The American economy has been on a roller coaster ride over the past 12 months, said Jeremy Schwartz, associate professor of economics at Loyola University of Maryland’s Sellinger School of Business. By June of 2020, things looked rather grim for the U.S. economy, he recalled, with gross domestic product declining and jobless claims increasing by unprecedented levels.
This was true for Baltimore businesses as well. In June 2020, The Charmery, a local Jewish-owned ice cream business, was in a state of constant flux, with business operations needing readjustment every three months, said co-owner David Alima.
But the situation is now improving. The arrival of the vaccine and the country nearing a 70% vaccination rate has helped people feel more comfortable venturing outside and engaging in the economy again, Schwartz explained. This has led to steady job growth, a pickup in GDP, some rising prices (which can be an indication that consumers are spending again) and a stock market that is doing rather well.
Alima, a Jewish resident of Baltimore City, also sees a greater steadiness in the economy today. His ice cream business is currently in its busy season, and four of his five locations are open. He hopes to open his ice cream factory in Union Collective to in-person customers later this summer. While some of his locations are suffering a bit more than usual, he noted, others have almost returned to normal.
“Now, it seems like we’re settling back into a new normal that resembles the old normal,” Alima said.
Schwartz noted that different sectors of the economy have had vastly different experiences over the past 12 months. Last year, companies that produced face masks and hand sanitizer or that provided food delivery services saw a surge in demand, as did online retailers like Amazon. Conversely, business in the restaurant, hospitality and construction sectors were hit particularly hard.
The success found by some companies, and challenges experienced by others, over the past year resulted in a massive reallocation from some industries to others, leaving an economy searching for a way back to what it was before, Schwartz said.
At Market Maven Baltimore, Eli Siegel, the store’s general manager, has had a difficult time attracting new employees. While people do still send in resumes in response to ads, many ultimately decide that Market Maven’s open positions aren’t worth it for them, he said.
“It’s very, very, very hard to find people that want to work,” said Siegel, a resident of Pikesville and member of Pikesville Jewish Congregation. “Much harder than ever. I have people in the industry for 30, 40 years who own businesses and never had such a hard time trying to find people to work.”
Siegel placed much of the blame for this on unemployment benefits.
“It’s very readily available to anyone that needs it,” Siegel said. “And I have people who tell me that I’m offering them phenomenal jobs, great incentives to work for us, and they just say that they’d rather just take a little less money home and stay home and collect unemployment with zero responsibility.”
While Alima also had heard of businesses having difficulty finding new employees, his business has been lucky to find some good new hires along with some returning staff members, he said.
Schwartz was far less certain about the overall effect of unemployment benefits on the labor market. Some have chosen to leave the workforce to care for their children, he noted, while others may feel that businesses are simply not offering them enough to return to work.
“There’s plenty of people out there, really, it’s, I can’t hire somebody at the wage that I want to pay them,” Schwartz said. “The idea of a labor shortage is kind of a debatable sort of topic in general.”
Currently, there simply isn’t enough data to be certain either way, Schwartz said.
Staff at Jewish Community Services’ Ignite Career Center have noticed many clients coming in looking to make a career change.
“We’ve seen a lot of clients come into the career center reassessing their short and long term career goals, and we’ve been able to help a lot of people, that were kind of stuck in neutral, now put their gears in forward motion to make a career change,” said Sherri Sacks, manager of the career center.
“Maybe they didn’t want to take the chance before; now they have an opportunity to make a career change,” Sacks added.
A lot of employees are feeling anxiety at the thought of returning to an in-person work environment, Sacks said.
“People are thinking about shared work spaces, lavatories, door knobs, who else is in contact in the building,” said Lisa Cohn, an account representative/remote work strategist at the career center. Many of her clients express an interest in exploring remote or hybrid opportunities, she said.
Newcomers to the career center are normally eligible for a free consultation visit, Sacks said, which can involve learning the client’s interests, values and expectations. Ignite’s career coaches help with updating a client’s resume, she said. Meanwhile, account representatives handle job placement services, reaching out to their network of employers on the job openings that are available or contacting new organizations as necessary, Cohn said.
To those looking for new opportunities, Sacks urged job seekers not to wait until the last minute, or just before their unemployment payments run out. Cohn’s advice is to explore what new opportunities are available.
“A lot of times we just go to what’s routine and what we know,” Cohn said. “It’s a good time to kind of change and just think outside the box. … So people should really embrace this opportunity and don’t do what you always do. Use this opportunity to reinvent yourself or move forward, because things you thought, maybe, you couldn’t do before you probably can do now.”
While local businesses hunt for new employees, the housing market is looking very good for current homeowners.
“In March, the region’s median home sales price reached $315,000, a decade high and nearly 20% higher than March 2019,” the Baltimore Sun reported in April.
These findings were reflected in the experiences of local realtors like Eric Black, founding partner of The Group. of Northrop Realty, A Long & Foster Company.
“This is, in my 18-plus years of selling real estate, the strongest market that I’ve been a part of,” Black said.
Reasons for this include historically low interest rates and a limited supply of inventory, said Black, a resident of Pikesville and member of Beth Tfiloh Congregation. The low inventory was partly due to potential sellers feeling uncomfortable with the idea of strangers being physically inside their homes, which makes them reluctant to engage in the selling process, Black said. Other potential sellers were comfortable but couldn’t find another place to buy, and so could not sell the home they already had. Additionally, high lumber prices caused the cost of construction to increase significantly, further limiting the supply of houses on the market.
The country’s transition to remote work has also played a role, Black explained.
“With many companies now not requiring people to come to the office … people are relocating here from some other areas,” Black said. “Whereas before they needed to be close to D.C., now they don’t have to. It’s more affordable here.”
Additionally, after spending the past year stuck at home, many have been convinced that their current homes are not big enough, Black said. They may be looking for a place with an extra room for Zoom meetings, or one with more outdoor space.
“The high demand from both needs from COVID and to take advantage of low interest rates, coupled with the very low inventory, has created an extreme sellers’ market, and [is] why we’ve seen the prices escalate so high in such great appreciation in such short amount of time,” Black said.
To those looking to buy new homes, Black advised finding a realtor who can navigate the current market, and to both be patient enough to wait for the right offer and to be ready for when a home hits the market.
By contrast, Black’s advice to those considering selling their homes is to do it now.
“[R]ight now the inventory is still very low,” he said. “There’s still a great number of buyers out there, interest rates are still very low and if you can comfortably do it, I would take advantage of selling now, because we don’t know how long it’s going to last.”