Study: Ohioans Miss Benefits of Work

Dayton Business Journal - September 6, 2005

Dayton Business Journal

Ohioans are working harder for less financial gain, says a study by Policy Matters Ohio, a liberal think tank based in Cleveland.

Ohio’s median household income sank to $42,955 in 2004, from a peak of nearly $46,000 in 2000, according to Policy Matters.

Ohio’s median income measured $40,007 in 1984. Policy Matters adjusted all numbers for inflation.

At the same time, Ohio’s median wage had fallen to $13.37 an hour in 2004, down from nearly $14 in 2000, indicating Ohioans are keeping their income up by working longer hours, Policy Matters concluded in its report.

To bolster its claim, Policy Matters cited a recent survey by the Federal Reserve’s Cleveland branch that estimated Ohio’s worker productivity rose 3.7 percent between 2000 and 2004. The average state saw productivity rise 2.3 percent during the period, the Cleveland Fed reported.

“Productivity gains are being absorbed in profit increases, with working people seeing fewer of the benefits,” Policy Matters
said in its study.

Ohio’s job base is still 2.9 percent below its level at the start of the 2001 recession, according to Policy Matters. Only Michigan, Massachusetts and Illinois have suffered deeper job losses.

Although Ohio lost 19.2 percent of its manufacturing jobs between 2000 and 2004, manufacturing wasn’t the only industry that took a hit. Ohio’s professional services, construction, transportation and information services industries are also smaller than they were before the 2001 recession.

The economic pain doesn’t stop there, according to the report. Some 11.4 percent of Ohio residents are without health insurance, and around 48.6 percent of the state’s residents don’t have access to employer-sponsored retirement plans. The median white worker earns 19 percent more than the median African-American worker in Ohio; the gap was 10 percent in 1979.

To remedy these issues, Policy Matters said Ohio should spend more on education, improve its infrastructure and shift tax burdens toward wealthier taxpayers. It accused the state of cutting taxes for the wealthy, skimping on education spending.

The state also throws tax breaks at businesses without ensuring the incentives result in new jobs, according to Policy Matters.

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