Nationally, the pandemic-era worker shortages that rocked the job market are over. But zoom in, and you'll find one state where it's still worse than ever: Maryland.

Why it matters: We often talk about the U.S. as a single labor market. That can hide important economic trends — in this case, the nation's lowest unemployment rate that's a boon for local workers but reveals troubles restraining the state economy.

The big picture: The U.S. labor market has loosened up as more workers enter the labor force. The labor supply rebound has helped ease inflationary pressures, while lingering demand on the part of businesses has kept the national rate low.

• But in Maryland — Federal Reserve chair Jerome Powell's home state — the unemployment rate is hovering at a near-record low for a very different reason.
• At one point last year, it recorded the lowest jobless rate the country had ever seen — 1.6%.
• Maryland's jobless rate is currently tied with North Dakota as the nation's lowest. But unlike Maryland, North Dakota has long had structurally low unemployment relative to the rest of the nation.

Maryland's low unemployment rate is the result of a troubling reality: Thousands of workers left the labor force when the pandemic hit and still haven't returned, pushing the unemployment rate down.

• "People like to brag about low unemployment rates, but the reality is you wonder who is left out there to recruit in your business," Kelly Schulz, the state's former secretary of the labor and commerce departments who also owns a cybersecurity firm, tells Axios.
• "At first, the low unemployment rate sounds great," Mike O'Halloran, the Maryland director of the National Federation of Independent Business, a small business lobbying group, tells Axios. "But the rest of the story is folks just aren't in the labor market like they used to be."

By the numbers: In Maryland, there are three open jobs for every available worker, as of November — close to the most on record and well above the state's 1.4 available gigs per worker in January 2020.

• The upshot is a slew of anecdotes about huge efforts to recruit and keep staff with better pay and benefits — the type of stories that previously defined the national workforce in 2021 and 2022.

What they're saying: It makes for a booming backdrop for job seekers, especially as employers are forced to be more open-minded about the types of workers they can hire.

• "If you want a job, you can get one," says Bill Tompkins, the head of an economic development firm in Montgomery County, where the jobless rate is among the lowest in the state. "Companies are accepting lower skill sets. In some cases, somebody is better than nobody."

Zoom out: The situation puts Maryland at risk of continually sluggish economic growth if the labor shortage persists, Tompkins notes.

• "If companies cannot fill jobs, they can't expand their business," he tells Axios.

Where did Maryland's workers go? A first-of-its-kind report from the state government released last month offers some answers.

• The state's comptroller notes that while the state is seeing an influx of new residents from states with a higher cost of living, "more Marylanders are moving away to states where cost of living is even lower."
• "Low availability of affordable housing for lower- and middle-income households appears to be the primary driver of cost of living and migration trends," the report says.

The intrigue: The state's decline in labor force participation is concentrated among those between the ages of 25 and 44 — prime-age workers, especially women.

• "A decline in labor participation among prime-aged workers is particularly concerning because these workers are typically the most productive compared to other age groups," the state says.
• The report flags structural issues like expensive child care costs or health issues that are preventing people from joining — or rejoining — the workforce.

Between the lines: One other factor that may contribute to anecdotes of shortages is the rise of remote work, allowing workers to take jobs outside of Maryland.

• "People are living in Maryland but working elsewhere through remote work," Daraius Irani, an economist at Towson University, tells Axios.
• "It means that local firms can't hire those individuals. Imagine if they are living in Baltimore, making New York City wages. On the wage side, Maryland firms can't compete."

The bottom line: "[T]here appears to be an issue of labor supply instead of a lack of labor demand," the comptroller's report says. "In other words, if Maryland had higher labor participation, employment would likely expand."