News Intelligence Analysis
From MSNBC
Ohio State's Lost Jobs Campaign Issue
Ohio's 68th Governor Will Face Big Job
Reversing State's Economic Fortunes
By Kevin Kemper
Business First of Columbus
Updated: 5:00 p.m. PT June 25, 2006
When Techneglas Inc. closed its Columbus television tube factory
in 2004, it threw 358 employees out of work.
One of those without a job was Rick Bolton, a furnace foreman at the plant for 16 years.
"I was a former truck driver in the '80s before Techneglas and I said I would never drive again," the 46-year-old Bolton said.
But Bolton is driving a truck again, yet he's feeling fortunate to be earning more than the $19.97 an hour he made at Techneglas. He knows many of his former co-workers weren't so lucky, moving into jobs that pay less than half of what they took down at the tube plant.
From Toledo to Cincinnati and Cleveland to Columbus, what happened to Bolton played out roughly 217,800 times in the last eight years - one for every manufacturing job Ohio lost in that span.
When voters show up at the polls this November to elect either Republican Secretary of State J. Kenneth Blackwell or Democratic U.S. Rep. Ted Strickland as governor, the winner could be the one whose plan to reverse manufacturing job losses and other economic problems in the state resonates most with Ohioans.
Indeed, the next governor faces a daunting challenge in repairing Ohio's tattered economy. While the U.S. economy has been expanding since the last recession ended in November 2001, many Ohioans wouldn't know it. Employment growth in the state has been comparatively anemic, never growing more than a half-percent annually until 2005, when payrolls grew a mere 1.2 percent.
"Ohio is struggling. It's moving forward, growing, but growing slowly," said Jim Coons, president of J.W. Coons Advisors LLP in Columbus and a member of Gov. Bob Taft's Counsel of Economic Advisors.
Prior to the last recession, Ohio enjoyed its brightest employment picture in February 2001, when 5.58 million residents had a job, according to the U.S. Bureau of Labor Statistics. The 2001 recession began the following month and employment in Ohio dropped quickly. More than 89,000 had lost their jobs by October 2002.
It wasn't until this past January that the state fully recovered, finally surpassing that high-water employment mark. As of March, a record 5.6 million Ohioans were employed.
But, according to Bolton, the view on the ground is much different.
"Ohio has a lot of employed people. The unemployment rate is probably low, but it's not a reality number because when you go from a pay rate of $20 down to $9, $10 or $11 ... the economy is down," he said.
The Taft years
Bolton has a point. Since Taft took office in 1998, many of the
state's high-wage industries have been scaling back, according
to the Bureau of Labor Statistics. Ohio businesses in the information
industry eliminated nearly 14 percent of their work force between
January 1998 to January 2006, while utility companies shed more
than 20 percent of their employees.
And Ohio's largest and most important job sector - manufacturing - has taken a severe hit. Employment in the manufacturing sector has declined 21 percent over the last eight years, from more than 1.03 million jobs in January 1998 to about 812,000 jobs this past January.
Those higher-wage jobs have been replaced, but mostly by positions in industries that typically pay their workers less. Education and health services increased employment by more than 17 percent over the eight years, and jobs in leisure and hospitality services increased by more than 8 percent. Transportation and warehousing jobs also increased 12 percent.
Higher paying white-collar industries expanding in Ohio include the finance and insurance sector and professional and business services, which increased their payrolls by 8 percent and 6.7 percent, respectively.
The federal government, meanwhile, cut back almost 9 percent of its Ohio work force over the last eight years, but state government has increased employment by 1.5 percent.
Personal income in Ohio hasn't fared much better. Per-capita income in the state increased 25 percent from $26,017 in 1998 to $32,478 in 2005, according to the U.S. Bureau of Economic Analysis. That growth rate placed Ohio 44th among the states.
While it's true Ohio's economy hasn't been at its best under Taft's stewardship, Coons argues the economy is not something one elected official can change dramatically.
"At the national level, the president gets a lot more credit when the economy is strong than he deserves, and he also gets a lot more blame than he deserves. It's the same at the state level," he said.
What concerns Coons is that demographic trends are not working in the state's favor. Census Bureau estimates reveal Ohio's population did not grow more than 0.3 percent in any one year between 1998 and 2005, and grew a combined 1.4 percent during that period to 11.46 million.
Meanwhile, Midwest states with comparable populations to Ohio's grew at a faster clip. Michigan, which arguably has an economy lousier than Ohio's, grew 2.8 percent from 9.84 million in 1998 to 10.12 million in 2005. Illinois, which started out with 12.3 million residents in 1998, grew 4 percent to 12.76 million in 2005.
Illinois, meanwhile, is also beating Ohio when it comes to economic output, measured by gross state product. Data from the Bureau of Economic Analysis consistently places Illinois among the top five states with the highest GSP.
In 2005, Illinois GSP was $560.23 billion, compared to Ohio's $442.44 billion.
What the people want
At the Ohio Manufacturing Association, a trade group based in
Columbus, there is optimism despite the dour statistics, said
Eric Burkland, the association's president.
The manufacturers that survived brutal economic conditions over the last four or five years are more innovative and productive than ever, Burkland said.
Those companies now are looking for a commitment from Blackwell or Strickland to continue reforms started by Taft.
Tax, tort and some environmental permitting reforms completed over the last two years have helped the state retain and attract more manufacturing jobs, Burkland said.
Burkland pointed to Whirlpool Corp.'s recent plans to consolidate more than 1,100 factory jobs from its purchase of Maytag Corp. to its plants in Marion and Clyde. Burkland said the decision to move those jobs to Ohio from Arkansas and Illinois was due in large part to tax reforms promoted and signed into law by Taft last year.
"Companies are looking for a stable, predictable, competitive environment and we're looking for a governor that understands that," he said. "This is about men and women competing against the world."
Manufacturers aren't the only ones that feel that way.
"We think the next governor has to focus like a laser beam, as priority No. 1, No. 2 and No. 3, on the development of our economy and the creation of new jobs," said Dan Navin, assistant vice president of tax and economic policy for the Ohio Chamber of Commerce business organization. "It's from increasing the flow of our economy that everything else flows."
© 2006 Business First of Columbus
URL: http://msnbc.msn.com/id/13548245/
© 2006 MSNBC.com
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