Many Ohioans still struggling despite low unemployment

Key findings in Policy Matters Ohio's report, "Still Struggling: The State of Working Ohio 2016":

• Labor force participation, at 62.3 percent, was at a 36-year low in 2015.

• Ohio unemployment is low — 5 percent in June and 4.8 percent in the not-yet-adjusted July numbers.

• Wages climbed to $16.61 in 2015 for the median Ohio worker after several years of decline.

• Ohio finally recovered the jobs lost in the recent recession, but still has fewer jobs - 5.5 million - than prior to the early 2000s recession, when there were 5.625 million jobs.

• Ohio’s fastest-growing sectors and most common jobs are low wage. Of the 13 most common occupations, only two pay more than 200 percent of the official poverty line for a family of three. Nine of these most common jobs pay less than $30,000 a year with full-time, year-round work.

Unemployment is down and wages are up, but the labor market recovery from the Great Recession remains an unbalanced tale of prosperity for some Ohio families and continued despair for others.

Despite years of solid job gains, many working-age Ohioans are still sitting on the sidelines battling long-term unemployment, working jobs that pay a fraction of what they used to earn or have been forced to work multiple part-time jobs just to put food on the table and gas in their cars. Even workers with decent jobs haven’t seen a pay raise in years.

But that’s beginning to change. Last year, median hourly wages for Ohio workers climbed marginally to $16.61 after several years of decline, according to a new report from Policy Matters Ohio: “Still Struggling: The State of Working Ohio 2016.”

But Ohio wages remain far behind what they were more than 30 years ago in inflation-adjusted dollars, according to the report, which attributes the lag in large part to the fact that most of the fastest-growing jobs in the state are disproportionately low-paying.

Over the 12 months ending in July, employment in the leisure and hospitality industry — which generally offers low wages, shallow benefits and part-time work in bars, restaurants and retail outlets — accounted for 20 percent of the 78,800 jobs added in Ohio, according to state jobs figures. That was second only to educational and health services, which accounted for about 25 percent of the job growth, but also includes more higher-paying jobs.

According to Policy Matters, of the 13 most common occupations in Ohio, only two pay more than 200 percent of the official poverty line for a family of three, or about $40,000 annually. And nine of the most common jobs pay less than $30,000 a year for full-time, year-round employment.

“Ohio is finally emerging from the deep recession into a slow and halting recovery,” said Amy Hanauer, lead author and executive director of Policy Matters, a left-leaning think-tank based in Columbus. “But when you look at wages, it’s no wonder families are still struggling.”

Many of the hardest hit have been blue-collar working-age men who lost their jobs when the automotive industry collapsed during the 2007-2008 recession, shutting down plants and factories across the state.

A good number of factory jobs have come back to the state and the area, including hundreds of jobs at the Procter & Gamble distribution center, Fuyao Glass America plant in Moraine, and Navistar in Springfield, among others. But with entry level wages around $13 an hour, the pay at Fuyao, for example, is about half of what it was at the GM plant that used to sit at the same location.

“If you lost a manufacturing job, often what’s available to you now is just not as good as what you once had,” Hanauer said. “So a lot of these men just look for awhile, and then they just kind of decide to retire early, take care of the grand kids, or something other than going back to work.”

The trend has contributed to a dramatic decline in labor force participation, or the percentage of the population that is either working or actively seeking work. That number hit a 36-year low in 2015 at 62.3 percent, according to the Policy Matters report.

And working-age men have led the decline. Last year, only 81.7 percent of prime working age men, age 25 to 65, were working, the report found. That compares to more than 90 percent of working age men in Ohio who had been employed for decades before the recession began.

While disparity in jobs and wages persist, Ohio has recovered all the jobs lost in the recession, and unemployment is at its lowest level in more than a decade at 4.8 percent in July. That’s lower than the national rate, which was 4.9 percent in August.

But the outlook is bleak for those less-educated Ohio workers displaced by structural changes in the economy that mean a growing share of future jobs will require a college education, according to George Davis, chair of the economics department at the Farmer School of Business at Miami University in Oxford.

“I don’t see anything on the near-term horizon that’s going to change the trends in what we’ve been seeing,” Davis said. “It may be that we’re still experiencing that shift in demand to a more trained and educated labor force. If you’re not able to add to you education and training, you might still have a difficult time getting a good job.”

Still, there are reasons to be optimistic for those people who do develop the skills they need to compete for new-age jobs, he said: “The labor market I deal with the most closely is the one that involves my students here at Miami, and they’re in high demand.”

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