Reports were in Friday about what labor statistics released from the Ohio Department of Jobs and Family Services said about how Ohio under Gov. John Kasich’s guidance is doing. And it’s not a heart-warming scene with Christmas, supposedly the wonderful time of the year, a week away.
The Grinch that’s stolen jobs over the last few months took a little vacation this month, as Ohio gained 9,100 jobs in November 2016, breaking a streak of three consecutive months when Ohio had lost employment. While last month’s job number is positive news, the year over year Ohio job growth rate for November 2016 was 0.91 percent, unchanged from October 2016 and from a year over year increase of 50,000 Ohio jobs, Cleveland-based economic research analyst George Zeller tells Plunderbund today.
Others also saw troubling news in the numbers. Hannah Halbert, a researcher with Policy Matters Ohio, said about Friday’s jobs report, “Even with the more positive report today, 2016 is on track to be one of the poorest-performing years since the end of the 2007 recession,” according to the Dayton Daily News.
47 Out Of 48 Is Pretty Bad
At the end of the day, though, what troubles Mr. Zeller is this: Ohio has now generated job growth below the USA national average for 47 of the last 48 months.
The year over year United States job growth rate for November 2016 was 1.58 percent, Zeller says, noting it’s up very slightly in comparison to October 2016. “Thus, November 2016 was the fourth consecutive month when Ohio’s job growth was below the USA national average,” Zeller said, adding, “Put another way, Ohio has now had job growth below the USA national average for 47 of the last 48 months. June 2016 was the single exception during the last four years.”
The yearly growth in Ohio during 2016 is 31,000 jobs, making it the smallest job growth figure in Ohio for any year since 2009, when Ohio lost 247,600 jobs, according to data Zeller analyzed. Ohio remains in an economic recovery, he says, “but the job growth in Ohio continues to be too slow to recover all of the jobs previously lost as a result of the 2000s recession. He notes that Ohio’s November 2016 job total remains 129,800 jobs below Ohio’s job total in May 2000.
Meanwhile, the state’s estimated November 2016 unemployment rate of 4.9 percent is unchanged from last month. That contrasts with the national rate of 4.6 percent, slightly down from last month’s rate of 4.9 percent. Ohio’s current unemployment rate is higher than the national rate, which can in part be attributable to another 16,000 workers leaving the labor force because jobs are not plentiful enough for all who want one.
In a state where more than 15 percent of jobs are in the manufacturing sector, jobs that traditionally pay more than retail jobs, losing more manufacturing jobs, as Ohio did again with another 1,000 disappearing, is bad news. Zeller says losing 1,900 jobs in the health care and social assistance sectors, where job growth is normally seen, contributed to November’s job market weakness. Sectors that did expand with the addition of 8,800 jobs include arts, entertainment, and recreation. Construction enjoyed an increase of 3,600 job with 1,500 each for accommodation and food services jobs, that sadly pay lower wages.
“In prior months, austerity fiscal policies of the state of Ohio had been cutting government employment,” Zeller reminds us. A relaxation in those cuts came in November 2016, when Ohio gained 1,300 government jobs, with increases of 1,100 in local government, 500 in state government, but a loss of 300 federal government jobs.
Ohio’s Shrinking Workforce
Ohio experienced a net loss of 58,000 people who moved out of state for greener pastures. Ohio’s population growth is among the lowest in the nation, a factor that can’t be turned around with lower income taxes or other razzle dazzle tax policies Gov. Kasich and his Republican colleagues in the legislature believe are cures for what ails the state. As if people moving out isn’t bad enough, for those who remain, not enough jobs is causing thousands to give up hope of finding a good paying job anytime soon. That concern was seen in the data again, with another decline of 16,000 in Ohio’s labor force, impacting the state’s November 2016 Ohio unemployment rate.
To put a real number on it, Ohio’s workforce shrank 113,000 people since May, but for the real that number is 278,000. Rea Hederman, executive vice president the the conservative Buckeye Institute, told the Plain Dealer about his concern about Ohio’s labor market. John Kasich can’t meet the national average on job growth, but he does beat it when it comes to workers who have stopped looking for work.
“Unfortunately, this month’s report shows that Ohioans are continuing to drop out of the job market,” Hederman said. “While this is a nationwide problem, in the last year more Ohioans have left the labor force compared to the national average.
Plunderbund and other news groups have written about Gov. Kasich’s sudden belief that Ohio is entering another period of recession, at a time when the national economy is heating up enough that the Federal Reserve raised interest rates this week by 25 basis points. News groups, and Plunderbund in particular, have taken Gov. Kasich to task for lowering state revenues by billions in income tax giveaways then daring to complain that reduced revenues signal the onset of another recession.
Kasich’s Ohio Model Clearly Isn’t Working
“I believe the less you tax work, the less you tax investment, the less you tax risk-taking, the more you get of all three,” Gov. Kasich said about the core tenants of his so-called “Ohio Model.” He’s done all three, yet he’s now fearful that his Ohio Model is on the rocks. Kasich, as he’s made clear from even before he was elected governor in 2010, wants to reduce Ohio’s income tax rate to zero, like states like Texas and Florida have done. Doing so would mean even fewer revenues available to dedicate to programs like curbing Ohio’s nation-leading use of opioids that kill eight Buckeyes every day.
Halbert at Polilcy Matters Ohio had some thoughts on Ohio policies over the years. “The state has endured more than a decade of trickle down tax and budget policy,” she said in a press release. “We have seen slower than average job growth and communities left behind. Ohio should not double-down on bankrupt strategies. We need policies, like refundable earned income tax credits and increases in the minimum wage, that create growth by building the middle class.”
Until Kasich’s Ohio Model starts working for all Ohioans, not just the wealthiest, his fears of a recession—in Ohio at least—could be fortune telling at its best, or worst, depending on your political point of view.
The next state budget needs to address our slow growth rate,” Halbert said. “Tax cuts are not working for working Ohio, but budget austerity won’t build the middle class, either. Investment is needed to build an inclusive and prosperous state economy.”
God speed your job creation, John Kasich, because right now, your spaceship is crashing to earth.