Study: Wages, jobs suffering in Ohio

Lancaster Eagle Gazette - September 4, 2012
Russ Zimmer

Paychecks aren’t buying as much as they used to

A new study on labor in Ohio suggests that although conditions are better for workers in the third year of the recovery, they’re still awful by historical standards.

The “State of Working Ohio 2012,” a report by left-leaning economic think tank Policy Matters Ohio, argues the financial collapse and poor shepherding of the state’s economy by government and business leaders has left the buying power of the typical employee lower than what it was more than 30 years ago.

The median wage — half above, half below — in 2011 was $15.20, compared to an inflation-adjusted $16.01 before the recession started and $16.54 in 1979, which also was on the eve of a recession, according to the report.

“Ohio workers have little to celebrate this Labor Day, and some indicators are the worst they’ve been in decades or ever,” the report’s introduction states.

Middle-income earnings were higher in Ohio than the national average at the turn of the century. Now the state is ranked 30th with annualized typical wages at least $1,000 per year lower than the other Great Lakes states, except Indiana.

The study does note some bellwethers are pointing toward better days, including the unemployment rate, which for better or worse, helps out-of-work people gauge their job-hunting prospects.

Labor force participation — the percentage of working-age people who have jobs or are seeking work — is at a 25-year low, according to the study. As jobs slowly return, the job seeker’s confidence grows.

“The unemployment rate is far lower than it used (to be), and that’s going to lure people back into the labor force,” Policy Matters Ohio Executive Director Amy Hanauer said.

During the past 12 months, Ohio has added more than 100,000 jobs and durable goods manufacturing has been a significant contributor. The subsector of durable goods, defined as products with an average expected life of three years like cars or car parts, added 47,600 jobs since bottoming out in November 2009.

Production jobs beget transportation and retail, meaning the more people employed in making things in Ohio will have a positive effect on overall job growth, Hanauer said.

“If we continue to see a strong recovery in manufacturing, if we continue to see durable goods growing at three times as fast as other jobs, then we’ll start to see growth in other industries because those manufacturing jobs have a multiplier,” she said.

Other findings:

» An all-time high of 44.2 percent of the unemployed in Ohio have been out of work for six months or longer. That’s up from 42.4 percent in 2010. The study notes the longer people do not have a job, the more difficult it is for them to get hired because of skill degradation and employer discrimination.

» Workers with at least a four-year college degree are the only segment to see wage growth in the last 32 years. People who didn’t graduate high school in 1979 earned an hourly wage of nearly $15 (in 2011 dollars). Last year, that group made 39 percent less, or an average of $9.10 per hour.

» The percentage of the black working age population with jobs reached its apex in 2001 at 62.4 percent, just a tick below the ratio of their white counterparts. A recession began that year and wiped out decades of inroads the black community had made into Ohio’s economy. That accelerated with the more recent contraction and, as of 2011, less than one in two (48.6 percent) black people, age 16 or older, in the state have jobs, compared 59.7 percent of white people.

“This is deeply troubling and a sign that Ohio has a long way to go before the labor market facing the black community can be considered healthy,” the report states.

Study: Wages, jobs suffering in Ohio

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