April 19, 2011

Ohio’s Employment Situation is Improving; Kasich Gets the Presumptive Credit

Filed under: Economy,Taxes & Government — Tom @ 3:28 pm

Today’s Regional and State Employment and Unemployment release by Uncle Sam’s Bureau of Labor Statistics shows that conditions for Buckeye State workers are improving. Of course, there’s going to be a tug of war between ex-Governor Strickland and current Governor John Kasich for credit. In a sense I don’t care, because I just want to see things get better, but if were going to pin the credit on someone, it would not be Donkey Ted.

Some of the numbers:

  • (Table 3) Ohio’s seasonally adjusted unemployment rate was 8.9% in March, just barely above the nation’s overall rate of 8.8%. February’s rate was 9.2%. I don’t have time to fully check this, but I’m pretty sure it has been a very long time since the state and national rates have been so close (Note: I stand corrected on this point, as November’s 9.8% Ohio rate was the same as the national rate; however, the next sentence remains true, and has been generally so for at least several years, as seen in Comment 2 at below.) More typically, Ohio’s rate has been a half-point to a full point higher.
  • (Table 4) The raw unemployment rate (i.e., not seasonally adjusted) is 9%, down from 9.8% in February. That 0.8% one-month drop compares with last year’s February-March drop of 0.5%, from 11.5% to 11.0%. Only Kentucky (from 11.2% to 10.2%), New Mexico (8.8% to 7.4%), and Oklahoma (7.4% to 5.7%) had larger raw one-month drops.
  • (Tables 3 and 4) The out-of-state exodus and workforce dropout phenomena seen during the Taft and Strickland eras may be coming to a halt. The seasonally adjusted workforce was essentially the same in January, February and March, while the number of unemployed dropped by about 25,000. That means that the unemployed were finding work in Ohio, not leaving the state in hopes of finding it elsewhere or dropping out and giving up. Not seasonally adjusted, the workforce grew by 2,800 in March, while the number of unemployed dropped by a very impressive 47,700.
  • (Tables 5 and 6) More Ohioans are working. The seasonally adjusted Establishment Survey of businesses shows a 2,200-job pickup in March. The month’s not seasonally adjusted increase (i.e., the actual increase in the number of people found working) was 20,200.

Strickland defenders who want to claim hangover credit for the improvements described are going to have to point to some kind of policy specifics driving this improvement. Good luck with that.

The more likely answer is that after seeing November’s election results, Ohio’s businesses and out-of-state businesses looking to locate or expand in Ohio realized that Buckeye State would finally be open for business again, and that taxes will probably not go up, even as Governor Kasich and the General Assembly wrestle with the $8 billion millstone Ted Strickland hung around their necks as he left the Governor’s mansion. Expectations matter; expectations have improved, and it appears that opportunistic businesses are acting on those expectations.

But, as is said frequently elsewhere: Faster, please.

Today at the Cleveland Plain Dealer, Reginald Fields has a lengthy write-up on Kasich’s first 100 days. Bottom line, to me: Kasich on substance is on track to accomplish a lot, though his style is sometimes lacking (as I noted here back in February). I’ll take the latter if it gets me lots of the former; I’ll bet that most beleaguered Buckeye Staters who have endured 12 years of Taft-Strickland drift would agree.

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4 Comments

  1. It’s amazing you actual give people financial advice for a living. The unemployment rate has been dropping for thirteen consecutive months now. John Kasich had nothing to do with it.

    Nor did John Kasich have anything to do with the job growth in the first three months. To suggest otherwise is fanboydom run amok.

    Ohio hasn’t seen an economic turnaround like this since 1983, and John Kasich has absolutely no reason to take credit for it as he’s done nothing.

    You can’t remember the last time Ohio’s unemployment rate was this close to the federal? Try November 2010.

    By the way, Ted Strickland’s budget cut taxes 24% over his term. John Kasich’s budget keeps taxes at the same level as they were under Strickand.

