Ohio Unemployment is Nearing Historical Highs

WKSU - September 5, 2011
   

The state’s decline in wages is even more dramatic

WKSU

A new report on the workforce in Ohio shows the state is hitting some historical
highs. But while everyone can agree this is bad news, Ohio Public Radio’s Karen
Kasler has two different views on those figures.

This Labor Day is nothing to celebrate if you’re looking at Ohio’s jobless rate,
says Amy Hanauer with Policy Matters Ohio.

“Male employment levels are the lowest they’ve ever been since they’ve been
keeping track. Long term unemployment as a percentage of the unemployed is
the highest it’s ever been, and our wages in Ohio seem to be going down more
quickly than in any other state.”

Hanauer says median hourly wages declined more in Ohio than in any other state
between 2000 and 2010. Overall, it’s a report that Hanauer describes as dismal.
“We’re really getting away from making sure that every Ohioan can contribute to
and benefit from our economy.”

And a well known conservative economist agrees with Hanauer, at least about the
statistics. Richard Vedder is a distinguished professor of economic at Ohio
University. He says the report’s claims that jobless among men and long term
unemployment are at historical highs are on target, and he says while he hasn’t
checked it, it’s entirely plausible that Ohio has seen the worst wage declines in
the nation. But he has a different conclusion.

“The reason the numbers are so dismal is businesses lack confidence. They’re
scared, they’re afraid of hiring workers because they don’t know what the future
would be because of federal policies and until fairly recently I think state policies.”
As she looks over the numbers, Hanauer says she’s most worried about the long
term unemployed and the impact of that over time.

“We’re finding that certain workers have lost their jobs and just cannot get back
into the labor market – for six months, for a year, a year and a half. And that is
really going to lead to communities and families falling apart.

 

But Vedder says time is the problem – he blames the extension of unemployment
benefits to 99 weeks, and suggests it should go back to 26 weeks. 

“When you pay people to be unemployed, more people will be unemployed. This has
raised the unemployment rate by 2-3 percentage points over what it otherwise would
be. In other words, a little ‘tough love’, if you want to call it that, toward the unemployed
would have probably stimulated an increase in employment.”

But Hanauer says the unemployed – especially those caught in long-term joblessness –
often find they have nowhere to go to find work. She says the tax cutting approach that
been put into place nationally and in Ohio hasn’t been working. Hanauer says the federal
government needs to step in, as it did with the auto industry bailout. She suggests a jobs
program, as has been done in the past during periods of high unemployment, but this
time with a green tint.

“If the whole nation were putting in place renewable energy standards, putting in place insulation,
insulating buildings, buying greener cars, Ohio would really benefit from that because we are the
ones that are best at making some of the components that go into those products.”

But Vedder says he wants the government to stay out of the job situation, which he agrees
is challenging.

“No amount of government bureaucratic programs will get us out of that. The stimulus package
was a total failure at the federal level, the Third Frontier project and other Ohio projects have
largely been, in my judgment, boondoggles. And so I would say let markets work, get out of the
way of business, and provide a better regulatory environment.”

Ohio’s jobless rate for July was 9 percent, up by 0.2 percent for the second month in a row.
While Vedder notes that’s lower than the national unemployment rate and suggests Ohio’s
economic recovery is coming along, albeit slowly, Hanauer says anything over 9 percent is
unacceptable.

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