Is ‘right-sizing’ government hurting Ohio’s economy?

Columbus Dispatch - August 26, 2013

This story in the Columbus Dispatch does a good job of laying out what the loss of public-sector jobs has meant for Ohio:

Ohio has lost government jobs at a steeper rate than most of the United States since January 2009, and the cratering public sector is having a negative impact on the state’s overall economic recovery.

During the past 4 1/2 years, a period that includes the end of a national recession, Ohio has shed 47,900 federal, state and local government jobs for a 6 percent drop, according to the U.S. Bureau of Labor Statistics.

Only California, New York and Florida have lost more government jobs, and Ohio’s drop percentage is more than triple the national median rate.

Most of Ohio’s public-sector pain has been felt at the local level — think police forces, firehouses, road crews and schools — where 45,100 jobs have been lost, an 8 percent decline.

The story quotes economists and others about how “this phenomenon has certainly take steam out of the recovery,” and calls into question the Kasich administration’s claim that government in Ohio is simply “right-sizing.”

Policy Matters workforce researcher Hannah Halbert is one of the experts the Dispatch relies on to tell the story: 

“A job is a job — whether you’re working at Ford, Nationwide, the state of Ohio or a municipality, it’s still income that spends in the local economy,” said Hannah Halbert, policy liaison for Policy Matters Ohio, a labor-backed research group in Cleveland.

During recovery periods after previous recessions, usually there is stability or growth in public jobs that helps get the economy back on track, Halbert said. “We’re kind of acting in an opposite way,” he said.

“We’ve taken this austerity approach toward budgeting, both at the federal and state level, and this is the consequence of that,” she said. “We’re not seeing the kind of private job growth that this kind of policy has promised us.”

The piece ends with this observation:

“I don’t see why we value a teacher or a policeman or an emergency responder any less than or more than a banker, a desk clerk at a hotel, someone who works at a retail shop,” said Mark Zandi, chief economist at Moody’s Analytics and a former adviser to former GOP presidential nominee and U.S. Sen. John McCain of Arizona.

“They’re all very important jobs that provide a very important service.”

Is ‘right-sizing’ government hurting Ohio’s economy?
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