Unemployment in Maryland this week reached its highest level since the recession of the mid-1970s, forcing the state and federal governments to pay for an emergency, 13-week extension in benefits to an estimated 95,000 jobless people across the state.
This marks only the third time in the last decade in this normally recession-proof state that the unemployment rate has reached the federal trigger level, the point at which unemployment exceeds 120 percent of a state's average jobless rate during the last two years.
The trigger automatically extends from 26 to 39 weeks the length of time that Marylanders who are out of work can receive unemployment benefits of up to $140 a week.
The jobless rate in 14 other states, including neighboring Pennsylvania, also has passed the federal threshold as the national economy continues its slowdown.
In all, 171,297 Marylanders were out of work in December, the latest month for which figures are available. The comparable figure in August 1976, during the worst recession of the last decade, was 135,380, according to state records. But officials said the 1976 rate was worse than the 7.9 percent recorded in December because the state labor force has grown considerably since then.
Gov. Harry Hughes, responding to the bad economic news, today endorsed state legislation to create "enterprise zones" similar to those being considered by Congress to lure industry to high unemployment areas and a second measure to provide state-insured loans to minority-owned businesses.
Hughes, continuing a running attack on President Reagan's economic policies, said the deepening recession means Maryland probably will be unable to raise enough state revenues to minimize "the very devastating effects" of continuing federal budget cuts.
Hughes' attack on Reagan came minutes after Anne Arundel County Executive Robert Pascal, a Republican, declared his candidacy for governor. It appeared to mesh with the incumbent's campaign strategy of trying to leave the Republican candidate vulnerable to the perceived backlash against Reaganomics in this heavily Democratic state.
The governor also denounced the Reagan administration's plan to increase the threshold unemployment level that triggers the 13-week extension of benefits. That change is to take effect Sept. 26, and, according to Hughes, means "the federal trigger will never work again unless you're really in a depression."
When a state's unemployment rate passes the trigger point, jobless benefits are automatically extended from 26 to 39 weeks, and the federal government pays half the cost of the extra 13 weeks. The state pays the full cost of the first 26 weeks through a payroll tax on employers.
Maryland officials say they believe joblessness is higher than the 7.9 percent reported for December because the number of claims being filed at unemployment offices is increasing at record levels. Still, the figure is a major increase over the 6.2 percent rate in December 1980.
The state paid out $8 million a week in unemployment benefits for the last two weeks, and $6 million a week for the two months before that, according to Frank O. Heintz, executive director of the State Employment Security Administration.
Heintz said he fears the drain will eventually bankrupt the state's unemployment insurance fund, as did the high jobless rates of the mid-1970s. During that time, Maryland had to borrow more than $62 million to keep its fund solvent.
The fund now stands at $387 million, but cannot support continued high levels of unemployment without major infusions of cash, Heintz said.
Last week, 80,000 Marylanders received jobless benefits, compared to 69,731 a month ago. The 13-week extension in eligibility will probably add another 15,000 recipients who already had exhausted their 26 weeks of benefits, bringing the total to 95,000, Heintz said.
The first time state unemployment rose high enough to trigger federal assistance for an extra 13 weeks of benefits was during the recession of the mid-1970s, from Feb. 9, 1975, to August 28, 1976, according to state records. At that time, the average number of jobless benefit claims being filed weekly came to 5.2 percent of the number of workers covered by unemployment insurance, the records show. The present ratio in Maryland is 4.05 percent, Heintz said.
The other time Maryland's unemployment rate set off the federal trigger was from Feb. 3 to July 16, 1977, when the ratio reached 5.1 percent.
Heintz predicted the trigger will remain in effect only for the minimum 13 weeks, since employment usually shows a seasonal increase in March and April.