The Cincinnati Enquirer’s story this morning on yesterday’s Ohio jobs report for November points out the same issues I did in this post yesterday—the unemployment rate dropped .5%, which sounds impressive, but it was almost totally due to Ohioans dropping out of the workforce entirely, and not due to the modest gain of 6,000-7,000 new jobs (depending on which survey you examined.)
Most of the result is people leaving the workforce. We’ve seen this at the national level, and now we’re seeing it at the state level,” said George Vredeveld, director of the University of Cincinnati’s Economic Center for Education & Research.
Vredeveld said a significant number of people leaving the workforce are so-called “discouraged workers” who abandon their search for new employment. Nationally, 42.8 percent of the nation’s unenemployed workers have been jobless for six months or more.
“Some people are clearly discouraged,” Vredeveld said. “These are people who no longer look for work, they retire early or maybe go back to school or they’re living with a parent and finding ways to make do.”
Hey, who here remembers 1975? I don’t because that’s the year I was born. What does 1975 have to do with November’s jobs report?
[F]rustrated workers abandoning their job hunts may have had the greatest impact on the unemployment rate as a whopping 22,000 dropped out of the state’s labor force — the highest monthly exodus since May 1975.
Yes, the last time Ohio saw this large of an exodus from the workforce, I was four months old, Monty Python and the Holy Grail was in theaters, and Earth, Wind & Fire’s “Shining Star” was the top single in the nation.
As a result of the November exodus in the labor market, Ohio’s labor market has shrunk to the level it was in March 2000.
Biggest single-month drop in the labor population in 36 years leads to smallest labor population in over 11 years.
Just how much did the exodus of Ohioans from the labor market play in the .5% drop in the unemployment rate in November?
If the state’s labor pool had held steady from October to November, the new jobs would have trimmed Ohio’s unemployment rate from 9.0 percent to 8.85 percent.
In other words, 70% of the drop in the unemployment rate was solely due to the exodus in the labor market, and only 30% was due to new job creation.
And, again, this is the best monthly jobs report Kasich has had since Kasich enacted his “Jobs Budget.”
I’m not rooting for Ohio to fail, but I’m amazed at how politics and Kasich’s need to point to something, anything, he can try to take credit for in an effort to improve his sub-40% approval rating results in someone taking this jobs data and suggesting it validates what he’s doing.
The idea that any Governor has much control over the economy is ridiculous in its own right, but if Kasich is going to take credit for the .5% drop in the unemployment rate, then doesn’t he have to take the blame for the mass exodus that fueled it and the disappointing jobs reports in June, July, August, September, and October?
Again, the only reason the November jobs reports looks good at all is in context to how terrible the prior five monthly reports were. Economists agree with us, the November jobs report is nothing to brag about. Just like Kasich declaring his failure to lure Sears to Ohio, Kasich is doing the end zone dance before crossing the fifty-yard line.
Keep on truckin’, Guv. Far out.
John Kasich, he’s like the Black Knight of Governors: