Ohio Unemployment Rate Drops

The state of Ohio, one of the Rust Belt’s hardest hit economies during the recession, is now recovering faster than some other states.

It has done especially well compared to states that were not affected as much by the recession. Last year, the U.S. Labor Department said Ohio businesses added almost 69,000 jobs between May 2010 and May 2011, making it seventh on the list of total adjusted job growth, behind North Dakota, Texas, Nebraska, Wyoming, Oklahoma and Utah.

The state ended the year in December with an unemployment rate of 8.1 percent, down from 8.5 in November. Ohio’s unemployment rate remained lower than the national figure of 8.4 percent, according to the Bureau of Labor Statistics. While the

state’s unemployment numbers generally mirrored the national average, 2011 was the first year since 2003 that Ohio’s unemployment rate had dropped below that of the national rate.

In a speech in Columbus last week, Ohio governor John Kasich attributed the job growth to the return of manufacturing jobs to the state, in particular the auto industry. Earlier this month, Honda Motor Co. announced its plans to set up a manufacturing plant for its Acura NSX model in Ohio. In addition, the discovery of natural gas deposits near Youngstown are also expected to create substantial industry jobs.

According to the Bureau of Labor Statistics, 18,300 manufacturing jobs were added last year.

“Manufacturing has made a comeback,” said Robert J. Gitter, Professor of Economics at Ohio Wesleyan University in Delaware, Ohio.

“A lot of goods made in Ohio are durable, built to last more than three or four years, such as cars. When the recession hit, people were more likely to hold on to those goods than buy new ones. With people feeling a little more secure with their money, purchases will go up and so will the manufacturing jobs.”

In addition to manufacturing, Gitter said other Ohio industries were adding jobs. “We do have an Information Technology presence and the healthcare sector is also adding jobs. If you look at nearby major cities like Cleveland and Pittsburgh that have traditionally been known for their manufacturing industries, you’ll see that healthcare has led the way

Gitter said he did not think local government efforts have had much impact on the

economy. “[Governor Kasich] gets too much blame and too much credit. You can do a little bit in terms of tax breaks and legislation, but these measures are overwhelmed by national conditions.”

However, Gitter remained cautious about the unemployment rate. He said part of the drop in the figure could be attributed to the thousands of people who had dropped out of the workforce, essentially giving up looking for a job. Well that’s actually an important point that should have been higher in the story.

In a press release, the Ohio Department of Jobs and Family Services said the number of workers unemployed in Ohio in December was 469,000, down from 496,000 in November.

It remains to be seen whether the increase in jobs will also mean an increase in average income. In 2010, Ohio’s median annual household income was $45,090, well below the national figure of 50,046 according to the American Community Survey. This figure was the lowest recorded for Ohio since the census began collecting data in 1984. 2010 also marked the worst year for the poverty level of Ohio, reaching 15.3 percent, worse than the nation’s at 15.1 percent.

-Omar Bilal Akhtar

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