Innovation Ohio

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Legislative Alert: US House moving forward with deceptively-named Working Families Flexibility Act

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Congress is moving forward with the deceptively-named Working Families Flexibility Act (H.R. 1180/S. 801), which would result in the loss of overtime pay for millions of Americans. Tomorrow, the bill will head to the House Education and Workforce Committee for mark up and vote – and we need your help to stop it in its tracks!

The legislation has been touted as a proposal that would “help” workers by allowing them to bank overtime hours instead of receiving pay. In reality, it would result in a pay cut without any guarantee of flexibility or time off.

For example: under this bill, you could work extra hours and sacrifice time with your family to accrue leave for an upcoming surgery, but your employer has the right to deny your request no matter how much extra time you worked and saved.

Too many American workers are already struggling to meet the demands of work and family. Instead of improving working conditions, the Working Families Flexibility Act would only give workers less flexibility, less time, and less pay.

TAKE ACTION

Call the Capitol Switchboard at (202) 224-3121 to be connected with your member of Congress, and tell them that a vote for the smoke-and-mirrors proposal known as the Working Families Flexibility Act is a vote against working families. Tell them to vote NO on H.R.1180/S. 801.With your help, we will continue to push for legislation at the local, state, and federal level that will help working families. Tell your lawmakers right now that we need truly fair and family friendly policies – not ones that would do more harm than good.

Here are some resources to help you understand what the bill would mean for working families:

  • The Working Families Flexibility Act Will Hurt Women and Families (read more)
  • What’s Wrong with Comp time? Ask Government Workers (read more)
  • 85 Organizations Oppose Working Families Flexibility Act Coalition Letter (read more)

Lame Duck Lawmakers Block Local Wage, Sick Leave Laws

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Take Action Now: contact your State Representative today to oppose SB331

Today, the Ohio House is moving a bill that radically undermines the notion of local control and ties the hands of communities to set standards for the treatment of workers.

Enshrined into the constitution is a strong commitment to local control, or “home rule”:

Municipalities shall have authority to exercise all powers of local self-government and to adopt and enforce within their limits such local police, sanitary and other similar regulations, as are not in conflict with general laws.

Ohio lawmakers appear ready to throw that notion out the window with the adoption today of a major overhaul to Substitute Senate Bill 311, which would block the authority of communities around Ohio to, among other things:

  • Regulate the sale of puppies from unlicensed breeders at pet stores
  • Adopt a minimum wage rate higher than the state minimum
  • Adopt any ordinance that regulates worker benefits, schedules or work locations.

The bill was originally written when lobbyists for Petland sought to block ordinances adopted in Grove City and Toledo that would crack down on the sale of puppies at pet stores. The fix contains a “hobby breeder” loophole that experts say could be used by unethical breeders to sell their dogs at pet stores.

More recently, the business community jumped in with a wish list of its own, getting the following language added to the bill:

No political subdivision shall establish a minimum wage rate different from the wage rate required under this section.

The move is an attempt to undermine a measure on the ballot in Cleveland that would have asked voters whether to gradually raise that city’s minimum wage, but also blocks any other city from doing so.

And, reacting to a movement from progressive cities around the U.S., special interests saw a measure adopted that would block cities from requiring local employers to provide earned sick time, family leave or regulate practices that require workers to be on call for shifts without pay and by which employers can make last minute scheduling changes that leave workers in the lurch – especially if they need child care or want to hold down a second job. From the proposed amendment:

Except as otherwise expressly provided in state or federal law, the following matters are exclusively the result of an employer’s policy, an agreement between an employer and the employer’s employees, a contract between an employer and the employer’s employees, or a collective bargaining agreement between an employer and the employer’s employees:

(1) The number of hours an employee is required to work or be on call for work;

(2) The time when an employee is required to work or be on call for work;

(3) The location where an employee is required to work;

(4) The amount of notification an employee receives of work schedule assignments or changes to work schedule assignments, including any addition or reduction of hours, cancellation of a shift, or change in the date or time of a work shift;

(5) Minimizing fluctuations in the number of hours an employee is scheduled to work on a daily, weekly, or monthly basis;

(6) Additional payment for reporting time when work is or becomes unavailable, for being on call for work, or for working a split shift;

(7) Whether an employer will provide advance notice of an employee’s initial work or shift schedule, notice of new schedules, or notice of changed schedules, including whether an employer will provide employees with predictive schedules;

(8) Whether an employer will provide additional hours of work to employees the employer currently employs before employing additional workers;

(9) Whether an employer will provide employees with fringe benefits and the type and amount of those benefits.

