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DOES THE DATA SHOW THAT MARYLAND’S LOWER SHORE IS GOING BUST?


The ongoing recession has impacted the four "lower shore" counties in Maryland to a much greater extent than the rest of the state, and even the counties in the western part of the State that are partly in the depressed Appalachia region. The counties in the central part of the State and in Southern Maryland have not been hit nearly as hard, thanks to the presence of highly paid federal and state employees and defense contractors. In fact, the so-called "metro" counties and those in Southern Maryland have somewhat less unemployment than the statewide average (7.1%), whereas those in Western Maryland and the lower shore average more than 10% with Worcester County having the highest (13.5%) during the first half of 2011.
Some business and economic "experts" such as SU’s Memo Diriker speculate that this is normal – that the lower shore lags behind the general economic trend – but perhaps they should reconsider why things may really be different and much worse this time because of certain longer term trends that are not clearly reflected in the data.

Including Allen Family Foods there now are only five poultry processors on the Delmarva Peninsula, whereas 35 years ago there were more than one dozen. And during that period look at the manufacturing firms that have abandoned Salisbury alone – Dresser-Wayne, Campbells, Comtec, Linens of the Week, to name a few. The effect of this exodus of employers may have been masked until recently by a boom in commercial, institutional and residential construction that has created a glut of unsold and vacant space of all kinds. Unless there is a major change in the broader economy, that condition (and very low growth and development) may continue for longer than just the foreseeable future, especially with the anti-development zoning and other regulations that are planned and being issued by the so-called environmental protectors – EPA, Maryland’s Departments of Planning, Environment, Natural Resources, etc. – and promoted by their acolytes, such as the Wicomico Environmental Trust, that will make future development very costly or impossible to do.

For some years now the poultry industry has been shifting away from Delmarva and expanding in states to the south and west (along with the population). Not only has the consumer market moved, but those who raise or process poultry elsewhere have lower costs of production – and guess who loses every time around in that scenario – as well as much friendlier state regulatory agencies. None of the lower shore counties is among the top twenty producers in the US – Somerset is now the biggest (at 25th) followed by Worcester (26th), Wicomico (36th) and Dorchester (63rd) according to data on DPI’s website. As recently as 1997, Wicomico – then the State’s leader in broilers – was in the top 10 counties in the country, and in 2002, three of the four lower shore counties were among the top 25 in the country. In short, the area is fading fast in its share of the national market and that trend appears irreversible. Were it not for the somewhat greater broiler production in Delaware, primarily Sussex County, there would probably be only a couple poultry processors on the Delmarva Peninsula.

Then there’s the reality that things – taxes, costs, etc. – are better in the states just a few miles away. Even "local" firms like Perdue are now locating/relocating offices in Delaware. In short, Maryland is significantly less attractive as a place to live or to have a business than the neighboring states – another trend that seems irreversible – so the short term picture as well as the longer one is not promising.

Because of special circumstances the central part of Maryland probably will continue to prosper in the long run largely because of its very well-paid governmental work force (state and federal) and quasi governmental employees (defense contractors, major hospitals, etc.) that are a source of greater wealth and growth. Indeed, that aspect of the economy can be seen on the lower shore. The unemployment rate in Wicomico County (8.6%), which has by far the largest governmental presence with both Salisbury University, regional state offices, and some federal offices, as well as the largest health care community, is significantly lower than in Dorchester (10.7%) Somerset (10.3% and Worcester (13.5%) – data from January-June, 2011. Unfortunately, however, the situation in the lower shore counties may be more pervasive and permanent than "experts" such as Dr. Diriker – himself a government employee – would have us believe, especially if government spending by the state is further curtailed. We may have entered uncharted waters – and better sound the foghorn.