    Comment by Modern Esquire — April 19, 2011 @ 8:02 pm

  2. #1, what a load of rubbish — accompanied of course by a personal attack. I guess you lost the Gabrielle Giffords new tone memo too.

    If indeed the rates were the same in November 2010 (they were), I apologize and have corrected.

    Otherwise, the following points stand:

    - Ohio’s unemployment rate has historically been higher than the national rate for a long time: Evidence:
    – June 2010 — Ohio 10.5, National 9.5
    – June 2009 (same link as 2010) — Ohio 10.5, National 9.5
    – June 2008 — Ohio 6.6, National 5.5
    – June 2007 (same link as 2008) — Ohio 5.7, National 4.6
    – June 2006 — Ohio 5.1 , National 4.6
    – June 2005 (same link as 2006) — Ohio 6.0, National 5.0

    That goes back as long as I’ve been blogging.

    - Your challenge remains to name a specific Strickland policy that is responsible for the carryover improvement. I’m still waiting for that, as you haven’t named one. As noted in the post: Good luck.

    - Ted Strickland’s budget didn’t “cut taxes.” Some property taxes were reduced at the local level, and that’s about it. Tax rates went down once or twice according to the schedule the 2005 Taft tax bill suggested. Strickland and the General Assembly decided at the last possible moment to cancel the scheduled reduction for calendar 2009. Since Ohioans had gone through the year believing that taxes would go down and in fact had taxes withheld from paychecks on that basis, the last-minute switcheroo was a de facto tax INCREASE that in size and scope was bigger than any Strickland-initiated tax reduction during his term.

    - Your claim about Strickland cutting taxes 24% is the funniest thing I’ve seen in a long time. Here’s the truth, pal: The Strickland/Obama-driven business climate has been so bad that Ohio’s tax COLLECTIONS probably went down 24%, because the economic activity that generates income, sales, and other taxes went down. By your logic, since federal tax collections were about $2.6 trillion in fiscal 2008 and went to about $2.1 trillion in just a couple of years, Barack Obama is the greatest “tax-cutter” in history! Woo hoo!. Uh, no. In pure dollars, Barack Obama and his cohorts Pelosi and Reid and their party are the greatest economic activity-stifling, going Galt-creating politicians in history.

    - You don’t get, and you’ll never get, that EXPECTATIONS MATTER. The reason my call on the POR (Pelosi-Obama-Reid) Economy in June 2008 remains perfectly correct today is that I saw that the EXPECTATIONS of business, investors, and entrepreneurs were being fundamentally altered by candidate Obama and his Democratic Congressional cohorts. That’s when the real recession began, because EXPECTATIONS changed drastically for the worse. The fears raised in the summer of 2008 have proven to be totally justified — and then some.

    - My call on how Kasich’s election (and the election of a tolerable Republican ticket) changed expectations, though tentative (as you see by my expression that it’s “the more likely answer”), is the more logical explanation for the very significant improvements seen in March and to a lesser extent the previous months. The “fanboys” you’re referring to are businesspeople, entrepreneurs, and investors deciding how to best deploy their capital and where to build and expand. They are “fanboys” and “fangirls” of healthy business climates, predictable state policy, and necessary but reasonable regulation. I believe they are making more decisions to stay, expand, or invest in the state (e.g., Bob Evans, Diebold, and others) — finally after all these years of seeing companies like NCR, Honda, and others either fly the coop or expand elsewhere.

    - The fact remains that Strickland and the previous GA dumped an $8 billion deficit on Kasich, which he is actually working to solve instead of going to Washington expecting a government that is already $14 trillion in debt to further bail him out.

    The facts also show that, with the exception of what I voluntarily and cheerfully chose to correct, you’ve been thoroughly discredited, as usual. Come back again when you want to get your clock cleaned.

    Oh, and I almost forgot one thing … to remind readers of (in your own words, not a personal attack) the pathetically ignorant, “woe is me” creature you are.

