Group's Annual Report On Working Ohio Shows Low Worker Participation, High Income Inequality

Sep 6, 2016

Though Ohio’s jobless rate is below the national average and the state is on a job-gaining trend, a new economic report says there are still some numbers that show workers are still suffering in Ohio.

At 4.8% for July, the state’s unemployment rate is firmly in pre-2008 recession territory. But that doesn’t give the full picture of how things are for working Ohioans, says the state’s leading labor policy issues think tank. “It’s hard to describe the economy with just one number," said Amy Hanauer with Policy Matters Ohio, a left-leaning research group. Her annual report on working Ohio shows some other numbers she says are disturbing – the number of Ohioans actually in the labor force is at a 36 year low, with just under 82 percent for working age men, a stat Policy Matters says is "alarming". Wages climbed last year for the median Ohio worker but are still far behind what they were in 1970, and Ohio’s fastest growing sectors and most common jobs are low wage.

Policy Matters Ohio and the state’s leading conservative think tank, the Buckeye Institute, don’t agree on much. But on some numbers in this report, "there’s no question the unemployment rate used to be the thing that everybody looked to, but it’s not telling the whole story anymore,” said Greg Lawson is with the Buckeye Institute.  And while the two groups agree that the stats are worrying, they disagree strongly on how to address them.  Policy Matters Ohio advocates several ideas, such as encouraging labor unions, improving state and federal earned income tax credits, providing childcare and investing in infrastructure, transit and education. Lawson balks at most of this – for instance, he said he wants to see more reforms before putting extra money into education. “We continue to spend more on education, but we really are stagnant when you do these national tests that look at how students are performing,” Lawson said.

Hanauer said advocating for education reform is just another way of suggesting privatization of public schools, which she says hasn’t worked. “Instead of doing unproven things that really enrich some political donors like enabling private charter schools that have terrible performance, we should instead be investing in early education which has just shown to work.”

State lawmakers and Gov. John Kasich have said they still like the idea of tax cuts – and that’s an issue where these two groups differ greatly. Policy Matters Ohio notes in its report that the top 1% earn more than $752,000, while the rest of Ohio earns an average of around $43,000. The group suggests paying for all its suggestions by taxing those at the very top of the income scale. Hanauer said since the tax cuts of 2005, Ohio has had lower rates of job creation as a whole – so it’s time to ignore those who push for more tax cuts. “It’s crazy. Cutting taxes does not create jobs, and it does not improve our economy," Hanauer said.  "What it does do is force us to lay off people that are doing important work in our communities.”

Lawson said the Buckeye Institute doesn’t believe in just doing more income tax cuts – he says tax reform is what’s needed. And he added that the idea that tax cuts create income inequality is a false narrative. “We have a problem with not having enough jobs. You have real inequality when people don’t get jobs at all," Lawson said. "If we want to close these things that my good friends at Policy Matters are concerned with, we gotta be able to create more jobs faster so that people can start moving up quicker the ladder of success and making more money.”

Lawson has also been pushing for regulatory changes such as loosening the rules on certification and licenses for certain occupations, which block some lower-income people from entering certain industries. Hanauer agreed tax cuts don’t create income inequality, but she said they don’t help. And she’s very concerned about ongoing racial and gender disparities. Black workers earn 76 cents for every dollar white Ohio workers earn, and women make 81 cents for each dollar their male counterparts do – which translates to a potential $7,000 difference over a year.