Private workforce losses show Montgomery County’s economic decline

Montgomery County’s long economic decline is accelerating, and if residents and businesses aren’t alarmed just yet, they should be.

Despite a well-trained workforce, proximity to the country’s capital and several large private employers, the district’s value proposition for companies in the market for new locations or the consideration of expansions does not help the district, its share of regional jobs in industries and professions, the high Pay wages.

These jobs are important to the county’s ability to fund the vital government services that the community needs and expects.

The district executive’s knee-jerk negative reaction to a report (“Elrich destroys report on the economy of the district; others say that it gives cause for concern.” July 1st is disappointing, but not surprising. This district chairman has spent decades articulating and promoting a flawed approach to economic development and zoning planning, and the results speak for themselves.

Federal economic data shows a county that is irrelevant to the private sector decision-makers who invest in businesses, buildings and employment.

For the five years from January 2016 to December 2020, the district is actually 514 lost (or 0.5%) Professional and Business Services Industry jobs (North American Industry Classification System Code 1024).

Over the river, Fairfax County created 10,939 jobs (5.2%) in the same branch. That’s an amazing difference for two counties that are so geographically close and similar in many ways.

If you take a closer look at the economic data from 2019 to 2020, so Montgomery County down 4.0% of his positions in Professional and Business Services.

You might think these numbers are just describing the economic impact of the pandemic, but you are wrong. The number of jobs in this high paying industry only decreased 0.5% in Fairfax County and in Arlington up 4.1%.

The trend lines are in line with what has generally been going on for years, but that such a large gap is evident during the pandemic should be a wake-up call.

In times of economic downturn or uncertainty, many companies implement efficiency improvements and cost-cutting measures that they kept in reserve when the future seemed more certain and sales were strong.

These measures include reducing the real estate footprint, increasing investments in technology and automation to replace labor, and making strategic decisions about investing resources in a lower tax environment.

In addition, companies that are growing and expanding in the region are increasingly choosing other locations.

Amazon covers more than 11 million square feet in the region, very little of which is HQ2-related. Montgomery County has less than 100,000 square feet (0.9%) of that.

Similarly, Microsoft has nearly 2.8 million square feet in the region, of which 53,000 (1.9%) are in county.

Facts, as they say, are persistent things. And the facts about the Montgomery County’s economy should apply to all county’s residents and businesses.

The data underscores the urgent need to address the county’s economic challenges. If this is not observed, this can 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 are making about how and where to invest their resources. The county may choose to establish a number of policies and practices that will turn this crisis into an opportunity, and the time is now.

Jacob Sesker is a regional economic policy expert and a past senior manager of Montgomery County Council, Montgomery County Economic Development Corporation, and the Montgomery County Planning Department.

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Editor’s note: Empower Montgomery, a 501-c-4 nonprofit, hired Sesker’s Harpswell Strategies to conduct a study of the Montgomery County’s economy. David Blair, who is running for the district executive against Marc Elrich, is a former member of Empower Montgomery.

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