State of working Ohio: Weak economy, persistent divides

COLUMBUS — How much Ohio workers earn and whether or not they have a job often depends on their race, gender or where they live, according to The State of Working Ohio 2016, a new report from Policy Matters Ohio released this Labor Day weekend.

Ohio’s gender pay gap has narrowed over time, but median wages for men are $3.36 higher than for women. Black workers saw their wages rise by 8 percent last year, but at the median, still earn $3.35 an hour less than Ohio’s white workers. In 10 southeastern Ohio counties, the median household income for a family of three was less than $40,000 a year, according to the report.

America’s economy has grown much more productive (although growth has slowed recently), but it does not translate into wage gains for regular workers. Between 1973 and 2015, productivity grew 6.6 times more than pay at the national level.

Official unemployment was low (4.9 percent) in Ohio in 2016, and for the first time since 2006, Ohio saw a second consecutive year of reasonably healthy inflation-adjusted wage increase, bringing median hourly compensation to $17.36 in 2016, closer to that of the nation ($17.80) than it has been since the mid-2000s.

According to the report, the unemployment rate in Madison County was 3.8 percent.

“Ohio has deep inequalities along racial, gender and geographic lines,” said report author and Policy Matters executive director Amy Hanauer. “Inequalities are exacerbated by weak labor markets, where employers often have the upper hand. Since the Great Recession, Ohio jobs and earnings have consistently trailed the nation.”

Despite a low unemployment rate of 4.9 percent in 2016, the report shows that Ohioans left the labor force in droves during the Great Recession of December 2007 to June 2009 and have still not fully rejoined.

In 2016, Ohio’s labor force participation rate (share of workers employed or seeking work) crept up to 62.6 percent from 2015’s 36-year low of 62.3 percent.

The 2016 share of workers actually employed (called employment-to-population ratio or E-POP) was 59.5 percent, down from a 2000 peak of 64.6 percent.

Ohio is one of only a handful of states that still, in July 2017, had fewer jobs than prior to the early 2000s recession. There were 5.5 million jobs in Ohio as of July.

Ohio’s 2016 job growth was weaker than in any other year since the recession’s end.

Meanwhile, income inequality continues to widen. As of 2014, the top 1 percent of Ohio earners brought in more than 19 times as much as the average of the bottom 99 percent of earners combined. Despite huge growth in the national economy and a better educated workforce since 1979, 60 percent of Ohio workers have seen inflation-adjusted wage decline compared to workers of that previous generation. Only the richest 30 percent are doing better than comparable workers of 37 years ago.

According to the report, the average income in Madison County in 2016 was $47,634.57 in 2016. The medium income for Madison County was $57,406. The average income of the top one percent in Madison County was $634,392.88.

Unionized workers in Ohio make $4 an hour more than their non-union counterparts.

The share of workers in unions declined between 1983 and 2016 from 28 to 12 percent of men and from 18 to 11 percent of women.

Since 2000, the share of white workers in unions fell from 14.4 to 11.7 percent and of black workers from 19 to 14.5 percent. The share of black workers (14.5 percent) who are in a union is larger than that of white workers (11.7 percent).

Of the 13 most common occupations in Ohio, 11 pay less than $34,000 a year.

It pays to finish high school and college, but wages for college graduates fell by more than $2 an hour, adjusted for inflation, since 2000.

“We know how to fix these problems — and it isn’t giving more tax cuts to the wealthiest Ohioans,” Hanauer said. “Unions drive wages up and close race and gender gaps. Investments in energy and infrastructure create jobs and position us better for the future. Education spending, from cradle to career, is good for the next generation and can help parents afford to work now. Better funded higher education would make college more accessible and help working class students get ahead. The resources are there. We just need the vision and the will.”

Staff report

Policy Matters Ohio is a nonprofit, nonpartisan state policy research institute with offices in Cleveland and Columbus.