Ohio’s 69th governor has left the state again, this time to hop the pond for a few days to schmooze with German and English businesses. Odds are slim that the 64-year old supply side governor will learn anything about how important unions are to German companies.
Called co-determination, it’s not uncommon in Germany for unions to hold seats on corporate boards, which helps explain why German union workers have such high wages compared to American unions which are routinely denigrated by Republican governors like Mr. Kasich, who may have a chance to sign a right-to-work bill that guts union power in Ohio. Right-to-work allow workers to opt out of paying union dues or fees.
The collapsed Catholic boy from Pennsylvania wants another shot at telling a rarified business audience just how cool Ohio is before he wanders off the political stage in two years when his second term as CEO ends.
Gov. John Kasich spent many months in 2016 traveling to states other than Ohio to sell himself to Republican primary voters as a candidate for president. But those voters weren’t buying what the performance politician had to sell, which a Toledo Blade editorial aptly noted couldn’t out poll “none of the above.”
JobsOhio will cover the travel tab for Kasich and a few aides, even though the group is thought by many to be unconstitutional. Ohio’s Republican-controlled supreme court performed a great service to the governor by keeping JobsOhio from facing any constitutional test. The costs of Kasich’s trip overseas, unlike the millions spent on protection costs while he was campaigning for president, must be disclosed to the public at some point, in spite of JobsOhio’s structure that protects it from normal public records laws.
7th Worse State For Business
For all his budgeting and management razzle dazzle, Ohio has been stuck in low gear throughout the six-plus years of Kasich’s tenure as governor. His often ballyhooed claim about Ohio’s new business-friendly attitude took a big hit with the announcement by 24/7 Wall St. that the Buckeye State ranks seventh this year in “Worst States for Business,” largely based on the state’s shrinking working-age population.
Ohio’s workforce has been shrinking as the governor can’t produce enough jobs fast enough for those who want them. For all but one month out of the last 49, John Kasich and JobsOhio have failed to meet or beat the national job creation average. Companies are choosing to locate in other states, some nearby like Indiana or Kentucky, due to better workforce climates there.
As 24/7 Wall St., a financial news and opinion company, put it, a shrinking working-age population is a “sign of a low level of confidence in a state’s economy and means businesses can count on fewer individuals in the applicant pool.” The population of working-age adults nationwide is projected to grow 4.6 percent over the decade through 2020, whereas in Ohio the working-age population is projected to shrink by 4.1 percent during that period.
Ohio ranked No. 35 on the same list last year, which also found a relatively low level of educational attainment. If Ohio wants to compete with other states in a smart workforce, it will have to improve its ranking of 45th of 50 states in college affordability. A Vanderbilt University study notes its high cost of college is “a major challenge given that leaders across many sectors of Ohio say the key to future success is building a more educated workforce.”
Kasich’s Blind Spot On Immigration-GDP Link
It’s been noted that Ohio has a huge workforce gap in the skilled trades, with business owners complaining that they simply can’t find enough qualified candidates to fill available positions. Gov. Kasich’s response to falling enrollment in Ohio’s public vocational schools is to reduce funding to 35 of the state’s 49 vocational schools.
It’s unclear whether Mr. Kasich knows that the natural increase in population has slowed? He may also not know, as a governor who doesn’t want to take in Syrian refugees, a position other Republicans have taken, the impact of lack of immigration has on growth of the labor force and GDP. Ohio’s population is aging and shrinking, but immigrants “tend to be younger and therefore more likely to participate in the labor force than the native-born population,” Goldman Sachs economist Daan Struyven wrote. “As a result, net immigration currently accounts for virtually all of the 0.5% trend increase in the labor force,” he said. Ohio’s razzle dazzle leader seems ignorant on this key issue central to economic development.
Kasich may look back, fondly, on the days of President Ronald Reagan, one of his heroes, for his supply side beliefs. For Reagan, baby boomers and women were entering the work force. Today, baby boomers are leaving, presenting a population puzzle no amount of income tax cuts can cure. John Kasich will contribute to income inequality at best, and that’s not good.
