Adam Pagnucco, Economy

This Type of Employment is Growing Rapidly in MoCo

By Adam Pagnucco.

Data from the U.S. Bureau of Economic Analysis (BEA) confirms something we have reported before: wage and salary employment has been stagnant in MoCo for a decade.  But BEA data indicates something else is happening too: proprietor (self-employed) employment has been growing rapidly here and it pays less than wage and salary jobs.  That may not be a great sign for the county’s economy.

Unlike the U.S. Bureau of Labor Statistics (BLS), which we have cited in the past, BEA tracks two kinds of employment: wage and salary and proprietors.  (Check here for a summary of methodological differences between the two agencies.)  Proprietors are self-employed and operate through sole proprietorships (integrated with their personal income on their income tax returns), partnerships and tax-exempt cooperatives.  According to the Census Bureau’s Survey of Business Owners program, less than one in five of MoCo’s businesses have paid employees.  The county has a lot of self-employed people and little is said about them.

Here is the change in wage and salary employment between 2006 and 2016 for the seventeen Washington area jurisdictions tracked by BEA.

This data tells a similar story to BLS data we have previously presented: MoCo has trailed most of the region in job creation over the last decade.  Only Alexandria City and tiny Clarke County, VA have fared worse.

However, proprietor job data tells a much different story.  MoCo’s rate of proprietor job creation (36% over the last decade) is almost identical to the region as a whole.

Proprietor jobs aren’t inherently bad and it’s good that MoCo has SOME kind of employment growth.  But proprietors have much less security than full-time wage and salary workers.  Proprietors have sole responsibility for their health and retirement benefits and many of them have little cushion when contracts and/or clients dry up.  They also make less.  In 2016, the average wage and salary plus employer contribution to pensions, insurance and government social insurance totaled $89,337 per wage and salary employee in MoCo.  By contrast, the average earnings per proprietor totaled $66,498.

This isn’t happening just in MoCo; it’s a regional phenomenon.  But MoCo is an outlier.  The chart below compares wage and salary job creation and proprietor job creation by D.C. area jurisdiction between 2006 and 2016.  In the region as a whole, 1.2 proprietor jobs have been created for every wage and salary job over the last decade.  MoCo led the entire region in proprietor job creation with 53,672 jobs – a 36% growth rate.  But MoCo was one of the worst performers in creating wage and salary jobs as one of just three jurisdictions with an absolute job loss.  The result is a significant shift in MoCo away from wage and salary employment towards lower-paying contingent employment by a magnitude not seen in most of the rest of the region.

Unemployment rates don’t capture this kind of labor market shift.  If a self-employed person working on contracts is not seeking a full-time job even if they would like one, that person will not be counted as unemployed.

Proprietor growth can be a good thing if it reflects job-creating entrepreneurship.  That might be the case in places like Loudoun, D.C., Arlington, Fairfax and Prince William, all of which saw simultaneous increases in both proprietor and wage and salary employment.  It’s possible in those jurisdictions that new proprietorships created wage and salary jobs.  But MoCo is different from the above five places.  Here, surging proprietorships coincided with stagnant wage and salary employment.  Since proprietor jobs pay less on average, that may not be a good thing.

Let’s put this together with our previous work on the county’s economy.  MoCo business formation has slowed to a halt.  Private sector employers in the county have (at least through 2016) not restored their job counts above pre-recession levels.  These factors have contributed to big budget shortfalls, a nine percent property tax hike and county usage of one-time transfers to balance the budget.  Those MoCo taxpayers who have chosen to move out have higher incomes than those who are moving in.  And in MoCo, lower paying self-employment is outgrowing higher paying wage and salary employment.

Voters, take heed.

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Sixth Congressional District

Hitting Publish Too Soon: Pulling the Previous Post

Adam Pagnucco reminds me that the same Asian American Democratic club that got into trouble for making a non-existent person their treasurer is the one that just issued the blast in the previous (now removed) post attacking Aruna Miller. As the organization seems highly sketchy as a result, I regret giving their views a wider hearing even if there is nothing inaccurate in my reporting their endorsement and their views.

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Adam Pagnucco, Council At-Large

Balcombe’s Pitch to Upcounty

By Adam Pagnucco.

Whether they are right or wrong, MANY residents of Upcounty who communicate with your author feel that they are not treated as well by county government as their neighbors to the south.  Council At-Large candidate Marilyn Balcombe, who lives in Germantown and is the CEO of the Gaithersburg-Germantown Chamber of Commerce, is tapping into that sentiment with this mailer sent to Upcounty residents.  We think this is a smart move.  With so many at-large candidates concentrating heavily on Downcounty’s Democratic Crescent and splitting the votes there, if Balcombe has Upcounty mostly to herself, she just might be able to fly under the radar to victory.

