Same Old Problems But Ohio Has Solutions

Cleveland Plain Dealer - September 17, 2004

by Amy Hanauer, in The Cleveland Plain Dealer 

Jobs have deserted the Mid west. Ohio’s manufacturing sector is being battered.

Cleveland’s poverty rate is officially the nation’s worst. In a region called the rust belt, in a state with a shrinking job base, in a city whose poet laureate is Harvey Pekar, none of this seems like news.

So writing an annual report called “The State of Working Ohio” can feel like singing the blues. Again.

But there is news, both good and bad, to be found in this year’s report from Policy Matters Ohio (available at Bad news first: Ohio lost more than 229,000 jobs between March 2001 and July 2004. The percentage of jobs lost is much worse than after previous recessions.

Ohio’s real median hourly wage ($13.14) fell slightly in each of the last three years and has been below the national median since 2001, down from more than $1 above the national median in 1979.

Disparities between black and white workers have grown. The median black worker earned $11.18 an hour in 2003, 82 percent as much as the median white worker ($13.58). Annual rates of African-American unemployment jumped a startling 63 percent in two years, to 12 percent by 2003, twice the level facing white workers.

Unionization rates are falling, and Ohio is not keeping pace with national college attainment.

Household and family income have declined, while income inequality has swelled.

Rates of health insurance coverage and employer-provided retirement benefits have dropped, and poverty remains high.

However, there is good news.

Those with more education earn substantially more.

Workers in unions have higher wages with fewer gender and race disparities.

The manufacturing sector still employs nearly one in six Ohio workers, more than in other states.

Ohio still has more workers who are members of unions, and they tend to earn higher wages.

Over the long term, women’s wages have grown as a percentage of men’s wages.

True, the second list is shorter than the first. But here’s the best news. We know how to turn things around:

Provide public goods: A March 2004 study showed that plentiful, high-quality public services generate economic growth, even if higher taxes are needed to provide them. Read the study, “Rethinking Growth Strategies.”

Excel in education: Education from preschool to college and beyond increases productivity and wages. Currently, Ohio under-invests, relegating some K-12 students to inferior schools, and making college unaffordable for some moderate income families.

Raise the floor: One way to boost all wages is to increase the state minimum wage, as more than 13 other states have, from the inadequate $5.15 federal level.

Target development: Reserve limited economic development dollars for companies that pay higher wages and benefits; have unions or vow not to fight them; maintain strong environmental standards; and train, retain and promote employees.

Maintain manufacturing: Encourage collaboration between firms, unions and trainers to promote the innovative production that is most likely to stay in Ohio. Create jobs that tap into the growing demand for clean energy.

Trade fairly: Some trade policies encourage job flight by relegating environmental, labor, human rights and safety standards to poorly enforced side agreements. Standards should be enforced and strengthened now, and put at the forefront of new agreements.

Reform health care: Private health insurance impedes hiring, excludes some people from care and costs more than systems that guarantee coverage. The system, bad for our health and our economy, should be reformed.

Tax fairly: Lower-income households pay a larger share of income to state and local taxes and pay a larger federal share than they used to due to policy shifts. Implement a state Earned Income Tax Credit to compensate and ensure that eligible Ohio families claim the federal credit.

Stop sprawl: Suburban sprawl depletes resources from the city; diverts funds to build infrastructure in new places; reduces natural areas essential to a healthy ecosystem; and wastes land and energy. Policy sometimes promotes sprawl by allowing and subsidizing greenfield construction and road building, failing to remediate brownfields and urban infrastructure, and funding schools locally. Fix these flawed incentives.

Ohioans can take advantage of a changing economy, or let that economy take advantage of us. We may be singing the blues now, but a more upbeat score is waiting to be played.

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