Ohioans face hard facts

Akron Beacon Journal - October 13, 2002

The Akron Beacon Journal

Many angry state hasn’t done more for economy
By Doug Oplinger Stephen Dyer and Dennis J. Willard

Ohio overtaken by other states
Earl and Thelma McKinney came from Kentucky after World War II as part of the exodus from mining towns to Ohio’s New Frontier.

Earl, now 70, is retired from the Ford plant in Lorain. Thelma, 65, stayed home with their four children.

Their house — a few miles from a Sandusky exit on the Ohio Turnpike — is small and neatly kept. A decorative windmill stands in the back yard.
They look like picture-perfect Ohioans, but that appearance masks anger: Anger at Ohio government and business.

On Nov. 5, they plan to do something they think can still make a difference: Vote.
They want politicians to know about the clouds of dust that rise above a nearby limestone quarry.

Or about friends who take bus trips to Canada to buy prescription drugs at a lower cost.
At the kitchen table, Thelma McKinney wonders if their lives would be better in Kentucky.

Earl McKinney worries about his ever-increasing property taxes and how his wife will pay them when he’s gone.

Meanwhile, businesses down the road receive tax abatements and emit strong, nauseating fumes that prevent them from sitting on their porch.

Earl McKinney, who volunteered to go onto the battlefield as a medic in the Korean War, pores over tax-abatement, environmental and workplace-health documents looking for a fight. He believes that with businesses in Ohio, anything goes.

He raises heck at local government meetings. Tears come when he talks about the challenges facing poor children.

One of the things Earl and Thelma McKinney cherish most — family — has been split apart. Declining job opportunities in Ohio led two of their four children to move across the country to find a better life.

Family separation is commonplace in Ohio — a state where family values are considered an asset.

In a statewide poll conducted by Zogby International for the Akron Beacon Journal, half of the respondents said they have an immediate family member who left Ohio for a job or an education.

Two out of three know that Ohio’s national ranking for personal income has declined since its peak around 1960, but in interviews they are surprised how far the state has fallen in comparison with the rest of the country.

The decline has happened in spite of Ohioans’ belief that they are “hard workers.” That’s what they said in the poll, and what the statistics show.

In 1999, 6.3 percent of Ohioans worked two jobs, compared with 5.6 percent nationally.

Married couples with children are working 11 more hours a week than 20 years ago, according to Policy Matters Ohio, a Cleveland research organization.

“It makes me want to move to Wyoming,” Jim Koppes said after listening to a list of statistics about Ohio, including those detailing the state’s poor health.

Koppes is a Medina businessman who operates a hay farm. Ohio’s development policies, which encourage businesses to move out of cities into rural and suburban areas, are eating up the land he uses for farming.

Divided we fall

Seeds of the economic decline were planted 30 or 40 years ago.

State government, business and educational leaders often point to one reason: Ohio is diverse, if not divisive. Special interests are either unwilling or unable to come together on a plan for the future.

The most glaring example was five years ago when a coalition of business leaders, educators and government officials put together the ingredients of a good public education.

When it was time to make difficult decisions about costs, the coalition disappeared.

Divisiveness is a problem recognized beyond Ohio’s borders.

A recent University of Toronto study of manufacturing states and provinces used Ohio as an example of a state lacking an economic identity or a plan.

Gov. Bob Taft says his Third Frontier plan helps Ohio business with money for research and development. However, the 9-month-old plan needs funding by the legislature and voter approval of a bond issue, which won’t happen until mid-2003 at the earliest.

At a recent National Governor’s Association meeting, a Harvard Business School researcher who was telling governors how to build on their strengths, showed a U.S. map identifying 12 major specialized regional economies. Not one was in Ohio.

William “Brit” Kirwan, who came from Maryland to become president of Ohio State University, left less than four years later with an observation: The Ohio business community and state leaders view higher education as a special interest group with its hand out for money.

Kirwan and other state university presidents argue that universities, businesses and government have been successful in other states — particularly Georgia — in creating attractive, growing economies whose strengths are research, development and a highly educated work force.

University presidents in Georgia, Maryland and Texas go to the governor arm in arm with business representatives, Kirwan said. Not in Ohio.

Kirwan returned to Maryland after Ohio’s leaders slashed the budget for higher education and the governor introduced a program to direct state dollars directly to helping businesses with research and development — with or without the help of universities.

“If I were giving advice, I would urge the governor to bring together the business leadership with the university leadership to develop this grand design, this vision. That is in my opinion,” Kirwan said. “Until they connect, I don’t think things are really going to happen.”

Kirwan said that the Ohio Business Roundtable — an organization of top corporate leaders — excludes higher education.

Richard Stoff, executive director of the round table, said the business group wants to speak as one business voice, which is no different from the national Business Roundtable. Educators and nonprofit groups can’t be members, but the round table works with them in many ways, he said.

“When we’re dealing with issues of economic growth, our members are very sensitive to the role played = [100.0]by universities,” Stoff said.

He said at least half of the round table members serve on university boards of trustees.
The same separation exists with public school districts.