SB 331 was reported favorably by the House Finance committee this morning, and is expected to be voted on by the full House this afternoon.

Take Action Now: contact your State Representative today to oppose SB331

Women’s Groups Ask For Ohio Unemployment Fix

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Yesterday, IO Policy Director Terra Goodnight spoke to a legislative committee considering changes to Ohio’s unemployment insurance system. On behalf of the Ohio Women’s Public Policy Network, Terra spoke about ways the state program disadvantages women who lose their jobs. Her testimony is below.

Terra Goodnight, Policy Director, Innovation Ohio
Testimony to the Unemployment Compensation Reform Joint Committee
November 3, 2016

Good afternoon Chairman Peterson and members of the Committee. My name is Terra Goodnight, and I am the Policy Director at Innovation Ohio, a policy and advocacy non-profit in Columbus. I am here today to speak on behalf of the Ohio Women’s Public Policy Network – a statewide coalition of organizations that advocate for policies that benefit women. Attached to my testimony is a copy of a letter signed by many of those partner organizations.

I am here today because women have been mostly overlooked in the conversation about reforming Ohio’s Unemployment Compensation system. The program has real problems that go beyond the size of the trust fund, and those shortcomings disproportionately impact women.

Ohio’s unemployment compensation eligibility rules are out of step with our state’s changing workforce. Because these rules favor higher-wage and full-time work, women—who are more likely to work for low-pay or part-time—are less likely to receive benefits than their male counterparts. One recent analysis showed that, over the past decade, women made up over 43 percent of Ohio’s unemployed, but just 36 percent of those receiving unemployment compensation.[1] There are a number of reasons for this gender gap.

First, in order to collect benefits, Ohio requires laid-off workers to have earned a minimum average weekly wage of $243 that would be hard to achieve in many low-paying jobs. Under current rules, a minimum wage worker whose hours fluctuate between 25 and 30 hours a week is ineligible for benefits after becoming unemployed because they fail to take home the required weekly wage. In fact, in accommodations and food services, an industry where 57 percent of the workers are women, the typical worker in 34 Ohio counties earns too little to be eligible for unemployment.[2][3] Women are far more likely than men to work for low pay. Women in Ohio take home, on average, $478 per week – this drops to $410 if they are African American – compared to $710 for men.[4][5]

Even if a part-time worker earns enough to qualify for benefits, if they seek anything less than a full-time job—even one with the exact same schedule as the job they lost—they remain ineligible under another of Ohio’s outdated rules. In Ohio, 43 percent of women work part-time, compared to just 29 percent of men. For many women, including myself, a non-traditional work week is the only way to balance work with the scheduling demands of a family, especially for the one in four Ohio families with children headed by a woman on her own.

We should not preserve a system that discourages non-traditional, pro-family work schedules or that protects only those in high-paying jobs from falling into poverty. Ohio should expand its eligibility calculations to ensure even the lowest-paid workers are eligible for benefits when they lose their job. And Ohio should join the 30 states that currently allow unemployed workers to seek part-time positions and still receive unemployment benefits.

Read the Letter from WPPN members.

[1] West, Rachel, Indivar Dutta-Gupta, Kali Grant, Melissa Boteach, Claire McKenna, and Judy Conti. Where States Are and Where They Should Be on Unemployment Protections. Center for American Progress, National Employment Law Center and Center on Poverty and Inequality, Georgetown Law. July 7, 2016. http://www.nelp.org/content/uploads/Issue-Brief-State-Unemployment-Protections.pdf

[2] U.S. Census Bureau. American Community Survey, 2015 American Community Survey 1-Year Estimates, Table S2403 “Industry By Sex For the Civilian Employed Population 16 Years and Over.” November 1, 2016.

[3] Bureau of Labor Statistics. Quarterly Census of Employment and Wages, “Geographic Cross-Sections: All Counties in a State, One Industry: NAICS 72: Accommodation and Food Services.” November 1, 2016.

[4] U.S. Census Bureau. American Community Survey, 2015 American Community Survey 1-Year Estimates, Table B20017 “Median Earnings In The Past 12 Months (In 2015 Inflation-Adjusted Dollars) By Sex By Work Experience In The Past 12 Months For The Population 16 Years And Over With Earnings In The Past 12 Months” October 1, 2016.

