July 12, 2013

Ohio’s labor force is shrinking, everywhere but Columbus

Filed under: Ohio Economy,Ohio Politics,Taxes & Government — Tom @ 6:50 pm

This column went up at Watchdog.org with minor edits late this afternoon.


Since Gov. John Kasich’s took office in early January 2011, Ohio’s labor force has noticeably contracted — except in Metro Columbus.

This is not a result anyone who attended a Clermont County Lincoln Day dinner at which Kasich spoke several years ago could have anticipated. Though it took place well before he declared his candidacy for the state’s highest office, and despite the fact that he was fighting a serious cold that evening, Kasich conveyed an almost overwhelming sense of confidence that he knew exactly what to do to get the state’s economy back on track if he were to earn the opportunity.

More than anything else, that self-assuredness is what ultimately carried Republican Kasich to a narrow 2010 victory over Democrat Ted Strickland, defeating an incumbent Buckeye State governor for the first time in 36 years.

2-1/2 years into his administration, Kasich’s major accomplishment has been the elimination of a looming $8 billion financial hole without raising taxes.

His video promoting the state’s next two-year budget beginning July 1 also touts how his administration “has shrunk the state bureaucracy by nearly 10 percent while improving services.” While that assertion seems shaky, a direct job-related claim Kasich makes certainly won’t ring true for most Ohioans, at least those with memories going back to the to the middle of last decade:

Opportunities for a good, rewarding job are more plentiful than we’ve seen in a long time.

With small and rare exceptions, that statement simply isn’t true, unless you happen to live in or decide to move to Metro Columbus, where a large portion of the alleged 10 percent cut in bureaucracy has presumably taken place — and especially if the job you’d like to pursue involves being your own boss.

The metropolitan and micropolitan area statistics published monthly by the federal government’s Bureau of Labor Statistics in its Household Survey sharply refute Kasich’s claim. Several micropolitan areas, generally defined as those containing “one or more urban clusters with a population of at least 10,000 but less than 50,000,” are shrinking seriously enough to raise concerns about their economic viability.

Economists have been justifiably troubled over historically weak nationwide workforce growth since the recession officially ended in June 2009, openly fretting over what to do about “the millions of workers who have dropped out of the labor force altogether.” But at least America’s overall workforce is growing. Sadly, that is not true in the Buckeye State.

Ohio’s statewide labor force contraction during the past two years has been serious enough, but it’s far more troubling after separating Columbus from the rest of the state’s results and comparing both to the entire U.S. (not seasonally adjusted figures were used because BLS does not prepare seasonally adjusted statistics for most metro areas):


Columbus is the only metro area showing beyond-neglible growth in the past two years:


The situation in Ohio’s micropolitan areas is even grimmer. Of the 29 micro areas BLS tracks, only Athens has a larger workforce. Altogether, the these areas have seen over 18,000 workers disappear. Six areas — Fremont, Marion, Tiffin, Van Wert, Washington Court House, and Wilmington — have contracted by more than 4 percent. All micro areas combined have lost almost 5 percent of their labor force in the past four years. There was little if any workforce shrinkage in most of these micro areas during the half-decade Before the 2008-2009 recession as traditionally defined began.

In the video mentioned earlier, Kasich points to how “Ohioans have created over 170,000 new private-sector jobs.” That statement, based on results in the BLS’s Establishment Survey of seasonally adjusted employer payrolls from January 2011 to May 2013, ignores the sharply lower employment increase of less than 52,000 during that same period found in its Household Survey. Even after adding back the roughly 14,000 state and local government jobs lost during that time, Household Survey job growth is less than 40 percent of what the Establishment Survey says. Oh, and well over one-third of those 66,000 Establishment Survey jobs have been created in — you guessed it — Metro Columbus.

All of this clearly indicates that the past 2-1/2 years has not been a period during which Ohioans have aggressively plunged into self-employment, contract work, and new business start-ups.

Though his new budget’s tax cuts are a step in the right direction, if Ohio is to again genuinely become “the state of big ideas” that Kasich notes that it once was, his administration is going to have to do a better job of creating a business climate which will allow entrepreneurs, especially in the struggling micro areas, to grow, prosper, and take on their won employees. Currently, it’s just not happening.


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