New estimates of Ohio employment for September 2016, released Friday by the Ohio Department of Jobs and Family Services, rained on previous sunny assessments given by lame-duck, term-limited Gov. John Kasich.
Analysts who have combed through the data note that the new figures are considerably different and far more accurate than similar figures in reports released during all of 2015, because revisions impact both seasonally adjusted and not seasonally adjusted monthly data for the last nine years in Ohio.
Downward Revisions Not So Sunny For Kasich
Upward revisions to prior 2015 months were excessively large, according to George Zeller, a Cleveland-based economic research analyst, who adds the disquieting observation that Ohio is still recovering from both the 2000s recession and the 2007 “Great Recession”. He tells Plunderbund today that Ohio ended its 43 consecutive month long job growth below the USA national average in July, but sub-par job growth has returned in August and September, starting a new streak of two consecutive months with Ohio’s job growth below the USA national average. Mr. Zeller says this new streak now means Ohio hasn’t met or out-performed the national average for 45 of the last 46 months.
Based on today’s new figures, Ohio lost 3,100 jobs during September 2016 while suffering a 2,400 downward revision to last month’s August 2016 jobs data that was not seasonally adjusted. The downward revision to August’s seasonally adjusted data was a whopping 26,600 jobs.
“During the first nine months of 2016 Ohio has gained only 2,200 jobs, a much slower rate of growth than Ohio needs to recover jobs previously lost in the state,” Zeller said.
For the two months Ohio did climb out of its hole, the results were attributed to increases in manufacturing and local government. “Cuts in Government spending during bad recessions always slows down growth by public policy. The end of this drag on growth by increases (instead of decreases) in government employment had the predictable impact that Ohio’s job growth rate improved in July,” Zeller said. He added, “But, Ohio’s loss of another 3,100 jobs in September 2016 once again pulled Ohio’s job growth rate of 1.38% below the slightly slowing 1.70% USA job growth rate.”
Zeller wasn’t alone in his sober assessment. Hannah Halbert, a researcher with Policy Matters Ohio, a progressive economic think tank, echoed the news.”Two months of bad news isn’t necessarily the start of a new trend and the monthly number should be read with caution as it is preliminary, but the job report does suggest Ohio’s economy is challenged,” she said in the group’s release on today’s job numbers.
In 2005, when Republicans controlled the legislature and the governor’s office, Gov. Robert Taft cut taxes for corporations and high-income Ohioans dramatically. Ohio has added a total of 83,000 jobs, for a growth rate of 1.5 percent compared to a national average over that period of 8.1 percent, PMO said. Noting that Ohio has continued to cut taxes more recently on the promise of more jobs, Halbert said growth continues to trail the national average.
“Ohio was promised robust job growth in exchange for tax cuts that overwhelmingly favored the wealthiest among us and that has not panned out,” she said. “As the governor [John Kasich] considers his final budget proposal, he would do well to abandon the tax cut approach and make investments to spur growth.”
Zeller and Halbert are of the same mind when it comes to budget austerity hampering job growth. Halbert said Ohio needs intentional investments in infrastructure, energy efficiency and education to build an inclusive economy and secure our long-term prosperity. Zeller said slashing government employment during numerous prior months and quarters was counterproductive since it prevented Ohio from “speeding up its slow and below-average growth rate to a vigorous employment recovery that the state badly needs.”
When government and manufacturing had robust growth in June and July 2016, the predictable positive impact resulted, Zeller said. “Unfortunately that improvement relapsed during both August and September 2016.”
These numbers are not isolated from the current political races in the state, especially the battle between Republican Senator Rob Portman and his challenger, former Democratic Gov. Ted Strickland, whose great misfortune was to both inherit a sliding economy from a dozen years under Republican control and take the brunt of the Great Recession. Sen. Portman has essentially blamed Strickland for the great loss of jobs during his single four-year term, saying Ohio was 48th in job growth. Strickland said the recession was national in scope, but by the time he left office, Ohio was the fifth fastest recovering economy, which means he gave John Kasich a recovering economy who despite all his tools, including a private job growth group with a billion dollars to give away to businesses is still stuck in low gear.
Gov. Kasich and Sen. Portman are cut from the same ideological cloth that says government is bad and government jobs are not important. As Zeller and Halbert show, government jobs, including police, firefighters, nurses and especially teachers, are integral to a sunny economy. Kasich’s much ballyhooed budget cutting, that stripped billions from local governments, is in large measure responsible for the slow growth statewide and the difficult from local governments who have had to do more with less revenue as a result.
With only two years left in his final term, it’s hard to imagine ideologues like Kasich and Portman will alter course on their proven non-performing tactic to reduce income taxes, as they shift the tax burden from business to individuals who can least afford paying more to compensate for the five or more billion Kasich has doled out to the states wealthiest earners.