Ohio’s employment picture marred by shrinking workforce

By Jason Hart | Ohio Watchdog

Ohio’s unemployment rate is shrinking, but a new Opportunity Ohio study shows residents were less likely to work and seek work in 2013 than at any point since 1999.

Opportunity Ohio reviewed U.S. Department of Labor data for the 15-year span and compared Ohio’s labor force participation to other states as part of a national Liberty Foundation project. Relative to other states and the District of Columbia, Ohio’s labor force participation rate was ranked 36th in 1999 and 31st in 2013.

Despite this relative improvement, the percent of Ohioans in the workforce dropped from 66.9 percent to 62.9 percent during the same period. Ohio’s labor force participation rate was 67.8 percent in 2007, and it has declined every year since.

Rather than bottoming out after the 2007-09 recession, Ohio’s workforce has continued to drop even as employment has rebounded.

In an Oct. 7 Facebook post, Opportunity Ohio wrote: “It is clear federal policy mandates and actions such as ObamaCare, the Obama Administration’s attack on the energy industry, America’s ineffective foreign policy, and other federal initiatives causing uncertainty in our economy are the leading causes of this outcome.”

While it may seem easier to peg retirements among an aging populace as the reason Ohio’s workforce is shrinking, a close look at the numbers proves otherwise.

“People are always retiring, but with the labor force participation rate decline to a 30(plus) year low and record declines spread consistently across many demographic groups outside of the 65(plus) group, it is clear our economy is not working properly,” Opportunity Ohio President Matt Mayer told Ohio Watchdog via email.

In fact, Opportunity Ohio found the oldest age groups were the only groups in which labor force participation rates increased from 1999 to 2013.

Labor force participation among Ohioans 55 to 64 increased from 55.5 percent to 62.5 percent. Among those age 65 and older, the rate increased from 10.7 percent in 1999 to 18.9 percent in 2013.

The 2010 Census estimated 14.1 percent of Ohio’s population was age 65 or older, compared to 13.3 percent in 2000.

Workforce participation rates across all other age groups declined from 1999 to 2013. Among 16- to 19-year-old Ohioans, workforce participation plummeted from 59.3 percent to 43.8 percent.

Workforce participation among Ohio women decreased from 60.3 percent in 1999 to 58.3 percent in 2013; among men the rate dropped from 74.2 percent to 68 percent.

“Given Ohio’s strong blue-collar history and the decline of manufacturing during the last decade, it isn’t surprising that a weak economic recovery is impacting men with certain skill sets more than women,” Mayer explained. “The fact that both men and women are down four-plus points since 2008 signals structural weakness in the broader economy.”

Workforce participation has also dropped sharply among black Ohioans, from 64.4 percent in 1999 to 57.3 percent in 2013. In 2001, the workforce participation rate for black Ohioans was 67.2 percent.

“As Walter Russell Mead has written, there are lots of reasons why African-Americans get left holding an empty bag — from the continued effects of slavery and the Jim Crow Era to the noted breakdown in the African-American family,” Mayer said. Read is editor-at-large for The American Interest.

“We know the best route out of poverty is a job, so the best thing we can do to help Americans get back to work is to put in place policies that foster a strong economy like low taxes, affordable energy, responsible but efficient regulatory burdens, fiscal accountability, expanded trade and global stability.”

Negative workforce participation trends have been even worse in other U.S. states, but declines similar to Ohio’s aren’t universal.

“North Dakota and the District of Columbia have done the best due to the Bakkan energy field in North Dakota and the growth of the federal government in Washington with all of the federal jobs, government contractors, lawyers and lobbyists,” Mayer said.