[5] U.S. Census Bureau. American Community Survey, 2015 American Community Survey 1-Year Estimates, Table B20017B “Median Earnings In The Past 12 Months (In 2015 Inflation-Adjusted Dollars) By Sex By Work Experience In The Past 12 Months For The Population 16 Years And Over With Earnings In The Past 12 Months (Black or African American Alone)” October 31, 2016.

Dayton’s first year of paid family leave

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dayton-ohio-20694_1280In August, 2015, Dayton became the first City in Ohio to announce it was granting paid parental leave to all municipal employees. The City adopted a policy nearly identical to that available to State of Ohio employees: a two-week, unpaid waiting period followed by four weeks paid at 70 percent of a worker’s usual rate. The policy was extended to both mothers and fathers after the birth, adoption or foster placement of a new child. While on leave, employees may use accumulated leave balances to supplement their pay up to 100 percent, and, in some cases, the City approved flexible schedules to allow workers without sufficient leave balances to work part-time and still receive partial pay.

In contrast with the Family and Medical Leave Act, which requires workers to have been on the job for at least 12 months to be eligible for unpaid leave, Dayton extended benefits to all employees. Staff with less than a year on the job could still take unpaid or partially paid leave under the Dayton program.

When it implemented the policy, Dayton used a model published by Innovation Ohio to estimate the rate of leave-taking among its workforce. Using the IO model and data on the Dayton workforce, over the course of a year, the City expected 66 workers to take leave.

One year later, the results are in. In conversation with City of Dayton staff earlier this month, we learned that the actual number of employees who used parental leave was 64, very close to the 66 our model predicted. Similarly, the projected value of the leave according to the IO model was $191,000 while the actual “value” of leave used by Dayton employees was $170,000. (Note: the value of the leave is merely the number of hours at the worker’s usual rate of pay. The City did not actually incur additional costs to offer the benefit.)

Departments were not given additional funds to deal with any costs associated with workers taking leave. Instead, they were told to absorb any overtime costs within their budgets as they would for overtime used to cover other types of leave. Human Resources examined overtime use at the Police Department and found no discernable increase compared to the prior year. No other departments have reported having challenges keeping overtime under budget.

Interestingly, out of 64 employees who took leave, 54 were men. This is unsurprising, given the large proportion of safety forces — still male-dominated professions — in the City’s workforce. Fire Department employees were the top leave-takers, with 23 employees making use of the benefit, followed by 16 in the Police Department.

Also notable was the observation by City staff that most employees use all the paid leave they were afforded, in contrast to findings in California that men are less likely to take leave, and when they do are out for shorter time periods than women. This could be explained by the fact that Dayton’s policy offers 70 percent of pay during leave, with the ability to supplement up to 100 percent using accrued leave, making it far more generous than the 55 percent of pay offered in California.

Today, City staff offered an update on highlights of the program’s first year at its regular Commission meeting. We congratulate Dayton on the anniversary of this important family-friendly workplace policy.

New Report Shows Hedge Funds Contributing to Ohio Job Loss

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Today a new report from Ohio Hedge Clippers – a coalition of policy, labor and grassroots organizing groups — shows the role billionaire hedge fund managers have played in the loss of thousands of Ohio jobs.

In 2009, in the midst of government bailout talks with the Big Three automakers, hedge funds purchased the outstanding debt of auto parts manufacturer Delphi — currently struggling in bankruptcy — for pennies on the dollar. These “vulture capitalists” (so-called because they prey on firms that are near death, seeking profits by slashing costs) were later able to convert their investment into a controlling share of the company’s stock.

The new controlling faction terminated health insurance for many Delphi retirees and threatened to shut down the company if it didn’t get a piece of the government bailout. The hedge funds held the taxpayers, auto industry, and Delphi workers hostage to its steep, anti-worker demands. According to today’s report:

Singer and the other hedge fund vultures wanted more public subsidies for the company and reductions of its obligations to workers like collective bargaining agreements, union wages, health care, and defined benefit pensions.

Because of their considerable leverage (Delphi is a critical supplier to US automakers), they were able to reject a deal to keep 15 of their 29 US facilities open and unionized. Today, one vulture brags that “virtually none” of the workers in Delphi’s remaining 4 US facilities are unionized; thousands more lost their jobs. Taxpayers ultimately contributed $12.9 billion in bailout funds, including $5.6 billion to assume responsibility for much of the Delphi pension obligations. The company has reincorporated abroad to avoid US taxes.

