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Ellen Belcher is the Dayton Daily News opinion pages editor. She writes about state government, education, the environment, higher education and all things Dayton.
Martin Gottlieb is an editorial writer and columnist for the Dayton Daily News opinion pages. He focuses on the political process itself and does such national issues as war, the economy, taxes and Social Security, as well as a hodge-podge of local and state issues.Home > Blogs > A Matter of Opinion > Archives > 2009 > June > 24 > Entry
Martin Gottlieb: (Relatively) good news: Ohio jobs stat stagnates
You might have heard that Ohio’s unemployment rate increased from 10.2 to 10.6 percent from April to May. You might not have heard, however, that the total number of jobs in the state didn’t really drop.
That’s a pretty important fact, given that the total number of jobs in the country is still shrinking, and given that Ohio has become used to seeing jobs shrink in number in this decade.
Richard Stock, economist at the University of Dayton, thinks the long-term decline in Ohio jobs may be the reason the short-term numbers aren’t so bad. Maybe Ohio got its worst news out of the way earlier.
OK. But why did the unemployment rate go up, if the number of jobs did not go down?
The answer is that the unemployment rate is not a measure of the number of people without jobs. It’s a measure of the people without jobs who say — in a survey — that they are looking for jobs.
So the rise in the unemployment rate was not a rise in the number of people losing jobs, but in the number entering the job market.
Why did that happen? Economists are not claiming to know for sure. Things just came together in a certain way.
A lot of people might have received bad news lately about a family member’s job being threatened, or about somebody’s hours being cut back, and might have decided it was time to look around.
Wright State University economist Robert Premus points out that retirees might be thinking about re-entering the job market as they see hear news about pensions. (Also, more graduates enter the job market in late spring, of course. Government stats are actually “seasonally adjusted” to account for that, but perhaps not perfectly.)
Anyway, what was happening in the Ohio job market was that, as the manufacturing sector continued to wane, the services sector added jobs, especially the medical and education fields.
Does the flat total indicate that a general turnaround is pending? Some think so, but it might not show up for a long time in unemployment rates. WSU’s Premus says that when business picks up, employers typically have plenty of workers to handle it for a while, because they’ve been conservative in cutting back.
Gov. Ted Strickland’s budget director, Pari Sabety, talks about a worst-case scenario unemployment rate of 15.4 in 2010 or 2011. That seems like an awfully high figure to some people. But Ohio’s unemployment rate did hit 13.8 percent in January, 1983. And this recession certainly seems worse than that one.
One thing that’s clear is that the generally bad economic news of the past few months is starting to figure into Ohio politics. Strickland’s popularity is looking less formidable.
One poll, by Public Policy Polling, shows roughly equal numbers of people approving as disapproving of his performance (with 15 percent being in neither category). A match-up between him and Republican contender John Kasich comes out basically as a draw, which is new.
Republicans certainly have their line of attack: Says party Chairman Kevin DeWine, of Fairborn, “Ohio has lost nearly 300,000 jobs on Ted Strickland’s watch. He promised to turn around Ohio’s economy … and he failed.”
It’s a strange thing. The politicians of both parties know that governors have limited impact on the economy. But they campaign on what they’ll do for the economy. Certainly Strickland did.
He didn’t propose anything dramatic; indeed, he proposed to let the big Republican initiative on that score — the tax-overhaul/tax cut plan of 2005 — remain in place.
He proposed nuts and bolts things, like nurturing his predecessor’s Third Frontier program, while reshaping the higher education system. He enacted a five-year “stimulus” that was designed to funnel money to new economy type projects; “green” stuff and all that.
These efforts — generally focused on the long term — were destined not to be a match for a dramatic, sudden national downturn, complete with a special collapse in the auto industry. No governor’s plans could be.
Still, the campaign for governor is likely to be about these issues (with the national scene playing a big role).
What the most recent economic stats suggest is that Strickland might actually have some good news to point to — if you call stagnant-job-numbers-while-other-states-are-losing-jobs good news.
Permalink | Comments (2) | Post your comment | Categories: Columns, Economy, Martin Gottlieb, Ohio politics
Comments
By Stephen Lahanas
June 24, 2009 12:17 PM | Link to this
It’s not as good as it sounds, because they haven’t taken into account all of the people who have dropped off of the rolls after their unemployment ran out - the situation isn’t improving at all…By Brian
June 24, 2009 1:41 PM | Link to this
Also, remember that there isn’t an immediate connection between “the economy” and jobs. Jobs are a 6-month trailing indicator - the current unemployment rate indicates the state of the economy in Dec/Jan. Though it sounds counter-intuitive, never go by the unemployment rate when deciding the current health of the economy. (I know, that’s easy to say if you’re employed…)