A year ago, Maryland workers faced a shrinking job market and slowing growth in wages.

This Labor Day, workers are better off. The unemployment rate has declined ever so slightly in the past year, having almost doubled during the previous year. Employers have added jobs in the past year, while they cut more than 3 percent of jobs the previous year.

And average hourly earnings in the private sector rose by 5 percent to $26.16 in July from a year earlier. In the previous two years, wages rose only 3 percent and 1 percent, respectively.

In fact, Maryland's private-sector employees in July had the fourth-highest hourly wages among states, behind only Connecticut, Massachusetts and California. Workers in Washington, D.C., had the highest, $34.22.

Maryland's labor market is in better shape than those in most states, said Anirban Basu, chairman and CEO of Baltimore economic and policy consulting firm Sage Policy Group. Not only are wages and household income relatively high, but job creation is stronger than in most states, enabling Maryland to post one of the lowest unemployment rates in the nation.

"Maryland has almost caught up to Virginia in its unemployment rate," Basu said.

Maryland's unemployment rate in July was 7.1 percent, versus 7.2 percent a year earlier, according to federal data.

The state has a solid economic future, especially when the impact of thousands of jobs added through the Pentagon base realignment process is factored in, he said.

But the past fiscal year was one of the worst for state coffers in more than 40 years, according to a report released Wednesday by the office of Comptroller Peter V.R. Franchot (D). The state's baseline revenue collections, which adjust general fund revenues by $169.9 million in legislative changes and extraordinary transactions for fiscal 2010, declined by 3.7 percent, the third worst performance since 1969, said David Roose, director of the state Bureau of Revenue Estimates and the report's author.

Individual income tax revenues fell by 4.6 percent to $6.2 billion, and sales and use tax receipts declined by 2.7 percent to $3.5 billion.

"Job losses, reduced use of credit, shrinking retirement accounts and falling home values, among other factors, have taken their toll on consumer spending during the recession," Roose wrote.

But numerous business categories saw increases. Corporate income tax revenues rose by 25 percent to $689.3 million. Business filing fees went up by 2.5 percent, indicating a net creation of new businesses, Roose said.

Health care is a key field for hiring in Maryland, with more than 5,000 jobs added in the past year, according to federal labor figures. Johns Hopkins Hospital and Health System in Baltimore, the state's second-largest private employer behind Johns Hopkins University, currently lists about 300 open positions for the general public on its website, from lab scientists and technicians to social workers and nurses.

The high-tech and entertainment sectors also added more than 5,000 jobs. Hotels and restaurants added even more jobs in the past year, almost 11,000.

Demand for Maryland hotel rooms is up by 9 percent in the first seven months this year over the same period in 2009, which is greater than the national increase, according to Smith Travel Research. Ocean City tourism officials say visitors there have increased by 3.5 percent this year from 2009.

Regional promotional campaigns played a key role in fueling this growth, said Margot Amelia, executive director for the Maryland Office of Tourism. In its first two months, the state's new interactive online tourism map has attracted 10,000 visitors, she said.

Construction and manufacturing have continued to post job losses, but not as great as in the previous year. The worst performance was in finance, which shed about 6,000 jobs in the past year.

kshay@gazette.net