Former Delphi plant in Dayton, Ohio
Former Delphi plant in Dayton, Ohio

As they took aim at US workers, the hedge funds walked away with a huge profit. After taking the company public in 2011, one fund made $390 million, another $1.3 billion. The biggest payday went to Paulson & Company, whose shares grew by $2.6 billion.

The report warns that many of the same hedge funds are behind the pending merger of Dow and DuPont, which has already led to 10,000 layoffs and promises $3 billion more in “savings.” At risk are the combined 13 Dow and DuPont Ohio facilities and the more 2,000 employees who work there.

Vulture capitalists are increasingly playing an outsized role in politics. Since Citizens United opened the door to nearly unlimited funding for Super PACs, hedge fund managers have dumped billions into efforts to select our next President and Congress.

In fact, 4 of the 5 largest contributors to Fighting for Ohio, one of the two main Super PACs supporting Rob Portman, are hedge fund managers (see table):

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Largest contributions to Fighting For Ohio, a pro-Portman Super PAC

At the top of the list is Robert Mercer of Renaissance Technologies, who in addition to supporting Portman has recently put his considerable wealth fully behind Donald Trump’s presidential bid. And the CEO of Paulson & Company — the largest beneficiary of the Delphi takeover — was recently named by Trump as one of his chief economic advisers.

Why do fund managers spend so much on politics? No doubt they seek to preserve their favorable tax treatment of their investment earnings that subjects them to a tax rate lower than that paid by most working Ohioans. Rules allowing companies like Delphi to move their profits overseas to avoid paying US taxes are also popular with vultures seeking to make a buck.

Trump may talk tough about hedge funds, but they make up a large part of his economic team. And Portman, who has made an issue of the pension mess at Delphi, should look no further than the backers of his Super PAC for an explanation.

Ohio considers workplace protections for pregnant women

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In February, state lawmakers introduced bipartisan legislation that would create important workplace legal protections for Ohio women. Applicable to all workplaces with 5 or more employees, Senate Bill 301 would require employers to provide reasonable accommodations for pregnant and breastfeeding workers to allow them to remain in their jobs. Currently, no such protections exist, so women who may require frequent bathroom breaks, a place to sit or to avoid heavy lifting may today be fired or forced to take leave without pay.

According to the Plain Dealer, more than 1,500 complaints have been filed with the Ohio Civil Rights Commission about workplace discrimination related to pregnancy, making clear that the problem is a genuine threat to women’s (and families’) economic security. As of December, 2015, the National Partnership for Women and Families reported that 16 states, the District of Columbia and four cities have enacted pregnancy nondiscrimination laws.

The primary sponsors of S.B. 301 are Democrat Capri Cafaro and Republican Shannon Jones. In fact, every female member of the Ohio Senate — from both parties — has endorsed the legislation. The bill has been assigned to the Senate Civil Justice committee where it will receive its first hearing today.

Raising Minimum Wage In Cleveland Can Help Nearly 100,000 Working Families

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 COLUMBUS – As the push for a ballot measure to increase the minimum wage in Cleveland begins, Innovation Ohio has taken a closer look at how a wage increase will impact working families and who would benefit.  The findings show that nearly 100,000 workers in Cleveland would benefit from a minimum wage increase to $15. The vast majority—96 percent—of Cleveland workers who would get a raise are 20 or older, and 7 in 10 are over the age of 30.  The report also shows that nearly one in five Cleveland workers who would see wages rise are currently relying on food stamps.

“Now is the time to consider raising the wage in Cleveland because far too many families are working but still struggling to escape poverty,” said Innovation Ohio President Keary McCarthy. “Raising the minimum wage to $15 will increase consumer spending and boost the City’s overall economic activity.”

The analysis found that 44 percent of Cleveland workers who would get a raise earn at least half of their household’s income, and that 33 percent are parents. It also showed that 59 percent of Cleveland workers who would be impacted are women.

“Beyond being a home care provider, I am a mother of four smart, wonderful kids,” said Cleveland resident Artheta Peters, who was interviewed for the report. Peters continued: “I usually work about 56 hours a week and have had to depend on food stamps and other services to make ends meet. Raising the minimum wage to $15 an hour would give my family the stability we need to cover the basic necessities.”

