Maryland’s Economy Is Making Progress, but Too Many Are Still Locked Out

September 20, 2017 by Christopher Meyer in Blog, Economic Opportunity

Many families in Maryland saw their standard of living improve in 2016, according to census data released last week. At the same time, the damage from the Great Recession is still not fully healed after almost a decade and too many in our state are still struggling to get by. Fortunately, there are policies we can adopt to ensure that everyone shares in Maryland’s economic growth.

An Unfinished Recovery

Typical Maryland families took home $78,900 in 2016, a 3.1 percent increase from 2015 (adjusted for inflation) and the highest median income in the country. For the first time, typical Maryland families had as much purchasing power in 2016 as before the Great Recession. However, looking at individuals’ salaries, as opposed to household income, most workers have not made up all the lost ground, earning $1,700 less in inflation-adjusted terms in 2016 than in 2007.

Too many people in Maryland still struggle to make ends meet. About 568,000 Maryland residents had family incomes less than the federal poverty line in 2016 (about $24,000 for a family of four). That’s about one in 10 residents of the state, the same share as in 2015. There were still 114,000 more people in Maryland who couldn’t afford the basics in 2016 than there were in 2007.

Children are especially likely to face financial hardship, with one in eight living below the poverty line. Children who grow up in low-income families are often less healthy than their wealthier peers and have a harder time succeeding in school. Meanwhile, a growing number of older Marylanders can’t afford the basics – about 10,000 more people over age 65 lived below the poverty line in 2016.Census graph 2017

Unequal Opportunities

Not all Maryland residents are benefitting equally from the state’s economic growth. In some parts of the state, typical families had incomes above $95,000 in 2016. However, typical families in Allegany County and Baltimore City took home less than $50,000. One in five residents of Baltimore City and Wicomico County struggled to afford the basics, including nearly one-third of children in both communities.

With opportunities spread so unevenly across our state, it is perhaps unsurprising that we made no progress last year in reducing the economic barriers facing many Marylanders. Typical Black families took home $25,700 less than White families in 2016, essentially unchanged from 2015. The gap between typical Hispanic and non-Hispanic White families was $20,300, also no better than in 2015. Women working full-time took home $10,000 less than men in 2016, about the same as the previous year.

It doesn’t have to be this way. Policymakers can take meaningful steps to make the economy work for all Marylanders. For example:

  • Give working families a raise. It took nearly a decade for Maryland family incomes to recover from the Great Recession, and workers are still making up lost ground. We can put more money in families’ pockets by raising the minimum wage to $15 and extending the earned income tax credit to the low-income workers it currently leaves out.
  • Enable fuller participation in the workforce. Too many Marylanders struggle to get ahead because of barriers standing between them and good jobs. Parents have a harder time advancing their careers if they can’t afford childcare or can’t care for their kids when they are sick. The same goes for workers who want to gain skills but find college out of reach. The state should address barriers like these that too often lock people out of good jobs.
  • Invest in communities. Building blocks like strong schools and modern transportation networks enable communities to grow and thrive. Too often, needless cuts and political posturing threaten these essential investments. Rather than continue these counterproductive cuts, the state should address unmet needs across Maryland to build an economy that works for everyone.