Ohio Job Losses Worst Since Great Depression

According to the U.S. Department of Labor, Ohio had 209,400 fewer nonfarm jobs in December 2007 than it had in December 2000. This loss of 3.7 percent of Ohio’s jobs is the worst seven-year loss in state records that begin in 1939 as the Great Depression was ending. (The details are in my special report [1].) The previous seven-year job loss record was the period ending in 2006 (3.6 percent of jobs lost) and before that the record was held for the period ending in 1962 when 3.4 percent of jobs were lost in the demobilization after the Korean War.

Nine of the state’s 13 metropolitan areas suffered recent job losses more severe even than Ohio’s statewide losses. Most devastated is the Springfield area, losing 10.0 percent of its jobs over the last seven years. The other areas with job losses worse than statewide include Canton (8.6 percent job loss), Dayton (7.6 percent), Mansfield (6.5 percent), Youngstown (6.3 percent), Lima (5.7 percent), Cleveland (5.5 percent), Toledo (5.0 percent) and Steubenville, Ohio–Weirton, W. Va. (3.8 percent).

Only three of Ohio’s metropolitan areas added jobs over the past three years and none of them even matched the 4.3 percent overall U.S. job growth, the weakest seven-year period since the mid-1940’s demobilization from World War II. The Akron area has the best recent record in Ohio, adding 4.1 percent to its job base since 2000. Jobs increased by 2.0 percent over the period in Cincinnati and by 1.7 percent in Columbus while declining by 2.7 percent in the Sandusky area.

The industrial composition of Ohio job losses and gains reflect recent record trade deficits and the explosion of household and federal debt stimulus. Over the past seven years Ohio lost 23.3 percent of its manufacturing jobs (236,000 jobs,) lost construction jobs, lost jobs in wholesale and retail, lost jobs in information services and even in financial activities. Recent job growth came in private health services bureaucracies (100,100 jobs), restaurants and bars (24,500 jobs), and in state and local governments (18,700 jobs), mostly for public education, health care and prisons. Since 2000, Ohio added just 2,500 jobs in firms providing professional, scientific and technical services.

That is, every industry that is capable of exporting and faces foreign imports or routine outsourcing lost jobs in Ohio over the past seven years. All new jobs are in domestic consumer services that rely on soaring levels of debt.

Ten of Ohio’s metropolitan areas suffered plunging jobs in manufacturing that are even more severe than for the state as a whole. Over the past seven years Springfield lost 46.9 percent of its manufacturing jobs, Sandusky lost 36.5 percent, SteubenvilleWeirton 31.4 percent, Dayton 31.2 percent, Lima 30.7 percent, Canton 30.6 percent, Youngstown 27.3 percent, Mansfield 25.7 percent, Cleveland 25.2 percent and Columbus lost 24.4 percent.

Even the three areas with less precipitous manufacturing job losses than the state as a whole suffered severe losses. Akron lost 17.5 percent of its manufacturing jobs over the past seven years, Cincinnati lost 18.4 percent and Ohio lost 22.6 percent.

The U.S. lost a record 19.8 percent of its manufacturing jobs over the past seven years. The previous record, before recent years, was the loss of 14.6 percent from the peak of the World War II buildup in 1942 to the depth of the demobilization in 1949.

Record-smashing U.S. manufacturing trade losses (production shortages) totaled over $3.0 trillion over the past seven years as the full current account trade losses reached $4.3 trillion.

Together with the unprecedented loss of total jobs — particularly highly productive/high wage manufacturing jobs — the industries that are creating jobs in Ohio are also of concern. These jobs are almost entirely in less productive, lower-paying industries — including the low end of the “professional and business services” category — that cannot create export earnings to offset the cost of imported oil, autos, computers, clothing, etc. But with rising health care costs a serious obstacle for U.S. businesses and households alike, it is troubling that the vast majority of new jobs in Ohio are in private and public health care bureaucracies.

The jobs data tell only one important part of Ohio’s past seven-year economic story. Yet these record job losses bare strong witness to the depressing effects of record trade deficits and the loss of U.S. production that they represent. Another key part of Ohio’s past seven-year economic history is the unprecedented levels of household and federal debt stimulus that — even in Ohio — played a vital role in moderating the effects of import competition, outsourcing and job loss. With the soaring engine of household debt now sputtering and debt service payments rising, strong industrial and trade policies seem urgently needed to halt Ohio’s further decline.