Read the Full Report: How the Fight for $15 Strengthens Cleveland and its Workers.

Innovation Ohio is a policy and advocacy non-profit based in Columbus, Ohio.

FOR IMMEDIATE RELEASE: APRIL 13, 2016
Media Contact: Chase Brown
614-220-0150

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On Equal Pay Day, One Policy Can Help

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Women in Ohio earn just 78 cents, on average, for every dollar their male counterparts take home. To raise awareness of this continuing pay disparity, April 12 has been designated “Equal Pay Day,” a symbolic recognition of the day when the average woman catches up to what the average male earned in 2015. This year on Equal Pay Day, we are highlighting one workplace policy that could help to close the gap between men and women: paid parental leave.

Every year, thousands of Ohioans face the tough choice between earning a paycheck and caring for a new child. The U.S. holds the dubious distinction of being the only industrialized nation where new parents are not guaranteed paid time off after a birth or adoption. And just 13 percent of U.S. workers receive any form of paid family leave through their employers. Unfortunately, the Family and Medical Leave Act of 1993, groundbreaking in its time, only guarantees a job will be there when a worker returns, not a paycheck while they are out. Clearly, twenty-first century policies are necessary to meet the needs of twenty-first century families.

After the birth or adoption of a child, too many new parents, particularly new mothers, are left with several terrible options: go back to work too soon after having a child, lose critical income by taking leave without pay, or exit the workforce temporarily. The choices are worse for low-income women and women of color. Just four percent of low-wage workers — who are more likely to be black or Latino, and for whom the pay gap between women and men is even larger — have access to paid family leave, compared to 22 percent of high wage-earners.

There is a direct connection between paid leave policies and equal pay. Because so few have access to paid leave policies, women in the U.S. are more likely to leave employment after childbirth, reducing their earnings compared to their male counterparts. And women with employment gaps are less likely to be considered for more senior positions which, in turn, further increases pay gaps between them and men in similar positions.

Paid Parental Leave also leads to a more equitable division of labor at home, which can in turn reduce gender pay disparities. Research shows that when even brief periods of paid leave are extended to fathers, men are more likely to be involved in childcare and domestic responsibilities months and years later. Further, when dad takes on some of the responsibility for caring for a new child, it gives mom the opportunity to return to work faster and advance in her career.

Recently introduced Ohio House Bill 511 would establish a paid family leave insurance program allowing up to 12 weeks of leave with pay. If enacted, Ohio would be the fourth state to adopt a statewide policy. The legislation would not only ensure that parents could bond and care for their newborn without giving up a paycheck or their job, but would also allow working Ohioans to address their own or a family member’s serious health condition. HB 511 is a step in the right direction for Ohio families and will create a workplace that is more conducive to family life and begin to reduce the gender pay gap.

For more on the benefits of paid parental leave, read our 2015 report: The Benefits of paid parental leave for women, families, employers and local communities

New Ohio Bill Would Fund Paid Family Leave

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Today, Ohio lawmakers introduced a proposal that would make Ohio just the fourth state to guarantee 12 weeks of paid family leave to workers.

Following a model that has been adopted in California, New Jersey and Rhode Island and was enacted into law this week in New York, the plan creates a statewide insurance pool for workers to take time off with pay to deal with a serious illness, sick family member or to care for a newborn.

Under the plan, introduced by State Representatives Christie Bryant Kuhns and Janine Boyd, workers would pay a small portion of each paycheck into an insurance pool administered by the state. When they have a qualifying event – birth or adoption of a child, or a serious illness of the employee or family member, the employee is reimbursed by the fund for a portion of their weekly paycheck up to $1000.

Top income-earners would receive up to 66 percent of their normal salary, but the program is scaled so that those with the lowest incomes would receive a higher percentage of their normal pay, up to 95 percent (see table 1).

Table 1:

Individual’s Income vs. Average Weekly Wage Benefit (as % of typical paycheck)
20% or less 95%
More than 20% but less than or equal to 30% 90%
More than 30% but less than or equal to 50% 85%
More than 50% 66%

(Average Weekly Wage represents a calculation, performed each year, of the average wages earned by Ohio workers)

The bill expands the universe of workers for whom paid leave is available – currently just 13 percent of U.S. workers – to anyone who works and makes payroll contributions during the year before a qualifying event. Employers forward these paycheck deductions to the state, but are not otherwise be obligated to administer the plan, which instead is handled by the Ohio Department of Job and Family Services. Even independent contractors, who do not work for a single steady employer, would be eligible for paid leave if they opt to pay into the plan.

