Ohio's economy is hot. What will make it even better for workers and businesses?
Ohio’s economy is tipping toward workers, after years of favoring businesses and employers. That’s the conclusion in an annual report from a progressive think tank. The group has ideas for improvement, but a research group on the other side of the spectrum has different views.
Ohio's economy is hot this year, according to the State of Working Ohio 2023 report from Policy Matters Ohio, a group funded by foundations with left-leaning views including labor unions.
“We just recovered all of our jobs that we had lost to COVID 19 and hit a record number of jobs across the state this past July," said the report's lead author, economist Michael Shields. "We've got a record number of jobs and nearly two job openings for each unemployed job seeker.”
Ohio’s 3.3% unemployment rate, the lowest it’s been since 1976, is good news, Shields said, and many workers are using the good labor market to find and push for better jobs, better pay or better benefits.
But, he said, Ohioans still make an average of just over $21 an hour, which isn’t a living wage for most of them. And recent pay growth isn’t catching up with decades of pay inequality between workers and employers, Shields added.
“We've had a real disconnect between the wealth that people are creating and what's been reflected in their pay for a long time," Shields said. "And we're also finding that pay is just not living up to what most people need in Ohio, unfortunately. “
A leading conservative research group agreed there is good news in Ohio's economy, but has different views on why.
The Buckeye Institute has backed many economic policies that have passed in Ohio in recent years and is tied to Republican, libertarian and right leaning groups, including the Charles Koch Foundation.
The institute's research fellow Greg Lawson said another reason Ohio's unemployment rate is low is because people have dropped out of the workforce and because Ohio is an aging state and needs to recruit younger workers. The concern that many Ohio workers are not earning a living wage is, in Lawson's words, “overstating things." But he agreed the labor force shortage is helping some workers.
“It's kind of, it is compelling those businesses to have to raise their wages themselves without having to have the government come in and impose some sort of a of a minimum wage, which I know is going to be something we're going to probably be talking about a lot over the next year," Lawson said.
In his report, Shields listed raising the minimum wage as one of 10 recommendations to further improve Ohio’s economy, and he notes, Policy Matters Ohio is part of the coalition circulating petitions for a ballot issue next year. Shields' list of suggestions also includes protecting the right to unionize, stopping wage theft, guaranteeing paid sick leave and funding quality child care.
Lawson agreeed on the need to find affordable child care solutions, but he doesn't see government involved in that.
“There's a lot of options that are there, and we probably need to figure out how we can facilitate some of that. Are we going to have to pay some of the workers obviously more? I think the answer is eventually we probably are," Lawson said. "In order to get people into the workforce, you're going to have to pay them. And that's not going to necessarily be cheap."
Both Lawson and Shields agreed on legislation that would end what are known as collateral sanctions against people who have criminal records that keep them from working.
But beyond that, they disagreed on the role state government plays in improving the state's economic climate. Lawson said while the state has brought in big companies like Intel, more needs to be done for smaller ones fighting their local tax burden.
“Ohio still struggles to do a lot for a lot of those kind of businesses, whereas frankly, we do quite a bit for a lot of the big guys," Lawson said. "We roll out the red carpet with tax abatements. Tax abatements may help the big guy, but you know what they also did? They raised the overall tax burden on other people that don't get the tax abatements.”
But Policy Matters Ohio has said state and local taxes are lower than the national average, that Ohio's tax climate is already friendly to small businesses and that state tax cuts take funding away from local communities.
By following the recommendations in his report, Shields said, legislators can balance the power that corporations and the wealthy have gained with the good lives that their workers want. He said all workers would benefit but especially Black workers.
“For the last year, the unemployment rate for white Ohioans was 3.3%. It was 7.2% for their Black counterparts," Shields said. "We need to be pulling everybody in. We need a strong labor market to do that.”
Shields is also concerned about employers lobbying lawmakers to change legislation on working teenagers, which he said in certain circumstances violates federal laws protecting workers under 18. Lawson acknowledged there’s been a push for that, but said the expectation is that teenagers and those in minimum wage jobs will work their way up to better paying positions or get more education.