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District 18

Waldstreicher Fibs His Way Out of Facing His Constituents

Bethesda Beat reported that Del. Jeff Waldstreicher, who hopes to win the Democratic nomination for the District 18 Senate seat, had to miss the District 18 Democratic forum on May 30th “due to what sponsors said was a commitment in Annapolis related to his legislative duties.”

Except that there was nothing official going on at that the General Assembly that day, as these screenshots of its calendar reveal:

Jeff isn’t the only one in the General Assembly campaigning for reelection, so it’s mighty odd that he had to miss a forum. I sent an inquiry to Jeff as to what was so important related to his legislative duties but have not received a response.

Jeff worked hard to avoid commenting on any controversial issue, or even speaking much at all, at an earlier forum, and skipping out on this forum would fit this pattern. Moreover, Jeff’s attendance at delegation meetings during the legislative session has been lousy, so his need to miss the forum for reasons of state seems odd.

Liquor control was one of the hot issues at the debate. Jeff didn’t comment on it at the first debate, and obviously didn’t at the one he missed. he might be keeping a low profile because he is against decontrol, as evidenced by his support from MCGEO, but not from public statements.

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2018 Governor's Race

Jealous Snags Poll Position in Gov Race

The Washington Post reports the results of a Washington Post-University of Maryland poll:

Gov. Hogan performs well against all Democrats:

[Hogan’s] 71 percent job-approval rating among all Marylanders matches his previous record high, and residents are more optimistic about the state’s direction than in any Washington Post poll over the past quarter-century, the poll finds. The governor leads each Democrat by at least 10 percentage points in possible general-election matchups.

State Sen. Richard S. Madaleno Jr. (Montgomery) has 6 percent support in the Post-U-Md. poll, although he is among the most competitive of the Democrats in a head-to-head matchup with Hogan.

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Adam Pagnucco, Ana Sol Gutierrez, campaign finance, Council District 1, Council District 3, Craig Rice, Nancy Navarro, Pete Fosselman

Campaign Finance Reports: Council Districts, May 2018

By Adam Pagnucco.

Today we look at fundraising by the Council District candidates.  As with our prior posts on the County Executive and Council At-Large races, we start with a note on methodology.  First, we calculate total raised and total spent across the entire cycle and not just over the course of one report period.  Second, we separate self-funding from funds raised from others.  Self-funding includes money from spouses.  Third, for publicly financed candidates, we include public matching fund distributions that have been requested but not deposited in raised money and in the column entitled “Cash Balance With Requested Public Contributions.”  That gives you a better idea of the true financial position of publicly financed campaigns.

Let’s start with the Council District 1 candidates.

Former Comptroller staffer Andrew Friedson is easily the fundraising leader.  His total raised for the cycle ($333,081) exceeds any of the Council At-Large candidates and his cash on hand ($245,290) almost equals the cash on hand of the next three candidates combined ($251,205).  Friedson has raised $159,257 from individuals in Bethesda, Chevy Chase, Glen Echo, Cabin John, Kensington, Potomac and Poolesville, which represents 48% of his take.  That amount is not very different from the TOTAL fundraising from others reported by former Kensington Mayor Pete Fosselman ($174,996) and former Planning Board Member Meredith Wellington ($138,820).  Of Friedson’s 1,074 contributions, 702 were for $150 or less.

The endorsement leader in District 1 is Delegate Ana Sol Gutierrez, who has the support of MCEA, Casa in Action, SEIU Locals 500 and 32BJ, Progressive Maryland and MCGEO.  But Gutierrez’s main base of voters is Wheaton, which is not in the district, and she does not have a lot of money for mail.  Friedson got a big boost when the Post endorsed him.

Reggie Oldak faces a cash crunch at the end because of her decision to participate in public financing.  Unlike Friedson, Fosselman or Wellington, she can’t get big corporate or self-financed checks to catch up late and she has already received the maximum public matching funds available ($125,000).  District 1 has by far more Democratic voters than any other district and past candidates, like incumbent Roger Berliner and former incumbent Howie Denis, raised comparable amounts to the at-large candidates.  The next County Council should consider whether to adjust the matching funds cap to avoid handicapping future District 1 candidates who enroll in public financing.

Now let’s look at the Council District 3 candidates.

Incumbent Sidney Katz and challenger Ben Shnider have raised comparable amounts for the cycle.  But Shnider’s burn rate has been much higher (partly driven by early mail) and Katz has more than twice his cash on hand.

