A tale of 2 Marylands

Listen to this article

CAMBRIDGE — A Baltimore-based economist Monday called on state and local economic officials to address a growing economic gap among jurisdictions in Maryland.

“There’s this notion of one Maryland,” said Anirban Basu, chairman and chief executive officer of Sage Policy Group. “I’ve always viewed it as a fiction but what I am suggesting to you is that it’s becoming more fictional each and every passing year.”

Basu, in a speech to the Maryland Economic Development Association, cited a growing economic gap between urbanized counties he referred to as “federal Maryland” and rural Eastern Shore and Western Maryland counties and Baltimore city. His cautionary presentation was part of a two-day annual summit on economic development with a focus this year on technology and innovation.

“My very strong sense is the amount of inequality in our state is going to grow, is going to expand,” Basu said.

Attempts by the state to fix the growing economic inequality, such as minimum wage, fall short of the mark, he said.

“Does this really address the problem” Basu said, speaking of the recent increase to $10.10 approved by state legislators. “I would suggest that it does not. Who can better afford (to pay) a $10.10 minimum wage? An employer in Howard County or Anne Arundel County or an employer in Somerset County or Allegany County?”

“Where are you going to get more job destruction as minimum wage goes up?” Basu said. “My guess is the rural counties.”

Basu said that job destruction will occur in counties that already are hardest hit by high unemployment. On the Eastern Shore and Western Maryland, the unemployment rates outpace the state’s rate of 5.9 percent in March.

In a Monday morning session on best practices from other regions, experts spoke about the importance of fostering and developing so-called innovation districts for researchers and entrepreneurs. But the creation of those districts have limits.

“Not every place is going to have an innovation district,” said Jennifer S. Vey, metropolitan policy project fellow at The Brookings Institution. “Having said that, there’s usually seeds of something in more rural areas that can be a real opportunity.”

Basu said later that one possibility for rural Maryland is to find ways to lure manufacturing to places like Somerset and Allegany counties. He cited the case of Airbus moving a manufacturing plant to Mobile, Ala., and the resurgence of manufacturing in rural upstate New York.

“The economics of rural New York state are the economics of rural Maryland,” Basu said. “Why can’t we mimic? You talk about mimicking best practices, there’s one.”