Business organizations say a priority in the state should be to assure that schools are producing workers with basic and technological skills.

Yet, Donn Force, a retired community leader and former superintendent of Green Local Schools in Summit County, said he sat dumbfounded as he listened to an organizing representative of the Ohio Chamber of Commerce explain how to establish a local chamber.

The organizer advised business people not to allow schools — or any other governmental unit– to become voting members of the local chamber.

Educational and other governmental issues can conflict with the best interests of businesses, the organizer said.

“I’m sitting in the room and not saying anything,” Force said. He wondered: How can business and education ever have conflicts of interest?
Andy Doehrel, executive director of the Ohio Chamber, said that new groups are told: “The Chamber of Commerce is the business spokesperson.”

He said that’s no different from a labor union with a distinct point of view.

Ohio Department of Development Director Bruce Johnson acknowledges that there are divisions that make it politically difficult to create a plan.

The problem, as he sees it, is that there are at least eight major interests — one for each large city — competing for state dollars.

Other states make gains

Lack of a plan has taken a toll.

According to national statistics of economic output, Ohio has been stagnant for 20 years.

Florida passed Ohio in the 1980s to become the sixth-largest state economy.

Georgia and North Carolina rapidly are approaching Ohio from far behind, and if growth trends don’t change, they will overtake the Buckeye State in little more than 10 years.

Many of Ohio’s economic leaders have disappeared. Gone are the strong corporations and unions that established high pay and good benefits that treated genders and races equally.

The number of Fortune 500 companies headquartered in the state fell by a third from a peak in the 1960s. Gone are such companies as Firestone and General Tire, which employed highly paid manufacturing workers and highly paid, well-educated corporate staffs that generate more jobs.

Union membership as a percentage of the work force has fallen from 38 percent to 18 percent since 1964. Ohio fell from eighth most unionized state in 1960 to 17th today.

Since at least 1960, Ohio has been below the national average for percentage of managerial, administrative, research and technical workers — highly paid workers whose work and lifestyles tend to create additional jobs — according to census data.

It’s those workers who were most likely to escape the downward spiral of income in Ohio.
The gap between low- and high-income families grew faster here than in any other state from 1970 to 1990, according to a study done for the Federal Reserve Bank of Chicago.

The implications for Ohio’s African-Americans and lower-income workers have been profound, according to Amy Hanauer, executive director and researcher for Policy Matters Ohio, a Cleveland research group funded primarily by the George Gund Foundation.

“The late ’90s were a good period for Ohio wages,” she said, but the long-term trend is a deterioration of income for about 80 percent of Ohio’s workers.

The declining role of union wage scales significantly widened the hourly wage gap between black and white men, she found. The gap was about $1.40 in 1979 but doubled to $3 in 2001 after adjusting for inflation. At the same time, black men saw their hourly rate plunge
from $15.32 an hour to $12, she said.

Hanauer echoed the same concern as the university presidents: Education is an issue for Ohio’s work force — 11th least educated in the nation.

“Bachelor’s degrees are becoming ever more important” to economic gains, she said.
Zach Schiller, lead researcher at Policy Matters, said Ohioans need to realize that what we have done in the past isn’t working.

“The idea that we should give business everything it wants, and lower taxes, that we’ll be halfway to the promised land — this has been the de facto policy for decades — and it hasn’t worked,” Schiller said.

“We have to plan and we have to figure out what’s best for the state and act on it,” he said. “We can’t expect that private business, left unfettered, will bring about the kinds of gains we expect to see in every aspect of our life.”

Not so bad?

Meanwhile, some continue to paint a cheery picture for Ohio.

Recently, the governor’s office said Target Corp.’s decision to build a distribution center near Columbus is “another economic victory for the state of Ohio.”

The warehouse will employ about 900 and pay annual wages of about $28,000, according to a news release. Ten years ago, that was Ohio’s median income.

Ohioans have become discontented as the state’s job growth has been in lower-wage jobs.

Basil Slimack, a retired Orthodox priest in suburban Canton, has two daughters in Florida, where they have jobs. His mother, who lives in Michigan, has far better state-supportedhealth care than if she lived in Ohio.

He said that Ohio is among the most aggressive in taxing retirement income, and when he dies, he would be better off dying in another state so his heirs can get more of his estate.

“For a retiree, you’d be better off leaving Ohio,” Slimack said.
Earl McKinney, the retired autoworker from near Sandusky, said Ohio leaders frittered away opportunities to capitalize on the state’s massive wealth.

“This state is stagnant. It’s making no progress,” he said.

Andrea Moehle of Medina sat at a soccer game and thought about why she likes Ohio.
“Ohio is a safe place to live. I’m into family. I’m not interested in warmer weather,” she said.

But as she thought about the state’s job opportunities for educated people and looked at her son on the soccer field, she added: “I (could) understand him wanting to leave. It would be nice if we could catch up to other states so he could stay.”

Dennis J. Willard can be reached at 614-224-1613 or dwillard@qn.net

Doug Oplinger can be reached at 330-996-3750 or doplinger@thebeaconjournal.com

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