Katz’s strength is not simply his incumbency but the fact that he has been a county or municipal elected official in the district longer than Shnider has been alive.  That shows up in their fundraising.  Katz is in public financing and recently announced that he will receive the maximum public matching funds contribution of $125,000.  Of Shnider’s $199,454 total raised, just $14,639 (7%) came from individuals in Rockville, Gaithersburg, Washington Grove, Derwood and zip codes 20878 and 20906.  That is a huge gap in starting indigenous support that Shnider has to close.

Here are the summaries for Council Districts 2, 4 and 5.

Council District 5 challenger Kevin Harris qualified for public matching funds so he can send mail against incumbent Tom Hucker.  But we expect Hucker and his fellow council incumbents, Craig Rice and Nancy Navarro, to be reelected.

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Ariana Kelly, Ben Cardin, Hans Riemer, Hoan Dang, Jamie Raskin, Marc Korman, Pete Fosselman, Rich Madaleno, Roger Berliner

Josh Starr’s Picks

By Adam Pagnucco.

Josh Starr was Superintendent of MCPS from 2011 through 2015 and still lives in MoCo.  He announced the candidates whom he supports on Facebook yesterday.  Agree with Starr or not, his personal experience of working with state and county elected officials gives him a unique perspective on those running for office.  With his permission, we reprint his post below.

*****

Very long post for my MoCo friends about my choices for the primaries, with notes/comments where I feel it’s appropriate. Please note that my choices and/or comments are based on my personal knowledge and experience with these folks, not any deep analysis of every statement/position/vote they’ve made. I definitely have biases.

Governor – Rich Madaleno; Baker would be my #2. When I was super, I found Rich to be one of the smartest, most thoughtful and most knowledgeable elected officials, esp. around budget. He was also one of the first Dems to push back against Hogan. Experienced, smart, progressive, would be a great governor. I’d also love to see an open member of the LGBTQ community elected governor, although that’s in no way the primary (pun intended) reason I’m supporting him.

Senator – Ben Cardin

Congress – Jamie Raskin, because he is, after all, The Jamie Raskin.

House of Delegates – 3 candidates:

Ariana Kelly – solid, speaks out on issues re: women, no reason for her not to continue in Annapolis.

Marc Korman – smart, thoughtful (in my LM class so I got to know him well), definitely a bright future.

Samir Paul – have had a few conversations with him, very sharp and we need more teachers in office.

County Executive (wherein I get a little snarky based on my experiences with many of these candidates). I also think the next CE might be a transitional leader, as we move from 12 years of Ike during an economic downturn towards a new vision that supports bold economic development with progressive politics.

I’m supporting Roger Berliner as I’ve always found him to be thoughtful, a really good listener/learner, consistent and progressive. I’ve always felt Roger tries to do the right thing in an inclusive and reasonable way and will work hard to bring people together around his vision.

A few comments on other CE candidates:

Blair – don’t know much about him, not a huge fan of business leaders assuming they can “save” public entities. I’m pretty agnostic.

Elrich – have always appreciated his progressive politics, always had a solid working relationship, sometimes I appreciate his willingness to take strong positions, sometimes I think they’re unforced errors; major concern is the big hill he’ll have to climb to convince a wide swath of the county that he can do economic development and enact a very progressive agenda.

Frick – there are some things I like about him, personally and professionally, but my experience with Roger Berliner outweighs any support for Frick.

Krasnow – don’t know her, but I hear good things, sounds like a solid choice.

Leventhal – based on personal/professional experience, I’m in the anyone-but-Leventhal camp. He doesn’t have the temperament or leadership skills to be CE, despite his sometimes-engaging personal style and progressive politics. Please, trust me on this one.

Council At-Large (4)

Gabe Albornoz – smart, engaging, thoughtful, has a very bright future; very supportive of kids and MCPS.

Hoan Dang – what I know, I like.

Will Jawando – he deserves a shot.

Hans Riemer – very education focused, solid on economy and progressive issues, always had a good working relationship, we need someone with experience and we need a degree of stability.

I am also in the anyone-but-Jill Ortman Fouse category, based on my experience with her as a board of education member while I was superintendent. Trust me.

Council – D1

Peter Fosselman – solid, good record in Kensington, deserves a shot at council.

BoE (always at the end of the ballot)

At-Large- Karla Silvestre, glad to see her running, great community leader, smart, thoughtful, will be a great BoE member.

D3 – Pat O’Neill, because she deserves a shot at the MD record for longest serving board member. On a serious note, she knows what the role of a board member is and provides an essential balance to other board members who think their job is to run the school system.

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Maryland Politics Watch