A study by a progressive-leaning think tank shows Ohio continues to have high rates of unemployment and low wages. But a conservative critic says the situation is not as bad as the study indicates. Ohio Public Radio's Karen Kasler reports.
There’s one work that sums up Ohio’s economy right now, says Amy Hanauer with the progressive think tank Policy Matters Ohio. That word is “stuck”.
“We just are stuck. We are stuck with low labor force participation. We are stuck with high rates of unemployment. We are stuck with very low rates of job creation and we are stuck with low wages in Ohio.”
Hanauer says labor force participation is at a 33 year low, job growth is fourth worst in the nation since 2005, wages are already low and only went up a penny in the last year.
“I think that we are just not coming out of the last recession in the way that we’ve emerged from previous recessions. I think we’re not putting the right policies in place, and I think that the mix of industries for our, for a better recovery in Ohio.”
But at least one conservative economist who also follows Ohio’s labor market says this report paints an unfairly dismal picture. Richard Vedder is a distinguished professor of economics at Ohio University.
“We have gone from above the national average in unemployment to below the national average. So I think it’s pretty hard to argue that Ohio has had a horrible experience compared to the rest of the nation.”
Vedder admits he agrees with some of Hanauer’s points – though he disagrees on her explanations about them. He says Ohio’s wages are lower but that’s because of a massive labor force restructuring because of declining manufacturing. Vedder says lower than average productivity growth is more a result of global factors than state policy. And Vedder says American wages in general have been sluggish, so Ohio’s experience is no different.
“Workers aren’t booming these days because economic growth is not booming these days. Economic growth in Ohio is not booming these days. We have had a national growth slowdown of which Ohio is sharing in.”
Vedder and Hanauer also agree that there are worries for certain populations of workers – women, African Americans, and those between 16 and 24. And they agree that long-term unemployment is a problem.
Vedder: “Is it true that long term [un]employment is greater than it was a few years ago? Yes it is, because we’re giving jobless benefits now for over 70 weeks to workers where we only used to give them for 26 weeks. When you lose your jobless benefits, you tend to go out and get a job.”
Hanauer: “He could not be more wrong. I mean, the problem is that the jobs are not being created. We have the fourth worst rate of job creation. If the jobs were created, workers would take them. And the fact is that a lot of people whose unemployment benefits have already expired cannot find a job in this economy.”
Hanauer says the state can do more to spur the economy by investing in education from preschool till retirement. Vedder says he thinks the state to allow the market economy to work – he also uses one word. That word is “relax”.