Editorial
Grabbing the rebound
2/4/2012In Toledo and throughout the Midwest, improving employment numbers are gladdening the hearts of many job-seekers, as well as politicians who get blamed for job loss even when they have relatively little to do with it. The figures are encouraging, but must be kept in context -- and in no way lessen the urgency of the continued need to diversify the economies of Ohio and Michigan.
Among recent positive indicators:
● Since the Great Recession touched bottom in April 2009, the economies of Ohio and Michigan have recovered faster than the rest of the country, according to the Federal Reserve of Philadelphia.
● Ohio's unemployment rate in December was 8.1 percent -- the lowest in three years and below the national average of 8.5 percent. (The U.S. jobless rate fell to 8.3 percent in January, a three-year low.) Ohio added more than 72,000 nonfarm jobs last year, more than one-fourth of them in manufacturing.
● Michigan's jobless rate was 9.3 percent in December, down from 11.1 percent in the year-ago month. Michigan gained 66,000 jobs last year.
● Since the recession officially ended in mid-2009, metropolitan Toledo has gained manufacturing jobs at a faster rate than all but two of the 100 largest U.S. metro areas, a new study from the Urban Institute concludes. Metro Toledo's unemployment rate in December was 8.6 percent -- the highest in Ohio, but still down from 10.3 percent a year earlier.
Now the corrective: The jobless rate does not measure people who have dropped out of the labor force, as 21,000 Ohioans did in December. Nor does it account for those who want to work full time but can find only part-time jobs.
If the official unemployment rate made these distinctions, it would be nearly twice as high. Perversely, a declining rate could be a bad sign, if it means that larger numbers of job seekers are simply giving up out of frustration.
And if Ohio and Michigan are coming back faster than other states in adding private-sector jobs, that's partly because they fell farther before. The Urban Institute study that noted Toledo's recovery of manufacturing jobs also reported that the four-county area has lost one of every five such jobs it had five years ago. Ohio lost more than 400,000 manufacturing jobs over the past decade.
That doesn't mean that manufacturing is no longer important to this region; it remains a pillar of the economies of Ohio and Michigan. As auto production and sales rebound, this region stands to benefit in particular. The recovery of the domestic auto industry, reflected in Chrysler LLC's expansion plans at its Toledo assembly plant, vindicates the decisions by the Obama and George W. Bush administrations to bail out General Motors and Chrysler and ensure their survival.
But it does mean that traditional industry will never again define the region as it once did. Both states must work to attract jobs in export-related industries and in emerging fields that will require well-schooled, trained workers: education, health care, and high-end services.
President Obama and Gov. John Kasich extol the value, for both direct and spin-off job creation, of expanded oil and natural-gas production in such areas as the Utica Shale in northeast Ohio. In a recent guest column in The Blade, Thomas Stewart, executive vice president of the Ohio Oil and Gas Association, estimated such production in the state could generate more than $1 billion in annual tax revenue by 2015.
The new jobs and money must be accompanied by appropriate regulation to protect the environment, and fair taxation to enable Ohioans to share the benefits as well as the risks of ramped-up fossil-fuel production. At the same time, the state's commitment to "green" manufacturing must not recede.
A new report by the Ohio BlueGreen Apollo Alliance, a coalition of unions and environmental groups, says Ohio is well placed to create thousands of good-paying clean-energy jobs, given the state's skilled work force and extensive manufacturing infrastructure. It sensibly recommends federal and state incentives to private renewable-energy manufacturers and energy-efficiency projects to help stimulate such growth.
They include loans to clean-energy manufacturers and support for research and development, worker training, and plant retooling. That is less likely to happen as long as federal and state politicians use the over-hyped Solyndra "scandal" and similar cudgels as excuses to oppose alternative-energy funding.
The best strategy to regain and create productive jobs in Ohio and Michigan remains a balance of traditional and developing industries, and support of private-public partnerships when they are appropriate. The ability of government to encourage job creation is limited, but it is not insignificant, and it should continue to aim for economic diversification.