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Before Kasich's speech, what is Ohio's true 'state of the state'?

By Randy Ludlow • Apr 3, 2017 at 9:04 PM

Gov. John Kasich might point out again that these are lean times when he delivers his State of the State address tonight.

Amid a downturn in anticipated tax collections, there's not enough money coming in to finance frills in the "tight" state budget, the second-term Republican has said.

Many average Ohioans might agree with the governor when assessing their own economic well-being.

Accompanying a national softening of the lengthy economic expansion since the recession, the number of new jobs isn't what it used to be in Ohio.

The Columbus Dispatch's annual review of economic indicators shows a mixed picture as Kasich prepares to deliver his next-to-last State of the State address, this time in the Sandusky State Theatre near Lake Erie.

Kasich's emphasis is one of Ohio pursuing good-paying, high-technology jobs, such as those accompanying driverless vehicles and drones, to diversify the state economy.

The jobs of the future, however, are not of much immediate help to many Ohioans' bottom lines.

Job growth in Ohio last year fell to its lowest point since 2010 — the year before Kasich took office — with 38,500 jobs created, or about half of the 77,300 jobs the state gained in 2015.

Even after an encouraging uptick of 15,200 new jobs in February, the state has gained 45,600 jobs over the past 12 months, with a 0.85 percent growth rate placing it 36th among the states — half of the national average of 1.66 percent, according to rankings by the W.P. Carey School Business at Arizona State University.

From the February 2010 low point of private employment, Ohio has added 520,000 jobs, an increase of 12.3 percent, compared with the national rate of 14.8 percent. Many of those jobs came in the lower-paying leisure and hospitality sector (92,700 jobs), and in professional and business services (104,100), according to federal figures.

By the end of last year, Ohio had gained a net 113,400 jobs since the recession began in early 2008, a 2.5 percent rate, which is less than half of the national 6.1 percent figure. Unemployment stood at 5.1 percent in February, above the U.S. rate of 4.7 percent, with 294,000 Ohioans out of work.

Ben Ayres, a senior economist with Nationwide in Columbus, said Ohio largely has mirrored what is happening nationally as the record-long comeback from the recession slows. He doesn't expect 2017 to see a return to the job-growth levels of even 2015 in the Buckeye State.

Ohio, a leading state in the production of cars and vehicle parts, remains top-heavy in its reliance on manufacturing, Ayres said. While the sector offers good wages, its long-term prospects do not promise growth, as increasing automation continues to displace workers from the assembly lines, he said.

The gains Ohio has seen are not being broadly shared. "Families that do have good-paying jobs are doing rather well. But a certain amount of the populace without good job prospects, who don't have the education levels to get the great jobs, are continuing to fall behind," Ayres said.

One Ohio Now, a nonprofit group that says tax cuts have robbed the state of billions that could have been used to combat social ills, is releasing a report Monday that concludes: "Ohio is facing serious challenges."

Above-average infant-mortality and hunger rates, lackluster minority high school graduation rates, high college tuition costs and poverty- and job-growth numbers show a need for investment to confront "persistent inequality," the group says.

Seven years after ranking fifth in the nation, Ohio's education system tumbled to 22nd among the 50 states and District of Columbia, according to the January 2017 national Quality Counts report card by Education Week, an education trade newspaper.

The Kasich administration points to 460,300 private-sector jobs created on the governor's watch since the start of 2011, above-average income growth, declining poverty, greatly increased health coverage for the poor through Medicaid expansion and a rise in Ohio's stock with the business community and would-be job creators.

The state's average weekly wage has grown 16.8 percent since 2011, better than the national rate of 12.8 percent. Last year, average weekly wages increased 1.8 percent to $817.03 ($42,386 annually) while the national increase was 0.8 percent to $894 ($46,488 a year).

But Ohio's median household income stands at $53,301 — $3,215, or nearly 6 percent, below the national average — placing it 32nd among the states. Since a high point in 2000, Ohio's household income has fallen 9.9 percent as compared with 2.4 percent nationally.

Ohio followed the national trend of a decline in poverty in 2015 (the latest figures available) for the first time in five years after largely holding stagnant.

About 14.8 percent of Ohioans — nearly 1.7 million individuals and 314,000 families — live in poverty, according to a February report by the Ohio Development Services Agency. The national rate was 14.7 percent.

African-Americans (29.1 percent), those living in central cities (26.1 percent) and households headed by single mothers (43.1 percent) are struggling to secure basic necessities. Poverty is defined as annual income of $12,060 or less for an individual and $24,600 for a family of four.

The percentage of Ohio schoolchildren eligible for free or reduced-price school lunches declined to a post-recession low of 41 percent this year, a drop of about 20,000 children, or 2 percent, from last year.

Ohio's lackluster job growth also could be a factor in the state's stagnant population. People tend to live where jobs are readily available. And more people means more tax income for governments, as well as more consumer spending to boost local economies.

Ohio gained only 9,000 residents last year, as its population ticked up to 11.6 million, a growth rate that ranked 40th among the states, according to U.S. Census figures.

However, not all indicators are pessimistic.

For the fourth straight year, Site Selection magazine awarded Ohio second-place in its "Governor's Cup" economic-development competition. Ohio's 515 projects (defined as a $1 million investment creating at least 20 jobs, not including retail, hospital or government projects) placed second, to Texas' 624. Ohio was third in projects per-capita in 2016, behind the winner, Nebraska, and runner-up Kentucky.

Forbes' "Best States for Business Survey" gave Ohio its highest-ever marks for its economic climate, ranking the state seventh in the U.S. Chief Executive magazine rated Ohio as the 10th-best state for business in 2016, a jump of a dozen spots.

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©2017 The Columbus Dispatch (Columbus, Ohio)

Visit The Columbus Dispatch (Columbus, Ohio) at www.dispatch.com

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