Delaware’s Economic Gap

Delaware's Economic Gap

By Dr. John Stapleford

June 11, 2020

As shown in the chart below, since 1990 growth in total employment in Delaware kept pace with the nation until the 2007-08 recession. From that point onward the growth in Delaware employment has lagged the nation and the gap between the two is growing.

Between 2008 and 2019 Delaware employment increased 4.8% while jobs in the U.S. rose 8.2%. Similarly, Delaware output rose 8% while output across the nation increased 22%. The average annual wage in Delaware increased more slowly than the U.S. and went from above the nation to below.

What happened?

TOTAL EMPLOYMENT - U.S. AND DELAWARE

(GRAPH SOURCE: Bureau of Labor Statistics)

The answer lies primarily with the downsizing of the DuPont Company and the disappearance of Astra Zeneca. That drove a 12,700 net loss of high paying jobs in the sector classified as management of companies and enterprises (see chart below). At the same time, Delaware experienced a net loss of nearly 8,000 well paying jobs in scientific research and development services. This was compounded by slow growth, relative to the nation, in engineering services and computer design services.

EMPLOYMENT IN MANAGEMENT OF COMPANIES - U.S. AND DELAWARE

(GRAPH SOURCE: Bureau of Labor Statistics)

Will the gap between Delaware and the nation be closed?

Not without significant action by State legislators on public education reform. According to State and Federal tests, at least half of the students in Delaware public schools are below proficient in reading and math. The central key to above average economic growth today is human capital, and Delaware is falling behind.