Think Tanks See Different Pictures Of Ohio's Economy In Labor Report

Sep 4, 2018

Ohio has been gaining jobs over the last few years, and its unemployment rate hit its lowest level in 17 years a few months ago. But there are other numbers in the state’s economic overview that raise concerns for a progressive group that reviews the economy each year on Labor Day.

For Amy Hanauer with the progressive think tank Policy Matters Ohio, the one-word takeaway from this year’s State of Working Ohio report is “inequality.”

“We still see just tremendous inequality and inability to see our wages inching up at all," Hanauer said. "And it makes me realize that if we can’t get wage growth when unemployment is this low, workers in Ohio are really in trouble."

Hanauer said the report shows Ohio workers are more productive and more educated than in the past. The gender gap in pay decreased slightly over the last year, but wages for African-American workers are still far behind white workers.

But unionized workers make more money than non-union workers. And the most common jobs, including food service, retail, registered nurses and cashiers, don’t offer enough money to sustain a family.

Rea Hederman at the conservative Buckeye Institute has seen the report. But when he looks back at the economy over the last year, “opportunity” is the watchword for him.

“Opportunity has clearly increased. We have more of our fellow Ohioans finding work, being able to find work with good benefits, and so we’ve seen strong wage growth over the last year,” Hederman said.

Hanauer agreed with Hederman that the state’s 4.6 percent unemployment rate, which is a half a point lower than at this time last year, is a good thing, and she noted Ohio has recovered the jobs it lost in the recession.

However, Hanauer said wage growth in Ohio last year was less than a quarter of one percent.

“The fact that workers last year got a four cent wage increase, when adjusted for inflation, tells me that what the elite, what President Trump, what others consider to be a good economy isn’t always a good economy for the average person in Ohio.”

Both Hanuaer and Hederman are using national data, but from different sources. And Hederman said the data he uses shows businesses reported wage growth more than 10 times the Policy Matters number.

“If we’re adding more benefits – like, one of the things that Affordable Care Act did was to drive up the price of insurance and say qualified insurance has to offer these things," Hederman said. "Well, if you’re forcing people to pay more in benefits, that’s going to hold down wages and salaries.”

And another thing the two disagree on is the effect that tax cuts have had on the economy. Hanauer said many of the state’s economic problems could be solved by pulling back $3 billion in tax cuts that she says benefit the wealthiest Ohioans.

“In return, we see that it is harder for kids to go to college – tuition is higher, financial aid is lower – it is harder for a family to afford child care. It is harder for us to be getting the pre-k that our kids need to be entering their schools ready to learn,” Hanauer said.

But Hederman said those tax cuts have brought what he sees as the good things in the economy.

“The tax cuts, basically, have helped people who pay taxes. People pay taxes from all different levels of income. And the question is, what are you getting from your tax cuts? And it looks like in this case, what we’re getting is more jobs and higher wages,” Hederman said.

Policy Matters and the Buckeye Institute do agree on some things they see as solutions – for instance, they support closing loopholes in the tax code that they say have more of a payoff to special interests than to the state. And they also would like to see reforms in the criminal justice system to reduce overcrowding and improve offenders’ chances of not coming back to prison.