A Tough Job

Cleveland Plain Dealer - September 5, 2005

by Amy Hanauer, in The Cleveland Plain Dealer 

Compared to a generation ago, adult workers in Ohio and the nation are vastly more productive. American workers generate 78 percent more output per hour than they did in 1973, with a particularly steep ascent in the last few years. Ohio educational levels have not risen quickly enough, but they dwarf the schooling of our parents and grandparents, with 65 percent more college degree attainment than in 1979. And families are working much more: Two-parent families, for example, put in 18.4 percent more hours in 2002 than in 1979.

Yet, inflation-adjusted Ohio wages remain below 1979 levels and have been dropping for four years straight. Benefits have eroded, and family income has stagnated in recent years. Ohio employment levels remain hundreds of thousands of jobs below where they were when the recession began in 2001.

The manufacturing share of our economy has shrunk. Disturbing disparities endure. Where we used to outperform the nation, we now lag. In comparison with other states, Ohio’s economy has faltered. Policymakers who once disputed these facts now cite them to justify actions that will only worsen our problems.

Ohio policy has featured tax cuts for the wealthiest, poorly targeted tax abatements, sentencing guidelines that bloat our prison population and insufficient resources for education.

Federal policy has had similar elements, along with dramatically increased military expenditures and a soaring trade deficit.

The result of this failed strategy is made clear in Policy Matters Ohio’s new Labor Day report. We’ve lost jobs. Wages have fallen. Young people struggle to get the education they need. And poverty remains high, despite Cleveland having escaped last year’s burden of a first-place ranking. Yet many new proposals are tiresome echoes of failed ideas.

There are two ways to run an economy: a low road and a high road.

On the low road, we don’t invest in people or distinguish between good and bad jobs. We allow sprawl and pollution and don’t think about the long term. Worker training is sub-par; jobs are low-wage. Companies are reluctant to contribute their share to the economy; poverty and criminal justice costs are high, and creative solutions are out of our budget. Ohio’s approach exemplifies the low road.

How can we switch to the high road?

We must create an excellent educational system that produces a prepared and flexible work force. Tax fairly to get needed revenue and to reduce the impact of skyrocketing income and wealth inequality. Maintain a strong public sector that reduces crime and fosters vibrant communities that thrive in a more competitive economy. Enforce environmental and human rights standards with a fair-trade approach. Invest in infrastructure, energy efficiency and children’s development, all of which pay for themselves and begin generating dividends in a short amount of time. Energy efficiency (like adding insulation) can sometimes begin generating returns in reduced heating bills in as little as 4 to 5 years. Children’s development (like providing poor kids with high-quality preschool) results in reduced need for school intervention in the K-12 years, but the real “dividends” are generated at the 17-year mark when the kids who’ve been to preschool have much lower crime and pregnancy rates. After 30 years, the government gets back $3 for every $1 invested, according to economist Robert Lynch. And that doesn’t include the benefits from increased income taxes paid (since the kids will earn more than those who haven’t been to preschool).

Let’s focus on one high-road example. Ohio has some of the best manufacturing workers and infrastructure in the world. Its infrastructure is poised to capture jobs and investment if the state and country embrace the challenge of becoming more energy independent. Ohio could jump-start that process, as other states are doing.

We could have renewable portfolio standards for state government, which would ensure that a certain percentage of energy was purchased from renewable sources. We could use public dollars to retrofit existing buildings and increase their energy efficiency, using union workers to get the job done well.

Ohio’s manufacturing base could lead the way in supplying the entire nation with components for wind turbines and other renewable infrastructure – while also reducing pollution, increasing jobs and reducing dependence on foreign oil. Many of these ideas are being pioneered by a project called the Apollo Alliance, which has an innovative plan to achieve energy independence within one generation through strategic national, state and local investments.

The smartest states are endorsing and benefiting from this kind of big idea. With a little vision, Ohio could be a leader in energy savings, education levels and wage growth, instead of leading in foreclosures, bankruptcies and job loss. But it will take a new kind of policymaking that is focused on the incredible potential in our diverse, promising state. We are working harder, working smarter and working more. We should demand more reasons to celebrate on Labor Day.

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