At 4.8% for July, the Ohio unemployment rate is firmly in pre-recession territory, and the state is on a job-gaining trend. But that doesn’t give the full picture of how things are for working Ohioans, says the state’s leading labor policy issues think tank.
“It’s hard to describe the economy with just one number," says Amy Hanauer with Policy Matters Ohio, a left-leaning research group. Her annual report on working Ohio shows some other numbers she says are disturbing – the number of Ohioans actually in the labor force is at a 36 year low, with just under 82 percent for working age men, a stat Policy Matters says is alarming. Wages climbed last year for the median Ohio worker but are still far behind what they were in 1970, and Ohio’s fastest growing sectors and most common jobs are low wage. Policy Matters Ohio and the state’s leading conservative think tank, the Buckeye Institute, don’t agree on much.
“There’s no question the unemployment rate used to be the thing that everybody looked to, but it’s not telling the whole story anymore," says Greg Lawson with the Buckeye Institute.
While the two groups agree that the stats are worrying, they disagree strongly on how to address them. Policy Matters Ohio advocates several ideas, such as encouraging labor unions, improving state and federal earned income tax credits, providing childcare and investing in infrastructure, transit and education. Lawson balks at most of this – for instance, he says he wants to see more reforms before putting extra money into education.
“We continue to spend more on education, but we really are stagnant when you do these national tests that look at how students are performing.”
Hanauer says advocating for education reform is just another way of suggesting privatization of public schools, which she says hasn’t worked, “Instead of doing unproven things that really enrich some political donors like enabling private charter schools that have terrible performance, we should instead be investing in early education which has just shown to work.”
State lawmakers and Gov. John Kasich have said they still like the idea of tax cuts – and that’s an issue where these two groups differ greatly. Policy Matters Ohio notes in its report that the top 1% earn more than $752,000, while the rest of Ohio earns an average of around $43,000. The group suggests paying for all its suggestions by taxing those at the very top of the income scale. Hanauer says since the tax cuts of 2005, Ohio has had lower rates of job creation as a whole – so it’s time to ignore those who push for more tax cuts.
“It’s crazy. Cutting taxes does not create jobs, and it does not improve our economy. What it does do is force us to lay off people that are doing important work in our communities.”
Lawson says the Buckeye Institute doesn’t believe in just doing more income tax cuts – he says tax reform is what’s needed. And he adds that the idea that tax cuts create income inequality is a false narrative.
“We have a problem with not having enough jobs. You have real inequality when people don’t get jobs at all. If we want to close these things that my good friends at Policy Matters are concerned with, we gotta be able to create more jobs faster so that people can start moving up quicker the ladder of success and making more money.”
Lawson has also been pushing for regulatory changes such as loosening the rules on certification and licenses for certain occupations, which block some lower-income people from entering certain industries. Hanauer agrees tax cuts don’t create income inequality, but she says they don’t help. And she’s very concerned about ongoing racial and gender disparities. Black workers earn 76 cents for every dollar white workers earn, and women make 81 cents for each dollar their male counterparts do – which translates to a potential $7,000 difference over a year.