The legislation brings Ohio workplaces into the twenty-first century, where women and men participate equally in the workforce and traditional family structures are no longer the norm.

Read more from our 2015 report about the benefits of paid parental leave, including better child health, worker retention and productivity and closing the gender pay gap.

The State of the State in Marietta

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As the debate over Ohio’s economic successes or shortcomings continues, a closer look at individual communities can be illuminating. The town of Marietta, the site of the Governor’s sixth State of the State Address, reflects the struggles that many communities across the state continue to face.

While Gov. Kasich’s push to expand Medicaid has helped many in Marietta access care, the median household income lags the statewide average, tax shifting policies strain lower-income residents, and local schools continue to lose valuable state finding.

Our latest analysis takes a closer look at these policies and the impacts on Ohio’s first capital City: Marietta, Ohio. Here are a few of the key points:

  • The median income in Marietta remains nearly $10,000 less than the statewide average, and 25 percent of Marietta residents – and nearly 4 in 10 children – live below the poverty line.
  • The workforce in Marietta has shrunk by 5 percent over the last five years, declining from 6,868 in 2010 to 6,505 today.
  • The bottom 20% of income earners in Marietta have seen state taxes increase as a result of a shift to a more regressive tax code.
  • Medicaid expansion has resulted in over 3,000 Washington County residents gaining access to health care.
  • State funding cuts have resulted in a nearly $1 million annual revenue loss to Marietta, an 11 percent reduction from the city’s 2010 budget.
  • Marietta schools have lost $1.7 million (adjusting for inflation) in state aid since 2010, while local property taxes have increased 22 percent.

Read the analysis: “Governor John Kasich’s Sixth State of the State Address: Marietta, Ohio”.

NEWS RELEASE: ROB PORTMAN’S TRACK RECORD ON TRADE, SUDDEN SHIFT ON TPP

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ANALYSIS TAKES CLOSER LOOK AT PORTMAN’S TRACK RECORD ON TRADE, SUDDEN SHIFT OF POSITION ON TPP

Past support for 14 different trade deals that had no protections against currency manipulation raises questions

COLUMBUS – A new report released today by Innovation Ohio analyzes U.S. Senator Rob Portman’s sudden change of position on the Trans-Pacific Partnership (TPP), his long history of support for trade deals, and the economic impacts of that support on manufacturing jobs in Ohio. Despite current claims of opposition to TPP because it does not include protections against currency manipulation, Mr. Portman has previously supported 14 different past trade-related agreements with no such protections.

“Even though it’s April 1st, Ohioans should not be fooled by Rob Portman’s track record of support for trade deals that ship Ohio jobs overseas,” said Innovation Ohio President Keary McCarthy. “Throughout his long career in Washington, Mr. Portman has supported every trade-related deal that has come across his desk, and none of them included protections against currency manipulation.”

The Trans-Pacific Partnership would rewrite the rules for the sale of goods and services between the U.S. and 12 Pacific Rim nations. Past trade agreements with other North- and Central American countries such as NAFTA and CAFTA have adversely impacted manufacturing-based economies in places like Ohio. The Economic Policy Institute estimates that 323,308 Ohio jobs have been lost as a result of NAFTA and over 106,400 Ohio jobs have been lost as a result of China’s entrance into the World Trade Organization.

Currency manipulation is the practice by which developing countries artificially hold down the value of their currency to gain an unfair trade advantage and sell cheaper goods to more developed countries. China and South Korea are two of the world’s worst currency manipulators. As this analysis will show, Senator Portman previously voted for freer trade relations with both of these countries, and many others, without any protections against currency manipulation.

Tax break could encourage low-paying temporary jobs

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Yesterday, an Ohio House committee heard testimony about legislation (House Bill 343) that would create a new tax break, exempting the purchase of Employment Services (professional staffing firms, including temporary employment agencies) from Ohio’s sales tax. Innovation Ohio offered testimony opposing the bill, which you can find below.

Testimony To House Economic and Workforce Development Committee
Keary McCarthy, CEO and President, Innovation Ohio

Chairwoman and Ranking Member and Members of the Committee.

