November 15, 2011

ADOZEN YEARS AGO, a Brookings Institution report illustrated the Washington metropolitan area’s division along its east-west axis — a gulf demarcating profound imbalances in income, race, jobs growth and public investment. Most of the basic differences highlighted in that report ( “A Region Divided,” 1999) persist. But now there’s an asterisk: the widening gap between Fairfax County, the region’s economic powerhouse, and Montgomery County, which, having lost its status as Fairfax’s prosperous near-twin, is falling increasingly behind.

The growing breach between Fairfax and Montgomery — which together account for 2 million people, more than a third of the region’s population — is laid bare by new federal data. The data were the centerpiece of an eye-opening presentation to the Montgomery County Council this month by Stephen Fuller, director of the Center for Regional Analysis at George Mason University.

The figures included some sanguine findings: The Washington metropolitan area ranks fourth among the nation’s regional economies, and it has been by far the fastest-growing one in recent years. Since 2000, it has added more jobs than any other metro area in the country. Unemployment in this region, about 6 percent, remains a third lower than the national average, and job growth picked up quickly last year following the depths of the recession (although it’s leveled off in the past six months or so).

The worrisome news for Montgomery is its economic performance — not in a national context but against its real competition: Fairfax. In the two decades ending last year, Fairfax added jobs almost four times faster than Montgomery did. Economic growth in Fairfax was 50 percent faster. While federal spending in the two counties (mostly government contracts) was roughly the same in 1990, it is now, at $33.5 billion annually, more than 60 percent higher in Fairfax than in Montgomery. And while average wages in the two counties used to be roughly comparable, they are now $15,000 higher in Fairfax, That disparity reflects Fairfax’s success in attracting high-tech and information-technology companies, while Montgomery continued to rely heavily on federal and health-care jobs.

Montgomery, Mr. Fuller told us, needs a new strategy. “Their future shouldn’t look like their past.”

Formulating that strategy will take sustained effort; fortunately, it has begun. Officials in Montgomery, mindful of the challenge, have targeted the Interstate 270 “technology corridor” to expand biotech and other high-wage industries. Elected officials — some of them, at least — have at last concluded that ever-spiraling taxes and bloated budgets, driven largely by the county’s powerful and aggressive public-employee unions, are not conducive to attracting major employers and high-end, knowledge-based jobs. There is a recognition — if not yet a comprehensive action plan — that if Montgomery is to compete successfully with Fairfax, it will need closer collaboration with business, more even-handed policies and a more assertive economic development effort.

Montgomery remains in many ways a first-rate place to live and work. There is no guarantee it will stay that way. It needs forward-looking leadership to ensure it does not continue a downward slide toward the status of Fairfax’s poor relation.