With unemployment nationally continuing to grow, Maryland is doing better than many states.
According to WalletHub, a Washington, DC-based personal finance website, the Coronavirus pandemic has eliminated nearly 39 million jobs nationally since mid-March.
In total, 14.7 percent of Americans were unemployed as of April 2020, compared to around 25 percent during the Great Depression.
The good news is that many of these job losses appear to be largely short-term, and Maryland appears to be affected less severely than other states.
Comparing states with the biggest increases in unemployment, WalletHub ranked Maryland 45th, with an April 2020 unemployment rate of 10.1 percent. That reflects a 194.8 percent growth in unemployment compared with the same month in 2019, and a 163.5 percent growth in unemployment since January 2020.
The Old Line State’s numbers are healthier than Virginia’s, currently ranked 33rd with 10.8 percent unemployment.
Nevada, the top ranked state, now experiences a nearly 30 percent unemployment rate, a 608 percent increase compared with last April and 609 percent compared with January 2020.
In terms of states seeing the biggest increases in unemployment claims due to the Coronavirus, Maryland ranked 14th during the week of May 13th and 23rd in terms of the states that have been most affected since the start of the COVID-19 crisis.
Still, that’s a nearly 1,165 percent increase in unemployment claims during the second week in May compared to the same week in 2019.
According to the Maryland Department of Labor, the state’s enviable unemployment rate of 3.3 percent in March 2020 shot up to 9.9 percent only one month later.
According to the Howard County Economic Development Authority, more than 28,200 county residents had filed for unemployment insurance or pandemic unemployment assistance since March 7.
More than 57,000 Anne Arundel County residents filed for unemployment benefits during the same period.
Surprisingly, despite its focus on technology and cybersecurity, Maryland only ranked 19th on WalletHub’s listing of states providing the best conditions for working from home.
With a high population of military and defense contractors and government agency workers, restrictions pertaining to classified information may play some role in the ability to work from home, but, for obvious reasons, that remains speculative.
Delta Associates, a research firm focused on the commercial real estate industry, noted in its April 27 Baltimore Metro Area market report that 2020 began with a strong first quarter, but rent growth and absorption is expected to turn sharply negative with vacancies increasing in most submarkets in the period ahead as demand collapses.
“Over the longer term, we believe that the current pandemic will cause office owners, developers, and users to rethink how they provide and consume space,” the report stated. “For tenants, we believe the ongoing – but slowing – shift to dense, open work spaces will either reverse or come to a halt. However, this will probably have a limited effect on occupancy since it may be offset by a marked increase in teleworking.”
The report went on to state that the expansion pace of coworking in the Baltimore Metro Area has been relatively slow and is expected to be even slower in the future if it continues at all.
As for businesses themselves, many will require a COVID-19 Pivot Plan to implement a restart as the state enters Stage One of Gov. Larry Hogan’s Roadmap to Recovery.
Mark Kleinschmidt, president and CEO of the Anne Arundel Chamber of Commerce, led an online discussion in April focused on strategies that businesses can use to make the transition less painful.
“The biggest thing impacting businesses is clearly cash flow,” Kleinschmidt said, adding that it will be hard to predict the operating revenue that businesses will be able to realize once they reopen as a result of social distancing requirements and other limitations on businesses.
Decisions on whether to open schools in September or delay their opening will also impact employees and customers, he said.
Businesses that rely on seasonal traffic will also have challenges that year-round businesses don’t contend with, Kleinschmidt said, adding that the Chamber has developed a seven-step COVID-19 Cash Flow Triage process that is available for businesses on its website.
“We’re building a bridge to the new normal, and that’s going to be a very challenging time period,” he said, as businesses begin to get their finances in order and gain a better understanding of new safety standards and regulations.
Some companies might have to brainstorm new products and services to stay relevant, Kleinschmidt said, or consider doing things differently to generate new sources of revenue.
“This is a great time to do a digital audit … and think differently about how you’ve used social media,” he suggested. “The other thing is to look for is best practices … to make customers feel safe. A company like Disney will show us ways to do it that will not be threatening and maybe even somewhat entertaining.”
One of the biggest concerns on the other side will be staffing levels.
“You may be looking at layoffs or maybe not bringing people back … and some employees may have found other opportunities,” Kleinschmidt said, adding that legal representation and insurance coverage are areas that shouldn’t be overlooked.
“Seek out partners to expand your market and potentially lower costs … and put together a pivot plan,” he said. “We are truly moving into uncharted water and plans are everything.”
By George Berkheimer | Senior Writer | The Business Monthly