Employment services, defined broadly as those that locate or find employment for a person or find or locate employees for a position have been subject to Ohio’s sales and use tax since 1993. Employment Services firms supply workers to employers who are looking to fill a staffing need. Employers pay the staffing firm who, in turn, pays the salaries of the workers.

In the past, the services provided by these firms were used to supplement existing staff in periods of temporary worker absence or at times of peak demand. Companies using the services avoid the expense of hiring and training a new employee, a costly venture if the length of time the employee is needed will be short. However, in recent years there has been a trend toward more widespread use of staffing companies to avoid hiring permanent workers. Today, more than 2 percent of the nation’s nonfarm workforce is made up of so-called temporary workers. In Ohio, temporary workers make up 2.5 percent of the workforce, a 50% increase over 2009 levels.

Traditionally, changes in the use of temporary labor has been a relative indicator of the health of the overall economy. Temp workers are often the first to be let go during a downturn, and, in times of economic recovery, firms often hire temp workers before committing to new full-time positions. But that has not proven to be the case in the current recovery from the nation’s recent recession.

Today, even as Ohio’s unemployment rate drops to its pre-recession levels, job gains among temp workers have continued to outpace the growth in permanent positions. In just five quarters, employment in Ohio by temporary agencies rose by 4.3% while Ohio’s overall private sector employment grew by just 1.7%. The Bureau of Labor Statistics forecasts employment by firms in the Employment Services sector to grow by nearly 25 percent over the decade from 2012 to 2022. This compares to total employment growth of 10.7 percent across all sectors of the economy.

And wages paid by Employment Services firms are far lower – while workers in Ohio’s overall economy see average annual wages of $45,482, those working in the temporary sector collect just $30,785.

Staffing companies provide firms with a number of financial benefits, including taking on the responsibility for any workers compensation and unemployment compensation claims, and shielding employers from the need to collectively bargain with this segment of the workforce. Combined, these factors create multiple financial incentives for creating new, long-term positions. Eliminating the sales and use tax on employment services will only continue to promote the growth of temporary rather than permanent hires.

Dayton Announces First-Ever Paid Parental Leave Policy

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Today, Dayton Mayor Nan Whaley announced that City employees will now be eligible for up to six additional weeks of paid time off after the birth or adoption of a new child. This is in addition to existing leave policies that allow employees to use accrued sick or vacation time. As a result of the policy, employees will be able to spend more time caring for and bonding with new family members, time which has been shown to have numerous benefits for child and maternal health, gender equity and the local economy.

Mayor Whaley has recognized what many Fortune 500 CEO’s have realized, which is that establishing a paid parental leave policy is good for women, families, employers and local communities.

With today’s announcement of Dayton’s first-ever paid parental leave policy, the city aligns itself with dozens of thriving private sector companies who have also recently announced similar polices.

This year alone, Nestle, Johnson & Johnson and Goldman Sachs all announced the implementation of some form of paid parental leave. And just this month, Netflix, Adobe and Microsoft all added their names to this list.

These highly successful companies have all provided paid leave for their employees after the birth or adaption of a baby because they know that doing so improves employee retention, job satisfaction, and productivity and helping employers compete for top talent.

Benefits of Paid Parental Leave

In addition to being a good policy for both employers and employees, paid parental leave also has numerous benefits to individuals and communities. As Innovation Ohio outlined in a report earlier this year, the availability of paid parental leave means that low-wage workers are less inclined to drop out of the workforce and on to public assistance.  This not only reduces gender and economic disparities, but it strengthens regional economies.

Paid parental leave can also improve critical health outcomes like immunization and infant mortality.  A review of global data found that increases in access to paid leave was associated with 22 to 25 percent higher rates of immunization for DPT3, Measles and Polio. Studies from 18 of the world’s largest market-based democracies also found that access to paid leave has decreased in deaths in the first month of life by 2.6 percent and in the first year of life of life by 4.1 percent!

We are encouraged that Mayor Whaley and the city of Dayton are leading by example on this important policy. We hope other employers and communities throughout Ohio will follow suit.

Senator Portman Must Reconsider ‘Yes’ Vote on TPP Fast Track

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As the US Senate passes a bill allowing for fast tract authority on the controversial trade deal titled the Trans-Pacific Trade Partnership (TPP), Ohio finds itself, once again, on the brink of possibly damaging economic consequences. The TPP is a free trade agreement between 12 Pacific Rim nations and is said to offer opportunities for economic growth in America and strategic leadership in Asia.

