State of the State Update: It’s Worse Than We Thought

By Matt Mayer
hat tip: Buckeye Institute
March 11, 2010

With the March 2010 employment data, the U.S. Bureau of Labor Statistics (BLS) revised its state employment data back to 1990 (www.bls.gov/eag/eag.oh.htm).  As you may recall, our report, “State of the State: Two Decades of Weak Job Growth and Skyrocketing Government Costs Pose Daunting Challenges for Ohioans,” highlighted several sobering pieces of BLS employment data (original data from the report in parens below).  The new BLS data paints an even more troubling outlook for Ohio.

Specifically, from January 1990 to January 2000, Ohio’s job market added 714,900 jobs (720,200), which was the 37th best in America.  From January 2000 to January 2010, Ohio’s job market lost 635,000 jobs (544,100), which was the 2nd worst in America.  From January 1990 to January 2010, Ohio had the 3rd (6th) worst job market in America — Ohio added a net of 79,900 jobs (176,100) over 20 years, or less than 4,000 per year (9,000) for Ohio’s 11.4 million people.  This growth amounted to an increase in jobs of 1.9% (4%) from 20 years earlier.  Only Rhode Island (-1.7%), Michigan (-2.2%), and Connecticut (-4.9%) had worse job markets.

As a point of comparison, in January 1990, Ohio had 714,800 (714,000) people working in government.  As of January 2010, 781,900 (789,100) Ohioans worked in government.  Thus, from January 1990 to January 2010, Ohio added 67,100 (75,100) government jobs.  That means that for every 1.19 jobs created over those 20 years in the private sector, Ohio added 1 government job.  This ratio is the 4th worst in America, exceeded only by New Jersey (.96), Connecticut (-1.93), and Michigan (-3.54).

In terms of the 10 industry sectors, there are fewer jobs today than there were in January 1990 in 5 sectors (Mining & Logging; Construction; Manufacturing; Information; and Trade, Transportation & Utilities); there are fewer jobs today than there were in January 2000 in 4 other sectors (Financial Activities; Professional & Business Services; Leisure & Hospitality; and Other Services); and only the sector tied to government spending in K-12 education, higher education, and health care has more jobs today than in 2000 or 1990 (Education & Health Services).  If the Financial Services sector loses another 13,800 jobs, it will join the 5 sectors with fewer jobs today than in 1990.

Finally, in comparing states that force workers to join a union to those states that protect workers’ economic freedom, states that have Right to Work laws had an average increase in jobs from January 1990 to January 2010 of 36% (38.5%) as states that force workers to join a union only experienced an average increase in jobs of 16% (17.5%), or 2.3 times less than Right to Work states.  The bottom 15 states continue to be populated entirely by forced unionization states as 10 of the top 15 states are Right to Work states.  In fact, 18 of the top 25 states with the strongest and most sustainable job growth, or 72%, are Right to Work states; in contrast, 22 of the bottom 26 states with the weakest and most unsustainable job growth, or 85%, are states that force workers to join unions and the District of Columbia.  This very strong correlation between strong/sustainable and weak/unsustainable job growth and worker freedom cannot be ignored.

Given this troubling revised BLS employment data, the issues raised in our report (www.buckeyeinstitute.org/article/1479) are as critical as ever.  This data, when combined with the high tax burden and the explosion of government worker compensation noted in our report, requires far bolder actions and specificities about those actions than we have heard thus far from those leading us and seeking to lead our state.  It is time our leaders and those seeking to lead us dispense with the generalities, soundbites, and cliches and give Ohioans detailed answers on how they plan to solve Ohio’s problems, especially as we face a projected budget deficit of $4-8 billion.

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