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Manufacturing a high wage Ohio: Deindustrialization and recovery

March 12, 2018

Manufacturing a high wage Ohio: Deindustrialization and recovery

March 12, 2018

The manufacturing sector built this state. But decades of deindustrialization have left once-prosperous communities across Ohio poorer, weaker, and in some cases smaller. By 2016, Ohio had lost half of its peak manufacturing jobs, and median household income trailed the nation’s by $5,300.

Fortunately, there are bright spots in Ohio’s manufacturing landscape. Manufacturing still employs 12.9 percent of Ohio workers: twice the national average. Average wages of nearly $59,000 per year in the sector exceeded the average for other sectors by $11,000 in 2016. Ohio manufacturers contributed $106 billion to the economy that year, 16.2 percent of the state’s economic output And Ohio manufacturing jobs have made some recovery since their low point in the Recession.

We must build on this manufacturing recovery through intentional policy making that recognizes the sector as a vital component of a robust, equitable twenty-first century Ohio economy. Slash and hope corporate income tax policies won’t make the grade. Instead Ohio must make critical investments, implement policies that strengthen the sector and restore manufacturing as a vehicle for shared prosperity. These include:

Making manufacturing more viable by:

  • Creating an industrial commons of resources that manufacturers and workers can draw on to enhance capabilities
  • Establishing an Ohio manufacturing task force to identify cost advantages of establishing or continuing operations locally; retaining or returning jobs
  • Investing in manufacturing by supporting Manufacturing Extension Partnerships, America Makes and other public-private partnerships
  • Increasing demand through procurement and policy
  • Investing in high-road manufacturing by directing state pension investments to good jobs and viable communities

Supporting a strong workforce by:

  • Building out industrial apprenticeships through public universities, community colleges, labor unions and manufacturing partnerships
  • Averting layoffs using Workforce Investment and Opportunity Act funding and the state’s proven but inactive model with the United Labor Agency
  • Providing ample unemployment compensation and restoring viability to the unemployment trust fund

Partnering with workers by:

  • Bolstering union organizing by rejecting so-called right-to-work bills in the legislature and by promoting organizing through procurement policy
  • Improving wages; a living minimum wage of $15 per hour by 2025 would boost pay for about a quarter of the state’s manufacturing workers
  • Supporting efforts that extend opportunities to left-behind communities including people of color and young people

A Statewide Overview?of Ohio Manufacturing

Over decades of deindustrialization, Ohio has lost more than half its peak manufacturing jobs. Yet 685,000 Ohioans work in the sector, more than in all states but California and Texas. Because other states have deindustrialized more rapidly and added other jobs faster, manufacturing is increasingly concentrated in Ohio. Our manufacturing jobs also pay relatively well: they tend to be concentrated in advanced, capital-intensive industries, and are frequently unionized.

Deindustrialization has been largely place-based, changing the geography of the manufacturing landscape, and disproportionately harming specific communities and people. Since 1990, Cuyahoga County has lost nearly 90,000 manufacturing jobs (57 percent), Hamilton County lost 66,000 (57 percent), and rural Muskingum County lost two-thirds (5,900). With the exception of Columbus, every major Ohio city has lost population since 1990. The sector and the state have become more suburban.

People of color have been hit hardest: Manufacturing employment among white workers fell by 29 percent, but for black workers that loss was 46 percent. Young people entering the workforce face fewer opportunities to get a family-supporting job in manufacturing than their parents did a generation ago.

Despite challenges, there are positive signs, especially since the Recession. Sector-wide corporate revenues of $106 billion in 2016 were 16.2 percent below the sector’s peak of $131 billion in 1998. That still represents a substantial 24.5 percent comeback since 2009, when the sector earned $85 billion.

Manufacturing has added about 65,000 jobs since the recession, too. Today, we must build on this progress through intentional policy-making to return vibrancy to Ohio’s manufacturing sector and restore it as a vehicle to broad prosperity across the state.

Read the full report here.

Tags

2018Michael ShieldsSustainable ManufacturingWork & Wages

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