    Comment by TBlumer — April 19, 2011 @ 10:30 pm

  3. Blumer you’ve been wrong in so many economic predictions, it’s stunning you still make them.

    I’d note that you have NO RESPONSE, none, to the fact that Ohio’s unemployment rate has already been on the downswing for thirteen months, which btw, is when polling still showed Strickland sitting on a five-point lead over Kasich.

    You had no response to the fact that the past thirteen months in Ohio is the best economic recovery we’ve seen since 1983.

    What did Strickland do to deserve the credit? He reversed a disasterous electricity deregulation plan that the Ohio Manufacturers Association warned that if it wasn’t reversed would cause massive utility rate hikes in Ohio that would harm the economy. He promoted the development and commercialization in Ohio of the next generation in energy technologies, expanded Third Frontier, enacted what the Buckeye Institute called the most fiscally conservative budgets in Ohio history (included the current Kasich budget pending in Ohio), and yes, cut taxes 24%.

    What does Kasich’s budget do with taxes? It keeps it the same rate as they were before Kasich took office. This Kasich calls a major achievement: to maintain the status quo of Ted Strickland’s tax policies.

    Meanwhile, in case you missed it, your federal tax rates have never been lower. Obama has LOWERED the federal income tax rate. You paid less in federal taxes under Obama than under Bush. That’s a simple fact.

    I’m talking about the tax rate, not collections, you fool who refutes a proposition nobody makes.

    And btw, the Kasich Administration confirmed that it did, in fact, approach Sherrod Brown to extend the stimulus program to help Kasich balance his budget, a budget that relies on a Washington bailout that doesn’t even appear to be in the works.

    Sorry to disturb the couple of readers you still have.

    Also, Ohio’s unemployment rate has been around the federal rate around and since November, too.

    Comment by Modern Esquire — April 20, 2011 @ 2:42 pm

  4. #3, Poor ModEsq, so much ignorance, so little time.

    You can’t POSSIBLY claim that this is the best economic recovery for Ohio since 1983 until the GDP by state report comes out later this year. FYI, so you can mark your calendar, it’s coming out on June 7.

    The current GDP by state info at the BEA web site shows that Ohio’s GDP contracted by 2.7% in 2009, which puts it in the second quintile (i.e., the BOTTOM 40%) of all states. Wowie zowie.

    Since you’re making hay of so many supposedly great months, let me point out the following: In 2010, the last 12 months of the T-Shirt Ted admin, Ohio added about 34,000 seasonally adjusted jobs (5.0342 million here at Table 5 minus 4.9984 million here at Table 5). Look at the links, you dummy. During 2010, the country gained 940,000 seasonally adjusted jobs. Ohio’s gain is basically proportional to the rest of the country’s. I’m supposed to be impressed?

    Simply stated, your claim of wonderfulness achieved during the final year of the Strickland administration magically carrying into 2011 is like most of what you write: rubbish. Oh, and I would submit that Kasich might be able to credibly claim credit for the wondrous November drop in the unemployment rate you cite, simply because it was clear by October that he wasn’t going to lose, i.e, the expectations change was already in gear. That’s how the expectations magic works, just like the negative expectations that created the POR economy which preceded the actual election of Obama by a solid 5 months.

    Also, as previously stated, the tax decreases cited were predominantly put in place in 2005′s tax legislation under Taft. I cited collections because I really didn’t think you could be so dumb as to give Strickland credit for tax cuts passed before he showed up. I was wrong; you really were that dumb.

    Any time you want to get your butt kicked again, just come on by.

    Oh, and I’m still waiting for you to ID a single Strickland admin policy initiative that led to even the pathetic improvements just shown.

    As to traffic, considering the visibility at NewsBusters and Pajamas, my observation is that three far-lefties and an occasional guest are eating the dust of one sensible conservative and an occasional guest. Hope it tastes good.

    Comment by TBlumer — April 20, 2011 @ 3:58 pm

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