November 21, 2012

Wise Stewardship Pays Off as Ohio’s Jobless Rate Falls Below 7 Percent

Filed under: Ohio Economy,Ohio Politics — Tom @ 11:05 am

JohnKasich2012Best in the Rust Belt.

This post went up earlier this morning at

The Kasich administration’s mostly wise fiscal stewardship continues to pay dividends to Ohio workers, who prefer jobs over unemployment.

The Bureau of Labor Statistics reported Tuesday thatOhio‘s seasonally adjusted unemployment rate fell to 6.9 percent in October, marking the first time that figure has been below 7 percent since August 2008. BLS data also show that the Buckeye State added 13,900 seasonally adjusted jobs, bringing total job additions during calendar 2012 to 97,600, one of the best performances in the nation.

Ohio’s results are all the more impressive when one looks at how it measures up to its immediate neighbors and fellow Rust Belt member Illinois. The unemployment rates and jobs added this year in Ohio and the six other states, sorted from the lowest to highest unemployment rate, are:

  • Ohio: 6.9 percent; 97,600 jobs; 1.9 percent workforce growth;
  • West Virginia: 7.5 percent; 13,200 jobs lost; 1.7 percent workforce contraction;
  • Indiana: 8 percent; 55,400 jobs; 1.9 percent workforce growth;
  • Pennsylvania: 8.1 percent; 39,400 jobs; 0.7 percent workforce growth;
  • Kentucky: 8.4 percent; 29,500 jobs; 1.6 percent workforce growth;
  • Illinois: 8.8 percent; 36,600 jobs; 0.6 percent workforce growth;
  • Michigan: 9.1 percent; 11,800 jobs; 0.3 percent workforce growth.

Every state listed, except Ohio and West Virginia, had an October unemployment rate that exceeded the national rate of 7.9 percent. Unfortunately, West Virginia has been losing jobs because of the Obama administration’s well-documented war on coal; sadly, that also has affected the Buckeye State, or its numbers would be even stronger.

Though Indiana’s unemployment rate is high, it has come down from 8.9 percent, a change that could be attributed to the Hoosier State joining the ranks of right-to-work states earlier this year.

Pennsylvania’s and Kentucky’s high unemployment rates can be blamed partially on the war on coal. The Keystone State‘s percentage workforce growth is especially anemic when one considers that its oil and gas industry has been doing quite well and hiring plenty of workers in the process. Meanwhile, the Bluegrass State‘s workforce growth appears acceptable at first glance, but should be much higher given its legions of unemployed.

That leaves the economic basket cases, Michigan and Illinois.

Michigan suffered mightily during the past decade under Democratic Gov. Jennifer Granholm. Its unemployment rate peaked at 14.2 percent in August 2009, and was still 11.2 percent when Republican Rick Snyder took office in January 2011. Snyder’s fiscally sensible policies took the state down to 8.3 percent this spring, but it has since spiked dangerously upward, possibly because Snyder has, like so many other Midwestern governors before him, become too receptive to raising taxes.

Though Illinois’ performance this year is slightly better than Michigan’s, its nearly two-year record since it passed massive income tax increases in January 2011 is far worse. The Illini State‘s unemployment rate is only 0.7 points lower than it was at the end of 2010, while the state has added only 68,000 jobs.

Why has Ohio outpaced these other states? First, Gov. John Kasich put the state’s fiscal house in order. Despite inheriting a potential $8 billion budget shortfall from predecessor Ted Strickland when he took office in January 2011, Kasich and the General Assembly balanced the state’s budget without raising taxes. He also hung out the “open for business” sign and made it a priority to keep employers in the state while encouraging out-of-state companies to expand or relocate.

There have been failures, most notably the attempt to rein in public-sector unions. There are also potential policy blunders he must avoid to keep the momentum going, particularly his ill-advised scheme to heavily tax the state’s growing energy industry. But on balance, Team Kasich has done well.

One thing I don’t expect to see is complacency. Kasich would be the first to say the state’s unemployment rate needs to drop by at least 2 points before he’ll be even remotely satisfied. Sadly, he’s largely at the mercy of the politicians in spending-addicted Washington, D.C., in improving things much further.


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