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Contract Jobs Grow, Yet Energy Rates Inflict Pain
By Zachary A. Goldfarb
Washington Post Staff Writer
Monday, June 23, 2008; Page D01 The big defense company Lockheed Martin of Bethesda has nary a concern about the national economic downturn. It is hiring -- not laying off -- employees.
"Our hiring patterns nationwide and in the Washington area are totally unaffected by the state of the economy," said Ken Disken, senior vice president for human resources.
In another corner of the Washington economy, Renee Warren, 49, a Gaithersburg waitress who has been staying home to take care of her disabled husband, saw her lights go dark recently because she couldn't pay her electricity bills, which have reached $400 a month.
"It's just ridiculous," Warren said. "You can't live. I can't even get shoes for my husband, clothes, the things we need because of the bills."
The sagging national economy is widening the gap locally between people who work for the giant base of consulting and technology firms that rely on the government for revenue and lower- and middle-income people in jobs exposed to the downturn, such as retail and construction.
As some companies around the country pull back and lay off workers, government services firms are keeping overall rates of employment high in the Washington area. But people of modest means are feeling pinched by increases in the prices of everyday goods, especially gasoline and utilities. These costs are rising faster in the Washington area than in many other places.
A government report released last week showed that prices for consumer goods in the Washington-Baltimore region are increasing faster year over year than the national average. Prices in May jumped 5 percent, compared with 4.2 percent nationwide, the Bureau of Labor Statistics said.
The heart of that difference was energy -- in particular the cost of powering one's home, which jumped 28 percent, compared with an 11 percent national increase.
"The Washington area is still generating new jobs every month. We're not looking like the national economy there, which has lost jobs for the last five months," said Stephen Fuller, director of George Mason University's Center for Regional Analysis. "The strength of our economy seems to be holding, and the consequences of the slowdown in the housing and financial sector haven't spread like it seems as they have in the national level."
But Fuller added a caution.
"People who are young, have children and a lot of debt, and jobs that pay below the average are feeling the full brunt of this increase in food prices and energy prices, and they have no cushion," he said.
While soaring energy prices are battering the entire country, it appears the effect is being amplified in the Washington area -- and especially in Maryland.
Several factors contributed to the fast-rising utility bills in Maryland, said Brandon Farris, policy director at the Maryland Energy Administration.
The cost of transporting fuel to the Northeast has been rising with the price of gasoline, and other areas of the country have more ready access to cheaper nuclear and coal power, he said. He added that consumers are still feeling the impact of the deregulation of local power companies in Maryland and the removal of price caps.
Whatever the reasons, the soaring costs are causing deep anxiety for many low-income people. "We have to pay for rent and gas and electricity, and not only gas for the house but gas for the car," said Amanda Miller, a new mother and a Gaithersburg resident who has struggled to pay her electricity bills. "We have to sacrifice the necessities or sacrifice paying the bill."
Local aid workers say they have more and more people coming for help, shocked by the rising cost of utility bills.
"Especially with a vulnerable population, there isn't this magical pool of money to meet the difference from the rising utility costs. They have to pull it from their already limited budget," said Regina Mastromarino, director of the Upper Montgomery Assistance Network, a nonprofit group that seeks to help families in Germantown and Gaithersburg keep their lights on.
In addition to gasoline, other prices are rising in the area faster than the national average include airline fares, physician services and certain goods such as tobacco, according to the Bureau of Labor Statistics.
A recent government jobs report, however, portrays a more positive trend.
The job count in the Washington region was up 1 percent in April over the year before. That was higher than the 0.3 percent national increase. The data showed that professional and business services companies powered the job growth.
May data might show weakness, however, as recent high school and college graduates go searching for jobs. That's what emerged in a recent national report showing that the unemployment rate increased by half a percentage point.
Yet some Washington area companies are measuring the trend differently.
"It's probably going to be helpful to us. We'll have a more abundant pool of talent available, especially new college hires," said Disken, the Lockheed Martin executive. "Some of the commercial companies are cutting back and retracting offers."
Brian Keenan, executive vice president for human resources at the government services firm SAIC, which has a large presence in McLean, said that so long as the government continues to issue contracts, SAIC will sail.
"The market here is very robust," he said. "We're hiring 600 to 700 people every month. Right now our customers are still funded. They're still awarding new contracts. We have business."
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