A tale of two economies

Franklin and Washington counties share a border but their jobless rate differs significantly

June 04, 2011|By DON AINES |
  • A CSX Intermodal Terminal is a highlight of recent Franklin County economic development.
By Kevin G. Gilbert, Staff Photographer

Washington County in Maryland and Franklin County, Pa., share more than a border.

Their populations and median household incomes are nearly the same and the economies are in many ways similar, but the unemployment rate continues to be much higher in Washington County than in its neighbor to the north.

After averaging 10.3 percent for 2010 and still in double digits the first two months of 2011, the unemployment rate in Washington County dipped to 9.9 percent in March, and then to 9.1 percent in April, according to the Maryland Department of Labor, Licensing and Regulation.

Franklin County's April jobless rate was 6.5 percent, a 1.8 percent drop since April 2010, according to Department of Labor and Industry figures. It also was lowest among the Tri-State counties in Pennsylvania, Maryland and West Virginia.

Washington County's jobless rate topped out at 11.9 percent in February 2010, according to DLLR. That same month, Franklin County's unemployment rate for the recession peaked at 9.1 percent.

"The recovery can be attributed to the resurgence in the manufacturing sector," said Franklin County Area Development Corp. President L. Michael Ross, who cited crane builder Manitowoc in Shady Grove, Volvo Construction Equipment in Shippensburg and Tyco Electronics in Waynesboro among companies hiring in recent months.

The major manufacturers have helped revitalize local small machine shops and component suppliers, Ross said.

Ross predicted a shortage of machinists, welders and other skilled workers as the manufacturing sector recovers. That's despite the fact the recession has caused manufacturers to shed more than 2,000 jobs in the past three years, according to Labor and Industry figures.

Timothy R. Troxell, executive director of the Hagerstown-Washington County Economic Development Commission, said recently that the jobless rate for Washington County was the lowest in more than two years, but new hiring was lagging in the recovery.

Despite both counties having populations just under 150,000 people, the labor force numbers for Franklin County are much higher, about 80,000 compared to 67,000 in Washington County, according to Maryland DLLR and Pennsylvania Department of Labor and Industry figures. The number of people employed also was much higher, at 74,000 in Franklin County versus 61,000 in Washington County.

The number of unemployed in Washington County was 6,114 in April, a drop of 1,100 since January, while Franklin County listed 5,200 unemployed in April, down from 6,000 in January, figures from the two states showed.

Urban vs. green and the interstate

The disparity might be due in part to Washington County having a major population center in Hagerstown, Troxell said. Hagerstown has approximately 40,000 residents, making it about twice the size of Franklin County's Chambersburg, Pa., and urban areas tend to have higher concentrations of people requiring public assistance, he said.

The Interstate 81 corridor has been an economic boon to both counties, but perhaps more so in Franklin County, which has approximately 24 miles of I-81, compared to about 12 miles in Washington County.

Additionally, Franklin County has large tracts of developable land for an intermodal facility and business park at Exit 3 of I-81, and parcels at Exits 10 and 24 earmarked for development as industrial and distribution sites, he said.

As Ross recently told the Franklin County Commissioners, "Greenfield development is easy. Urban redevelopment is hard."

Along the dozen miles of I-81 in Washington County, most of the interchanges are developed, Troxell said.

"There's still a lot of developable ground off Halfway Boulevard," said Troxell, pointing to the Hunters Green Business Park, where the second of three phases has started to fill up.

Construction falters

Construction was hit hard by the recession and residential construction remains fairly dormant, both Troxell and Ross said.

In the category of Natural Resources (which includes lumbering and shale extraction) and Construction, employment has fallen 5 percent in the past year, Troxell said. The story is about the same in Franklin County, where state figures showed Natural Resources and Construction employment at 1,800, down from more than 3,000 during the peak years of the building boom.

One chart in the Hagerstown-Washington County Economic Development Commission annual report shows that capital investment took a nose dive.

Capital investments in Washington County peaked at $212 million in 2008, fell to $145 million in 2009, then plummeted to $42 million last year.

Tracking capital investments can be tricky, Troxell said. Projects that involve construction are easier to document, but money that companies invest in new machinery and plant modernization is harder to follow, he said.

Capital investment this year should exceed that of 2010, Troxell predicted.

While Franklin County has a broader manufacturing base, Ross said Washington County has the bigger commercial and retail sectors. Residents of Waynesboro and Greencastle are more likely to head south for shopping, restaurants and entertainment, he said.

An Army depot and prisons

Federal investment in Franklin County is higher than in Washington County, according to U.S. Census Bureau figures. The difference is Letterkenny Army Depot, which employs about 3,800 federal and contract employees, making it the county's largest employer.

Letterkenny is followed by Summit Health and the Chambersburg Area School District.

Washington County has more state employees because of the three state prisons. The three prisons and other Department of Public Safety and Correctional Services agencies employ about 1,500 people, spokesman Mark Vernarelli said.

The more than 6,000 inmates in those institutions are not counted as unemployed, according to DLLR.

The state ranks as Washington County's third-biggest employer, behind Washington County Public Schools and Meritus Health Inc., according to EDC figures. For both counties, top employers are government, health care and educational institutions.

Fort Ritchie in Cascade closed in 1998 and redevelopment is stalled for the time being, awaiting the outcome of a lawsuit, Troxell said. Corporate Office Properties Trust is developing the 591-acre former Army post with plans to invest more than $250 million and create more than 4,500 jobs over the next two decades.

"Fort Ritchie is a place where no one looks at the state line," Troxell said. Situated in the northeast corner of Washington County, redevelopment of the former fort would affect the economies of Washington and Frederick counties in Maryland, as well as Franklin and Adams counties in Pennsylvania, he said.

A regional economy

Ross and Troxell said state lines mean little to the people working within the regional economy. Both cited the decision by Macy's to build a distribution center in Martinsburg, W.Va., as a plus, not a minus.

"We were in the running for that early on, but we didn't have a site that met their needs," Troxell said. Still, many of the people to be hired by Macy's will come from Washington County, he said.

"When it comes to losing a project like Macy's, I'd rather lose to Martinsburg than York (Pa.)," Ross said.

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