient economy. In addition to improving it tax and regulatory climate, state officials should support diverse and emerging industries to keep Maryland competitive. The state should target spending and transportation investments to the 23 job centers located within the state to connect Maryland’s workers with employment and increase worker productivity.

Most importantly, the report stresses, unless low-income residents are provided access to opportunity, the state will help sustain a cycle of poverty and inequity. The report recommends developing strategies that embrace and meet the needs of the state’s diverse population, offering pathways to education and workforce training and that remove barriers to affordable housing in high opportunity areas.

“This report doesn’t challenge ongoing efforts at tax and regulatory reform, efforts that will surely give the state’s economy a boost,” says Knaap. “Our message is more that the state shouldn’t lose sight of the long run, and the long-run challenges are less a matter of business climate, and more a matter of workforce development, congestion mitigation and maintaining housing affordability.  It is important to not let short term economic growth come at the expense of rising inequity and diminished environmental quality.”

“Beyond Smart Growth” follows a series of studies done by the center on economic development in the state, including a 2012 report on economic and demographic trends, two 2014 reports that identify 23 “job centers” in the state and a report earlier this month examining the state’s poor. These studies are the result of a Sustainable and Equitable Economic Development (SEED) grant in 2011 from the Surdna and Abell Foundations.

The full report can be found on the National Center for Smart Growth’s website