Strong job growth in June marks the three-year recovery anniversary

July 20th, 2012
   

“June’s employment numbers suggest that Ohio’s recovery, while not as strong as it needs to be, has regained some steam. Public job loss has been an unnecessary drag, however – if we weren’t cutting local public sector jobs, nearly 30,000 more Ohioans would be employed. We need investment, not austerity, to restore our communities.” Hannah Halbert, Policy Liaison with Policy Matters Ohio.

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Data from two separate surveys released by the Ohio Department of Job and Family Services (ODJFS) today suggest that the Ohio recovery is back on track. The state’s unemployment rate continued to fall in June, dropping 0.1 percent to stand at 7.2 percent according to seasonally-adjusted data released from ODJFS’s survey of households for June 2012.  While the falling unemployment rate is good news for Ohio, the state’s labor force numbers continue to decline, losing 18,000 workers in June. This is a worrying trend and suggests that even with the recent job gains there is still weakness in the state’s labor market. 

A separate survey of employers also released today by ODJFS showed that Ohio added 18,400 jobs in June. Month-to-month data is highly subject to revision, and it is ill advised to make too much of month-to-month comparisons. This month’s report shows that Ohio posted job gains of more than 18,000 in both May and June, erasing the job declines of early spring.

There is more certainty in examining longer-term job trends. Since June 2011, the state job total has grown by 100,000 jobs or 2.0 percent. At this rate, it will still take slightly less than three years to generate the additional 244,500 jobs needed to return Ohio to pre-2007 recession levels of employment. That figure would be even higher if population growth were taken into account.

Figure 2 shows Ohio’s long slog out of the recession.  The figure highlights changes in the Ohio job market from key points in time, including the 2001 and 2007 recessions, and the 2005 approval of a major state tax overhaul, which promised speedier economic growth. These figures include the latest seasonally adjusted data from the monthly survey of employers (Current Employer Survey) done by ODJFS in co-operation with the U.S. Bureau of Labor Statistics. 

Table 1 details these changes. Not only is the state struggling to recover from the 2007 recession, Ohio never recovered from the 2001 recession, having lost more than 416,000 jobs since that recession began. Since the start of the 2007 recession, the state has lost 244,500 jobs. If Ohio had avoided cuts to local public jobs at the end of the 2007 recession, an additional 29,800 Ohioans would be employed.

June 2012 marks the three-year anniversary of the official end of the catastrophic 2007 recession. Even with the most recent gains, recovery in Ohio remains painfully slow. Over the last three years, the state has had modest job growth of just 2.5 percent, with the addition of 125,100 jobs.

As Figure 3 shows, the job loss that occurred in the 2007 recession was much deeper than the two prior recessions. Figure 3 also demonstrates that unlike the period after the 2001 recession, which never quite produced job gains for the state, the recovery from the 2007 recession has not been jobless. The 2007 recovery, unlike the 1990’s recovery, has been built on very modest growth, extending the pain of the recovery over years not months. 

While job growth has been seen in many sectors, professional business services, and manufacturing have driven Ohio’s recovery, growing 8.0 and 7.6 percent respectively. Growth in manufacturing is particularly good news because the sector has historically produced the kinds on jobs that provide family-sustaining wages and benefits. 

 Four sectors continue to see declines. Construction is down 0.1 percent over the recovery, financial services are down 1.1 percent, public jobs are down 3.0 percent, and the largest decline is in information services, which has lost 4.5 percent over the recovery period. Figure 4 shows the percent of job growth or loss, by sector over the three-year recovery period.

Public job loss has been an unnecessary drag on the state’s recovery, with a 3.0 percent job decline over the recovery period. As demonstrated in Table 2, all of Ohio’s public job loss has occurred at the local level – there have actually been slight gains at the state level. As local public jobs disappear, vital neighborhood services also vanish. This public job loss can also be a drag on private jobs, as public employees and public programs have less to spend in the private economy.

 

Recent WARN notices in Ohio
The Worker Adjustment Retraining Notification (WARN) Act protects workers and communities by requiring employers with more than 100 employees to provide 60 days’ advance notice of plant closures or mass layoffs. Federal, state, and local government entities are not covered. WARN triggers rapid response services, which can include layoff aversion, training and dislocated worker assistance. As Table 3 shows, six WARN Act notices were filed with ODJFS in June, impacting 677 workers, of whom 451 are in a union. While the number of notices and the number of workers impacted by mass layoffs are down in June, many of the WARN layoffs occurred in auto-component manufacturing. Johnson Controls’ idling of its Northwood plant, which makes seats for the Jeep Liberty, impacted the largest number of workers.

Conclusion
Today’s report is good news for the state, and certainly better than many previous months. Nonetheless, one thing is clear: Ohio remains a long way from robust recovery. The state has made consistent but very modest gains over the three-year recovery period.  Our state budget built on local austerity has undercut local public jobs, creating a drag on our recovery and eviscerating local services. We need increased investment, not austerity, to restore our communities and grow good jobs.

JobWatch is an ongoing project of the Economic Policy Institute (http://www.epinet.org) and Policy Matters Ohio, (http://www.policymattersohio.org). Both are nonprofit policy research institutes.