Maryland job growth booming in nonprofit sector

Accounts for almost 10 percent of all employment in state

The growth in nonprofit employment in Maryland is fueled by industries that consistently add jobs, such as health care, education and social services, said Stephanie Lessans Geller, research project manager with the Center for Civil Society Studies within the Baltimore university’s Institute for Policy Studies and a co-author of the report.

‘‘It’s a long-term trend that has been occurring for the past six or seven years,” Geller said.

Nonprofit employment in Maryland grew by 20.5 percent from 1999 to 2006, far more than for-profit job growth of 7.1 percent. Nonprofit hospitals that include Johns Hopkins Hospital and Health System added 14,449 net jobs over the seven-year period.

Three of the four largest private employers in Maryland are nonprofits, according to figures compiled last year by the Maryland Department of Business and Economic Development. Those are Johns Hopkins University, MedStar Health and Johns Hopkins Health System.

Nonprofit organizations, which do not pay property taxes but whose employees pay income taxes, provided 9.6 percent of all jobs in Maryland in 2006, well above the national average of 7.2 percent and up from 7.2 percent in the state in 1998. State nonprofit payroll has increased from $6.1 billion in 1998 to $10.6 billion in 2006.

‘‘Nonprofit job growth is especially critical given the recent employment declines in other parts of the U.S. economy,” Lester M. Salamon, director of the Center for Civil Society Studies, said in a statement.

The new study does not cover the current economic slowdown. In May, Maryland’s seasonally adjusted unemployment rate ballooned to 4.0 percent from 3.5 percent in May 2007 — so far the largest year-over-year increase in 2008, according to U.S. Department of Labor figures.

But the state is still seeing overall job growth, as Maryland has added about 6,500 jobs since January, including 1,100 in May. Meanwhile, businesses across the nation have shed more than 300,000 jobs in 2008, and the national unemployment rate shot up to 5.5 percent in May from 4.5 percent a year ago.

Geller said she could not speculate on what has occurred in the nonprofit sector in Maryland the past year or so. But the latest federal figures showed job gains in Maryland in May in education and health services, which have many nonprofit employers. Losses mounted in the construction, manufacturing and finance sectors, typically dominated by for-profit companies.

The average weekly wage for an employee of a 501(c)(3) organization was $627 in 2004, compared with $669 in the for-profit sector, according to Independent Sector, a Washington, D.C., nonprofit advocacy organization.

While nonprofit wages are generally lower than in the for-profit sector, in industries in which the two sectors converge such as health care and social services, studies have shown that nonprofit wages are actually higher than at the for-profit companies, Geller said.

In addition to hospitals and private universities, the nonprofit sector includes museums such as the National Aquarium in Baltimore, schools, clinics, day care centers, social service providers, symphonies, art galleries, theaters and environmental organizations.

Among state jurisdictions, Baltimore city had the most nonprofit employees in 2006 with some 84,400, followed by Montgomery County with about 39,900 and Baltimore County with about 34,400. Prince George’s County saw the largest percentage gain since 2005 among the state’s five biggest entities at 5.8 percent to about 14,400.

This report originally appeared in The Business Gazette.