Ohio’s High Cost Of College
Philanthropy Ohio highlighted three important problems, based on the report: Ohio allocates less of its state and federal expenditures toward higher education, with state appropriations per student about $1,900 below the national average; despite significant recent improvements, tuition at Ohio colleges is 11 percent higher than the national average for four-year public schools, and 14 percent higher for community colleges; and state need-based financial aid is $123 million below pre-recession levels, and “dramatically below all surrounding states.” Meanwhile, a new analysis from the Association of Independent Colleges and Universities says need-based aid, averaged across all full-time students, is at $188 per student in Ohio, compared to $497 in Kentucky, $841 in Pennsylvania and $955 in Indiana.
Maggie McGrath, project director for the Higher Education Compact of Greater Cleveland, said, “The combination of those three factors … puts higher education out of reach for much of Ohio’s population. That has big implications for Ohio’s future,” The Dayton Daily News reported. Tom Lasley, CEO of Learn to Earn Dayton, noted what business leaders Kasich might meet with may already know. If Ohio is going to be economically viable, “it needs more intellectual capital to make that possible, and college affordability is a key element to that.” Gov. Kasich has cut education at all levels, so what he’s selling may not be attractive enough for some business leaders to buy.
Ohio Losing Political Clout
Low income tax rates are high on the governor’s razzle dazzle wish list, but they cannot overcome or turnaround the stagnant population puzzle that plagues the Buckeye State. With Ohio’s population trending down, as more people move to Southern and Western states, Ohio’s political clout will likely take another hit following the 2020 Census. “Traditional Northern and Midwestern swing states like Pennsylvania and Ohio are likely to lose electoral votes and congressional seats, while states like Texas and Arizona — which aren’t swing states now but are becoming more competitive — are likely to gain them,” a report from FiveThirtyEight reported.
A state that once boasted 25 Electoral College votes in the mid-1920s, Ohio has lost seven. Like Rhode Island, New York, Pennsylvania, Illinois and Michigan, Ohio is likely to lose another vote, as population shifts reduce its congressional bench from 18 currently to 17. Ohio’s Electoral College clout has fallen to where it was in the 1830s, when it was a growth state representing new frontiers and new opportunities.
Kasich’s Bad Budget Pummeled
In one report after another on Gov. Kasich’s last bad budget, he’s taking hits for doing more of what hasn’t worked in the past. Since taking office, Gov. Kasich has cut over $1.7 billion in local community funding, money that cities and towns use to pay for police and fire, keep the roads paved and the water clean, and provide a quality public education to Ohio children, as one lawmaker summed up the toll taken by the governor’s budgets.
Another analysis, this one by Policy Matters Ohio, notes that Ohio has cut its state income tax by 30 percent since 2005. “The results of this experiment are in, and they’re not good,” the Cincinnati Enquirer reported. Jobs have grown just 1.9 percent, compared to a national gain of 8.5 percent, and the economic forecast behind Gov. John Kasich’s latest budget proposal indicates that Ohio’s growth will trail the country’s in output, personal income and jobs over the next two years.”
“The governor and his fellow Republicans in the legislature have put the squeeze on local governments, still bruised from the recession,” read an editorial in the Akron Beacon Journal.
Kasich’s budget presents problems for conservatives and liberals who find something to dislike in his executive budget. The Cincinnati Enquirer, a traditionally conservative, Republican newspaper wants lawmakers to do what the governor isn’t doing. “The General Assembly is expected to do an extensive rewrite of Kasich’s budget. As they do their work, our lawmakers should remember their roots and return the people’s money to local control.”
In advance of his penultimate State of the State Address, to be held this year in Sandusky, it’s a sure bet Gov. Kasich won’t mention any of the troubling news from above, that has his finger prints all over it. Whatever he’s selling, other states—where the workforce is growing and the workforce is educated—can match or beat.