The strong job market is benefitting workers in Ohio with higher wages and more employment choices as the number of jobs in Ohio hits a new record, according to the annual State of Working Ohio report released by Policy Matters Ohio in conjunction with Labor Day.
“My topline is we’ve got a tight labor market right now that is highly favorable to workers overall and that’s the labor market that we need right now,” said Michael Shields, lead author of the report and an economist at the liberal-leaning Cleveland-based think tank.
“The way that we want the labor market to work is that it matches working people to the jobs where they can most utilize the skill set that they have and they can be the most productive. Obviously that’s the way to be able to earn the most for their employers and for the state,” he said. “And if we have a market that’s working well it also helps people to secure higher wages.”
The overall job market in the Dayton region is strong, said Anthony Mathews, market manager for the staffing firm Manpower-Dayton.
At the end of 2022, fearing a possible recession, local companies were slowing their hiring efforts, but Mathews said optimism has been growing since the first quarter of this year.
“The job market has tightened up a bit. However, there are still plenty of jobs available, generally speaking. Starting wages have increased,” Mathews said. “During the pandemic, when companies were trying to get people to come back to work, they had to increase their wages.”
When wages are up workers are more likely to stay in the job and companies are placing more emphasis on finding workers with a strong job history, Mathews said.
He said local manufacturing companies tend to hire more quickly than other sectors, but companies in that sector are increasingly inclined to ask for resumes and want to interview job candidates.
“They are definitely being more selective. The biggest request that I get from my clients is that they don’t want ‘job hoppers,’” Mathews said. “One of my clients told me that it cost them $10,000 for two weeks of training for a new person.”
More Ohio jobs than ever
There are now 5,639,200 jobs in Ohio, slightly higher than the previous peak employment dating to May 2000 and far higher than the trough of 4.7 million jobs during the COVID-19 shutdown of April 2020, according to the Policy Matters report.
The unemployment rate in the state was 3.3% in July and Shields said there are two job openings for every unemployed worker.
“Today Ohio’s strong labor market is more favorable to working people than at any time since the Great Recession and by some measures much longer,” the report said.
U.S. non-farm payroll employment grew by 187,000 in August and the unemployment rate rose to 3.8%, the U.S. Bureau of Labor Statistics reported on Friday.
“Job growth has slowed substantially in 2023 to a more sustainable pace, the labor force increased, and wage growth slowed somewhat,” said PNC Chief Economist Gus Faucher. “Even the increase in the unemployment rate is good news, as it came from a larger labor force and not a drop in employment.”
While jobs in Ohio have recovered to their pre-COVID level, the recovery has been uneven across the state, with seven of Ohio’s 11 metropolitan statistical areas still below pre-COVID employment. But the Dayton and Springfield metro regions, along with Columbus and Cincinnati, now have more jobs than before the pandemic.
Springfield had the highest percentage of job growth of the four, with a 3.9% increase in jobs since Feb. 2020. Dayton ranked fourth with 0.4% growth, according to state and federal data cited in the report. The Cincinnati metro area, which includes Butler County, had the second most growth, at 3.5%, followed by the Columbus metro area’s 2.7%.
Trade, transportation and utilities remained the top employer in Ohio in 2022, with 19% of the state’s jobs in that sector, according to U.S. Bureau of Labor Statistics data. Education and health services ranked second, and government had the third most employees.
Since 2000 the biggest gain in jobs was in education and health services, which rose by 216,300, the report said.
But the state bled manufacturing jobs, felt acutely in the Dayton-Springfield region, as 339,600 manufacturing jobs disappeared statewide since 2000, according to BLS data cited in the report.
Wages are up statewide
The median hourly wage in Ohio was $21.51 in 2022, the highest since 2000 except for the pandemic-related anomaly in April 2020 when the median rose to $22.65 because a disproportionate number of lower-paid workers lost their jobs in the recession. The median U.S. wage was $22.88 in 2022, the report said.
The quick recovery from the COVID-19 recession contrasts with slow and incomplete recoveries from recessions over the past two decades in Ohio, the report said.
“The rapid recovery from the COVID recession reflects the fact that federal policymakers met the crisis head-on with a response scaled to the need,” Shields said. “The recovery has now led to a growth economy that is creating long overdue opportunities for workers to secure wage gains, and new work opportunities for those most likely to face joblessness. Policymakers should support working people’s efforts to reclaim their share of the growth they have been building all along.”
With the year-over-year inflation rate at 3.2% in July, Shields argues that the Federal Reserve should cease raising interest rates to reduce inflation because of the negative impact that can have on economic growth.
Faucher said the Fed may indeed ease up on rate increases.
“The August jobs report means the Federal Open Market Committee is likely to keep the federal funds rate in its current range of 5.25% to 5.50% when it meets on September 20,” Faucher said. “Inflation has slowed, although it remains well above the Fed’s 2% objective, and the job market is softening.”
The Policy Matters report said the strong job market is “opening new doors to long-marginalized people and better enabling them to participate in work and share in prosperity.” But, it said, inequities remain for women and non-white workers and more needs to be done to raise wages and improve worker protections for everyone.
“Despite low unemployment, many Ohio jobs remain poor quality and many employers still pay poorly. Low wages hurt all workers but especially harm Black workers and other workers of color, women and migrant workers — all of whom are especially likely to be underpaid,” the report said.
The report recommends increasing the minimum wage to one that meets the cost of living, giving paid sick leave to all workers, funding quality child care for families and livable wages for care workers and protecting the right to form or join a union.
Wage gains made in the strong labor market have led some companies to pay well over Ohio’s $10.10 hourly minimum wage, said Rea S. Hederman Jr., vice president of policy at The Buckeye Institute, a conservative-leaning Columbus-based think tank.
“Raising the minimum wage will do little to help most Ohio workers but instead harm some potential workers,” Hederman said. “In rural areas, a higher minimum wage will make it harder for businesses to hire more workers. Other potential workers, including younger workers, will find it harder to get jobs with a higher minimum wage. Larger businesses will speed their transition to technology instead of hiring more workers.”
Hederman also said sick leave and child care benefits should be negotiated between companies and employees.
“Some employees would rather have more cash than benefits and letting employees have more choice in whether they want cash or benefits is better than a government mandated floor,” Hederman said. “We have seen a record number of employees change jobs as they seek an opportunity with better pay or benefits. "
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