Republicans like Rob Portman hope to force the deal through to the President’s desk this week but have failed to mention its possible harmful ramifications for states like Ohio. Instead, Mr. Portman chooses to focus on campaign donations from pro-trade lobbies. Preceding the May 23rd vote to fast track TPP, Senator Portman claimed almost $120,000 in campaign donations from the US Business Coalition for TPP.

One only need to look back at the consequences of past free trade agreements to realize that the damage that future deals could cause for Ohio and America’s hard working middle class families far supersedes collections of campaign financing.

The North American Free Trade Agreement (NAFTA), for example, played a significant part in the loss of 323,308 manufacturing jobs in Ohio and nearly 5 million manufacturing jobs nationally. Furthermore, private sector manufacturing jobs in Ohio have declined from 23.4 percent to 14.9 percent in the NAFTA era.

Remaining manufacturing jobs and other similar paying positions were subject to trends of wage suppression. A report from the Economic Policy Institute suggests that increased free trade from NAFTA like deals has suppressed the wages of non-college educated workers around $1,800. Free trade has similar effects on small family farms with 12,000 small-scale farms going out of business since NAFTA’s implementation.

Consequences such as these cannot be ignored and our representatives in Washington D.C. must strive to acquire a better deal for middle class Americans.

While we can’t avoid international trade and the modern global economy, representatives like Mr. Portman must work harder to negotiate trade deals that do not crush middle class Americans instead of working to please pro-trade campaign donors. We therefore encourage Mr. Portman to revoke his support for the TPP and consider the ramifications of increased free trade on middle class America.

IO Analysis: The Benefits of Paid Parental Leave

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The United States falls behind the rest of the world in providing workers with guaranteed paid parental leave. Only 13% of U.S. workers enjoy paid family leave benefits, and the number is much lower — 4% — among low-wage workers. Workers without access to paid leave are more likely to leave the workforce, stay out of work far longer, in many case relying on public assistance, costing taxpayers and the local economy all while reducing family economic security.

In Ohio, women make up nearly half of the state’s labor force. Paid parental leave policies are a critical way to keep our workforce and local economy strong. Our latest research looks at the state of paid parental leave and the many benefits it can offer.

Research Highlights

Paid parental leave policies have many benefits for women, families, employers and society as a whole. Among them include:

Strengthens Women and Families
  • The majority of young children depend on the income of working mothers, who are increasingly likely to be sole or primary breadwinners in their families. Paid maternity and paternity leave policies preserve income and increase health outcomes for women and their dependent children.
Reduces Gender and Economic Disparities
  • When taking leave without pay is the only option for a new parent, unmarried, nonwhite and less educated parents are the least likely to make use of this benefit. This relatively low level of leave-taking by less advantaged workers can create health and economic disparities for parents and children.
Improves Critical Health Outcomes
  • Longer leaves that result from the availability of paid time off have been shown to improve the health prospects of women and their babies. Rates of infant mortality, immunization and breastfeeding have all been seen to improve when women have access to paid leave during pregnancy and after childbirth.
Positive Impacts on the Local Economy
  • Paid leave policies for mothers and fathers increase the level of women’s employment and participation in the regional workforce, and contribute to higher levels of employment rates and wages for mothers in the years following childbirth. And by preserving family income, these policies also reduce demand for public assistance and social services.
A Stronger, More Productive Workforce
  • Paid leave policies have numerous benefits for local employers by improving employee retention, job satisfaction, and productivity and helping employers compete for top talent.

Read the report: “IO Analysis – The Benefits of paid parental leave for women, families, employers and local communities“

Minimum Wage Proposal Would Help Ohio Women and Families

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On Thursday, Senator Patty Murray and Rep. Bobby Scott introduced the Raise the Wage Act in Congress. The legislation would raise the federal minimum wage to $12 an hour and eliminate the tipped wage by 2020. The federal minimum wage would increase from $7.25 to $8 in 2016 (still below Ohio’s current minimum wage of $8.10), then by an additional $1 each year until 2020. After that, it would continue to rise as it would be indexed to the nation’s median wage.

The plan would raise the wage for over 1.4 million Ohio workers and add $4.3 billion to the state’s economy over five years. The Economic Policy Institute (EPI) reports that the legislation would result in a pay increase for nearly 29 percent of Ohio’s workforce, including 44 percent of African Americans and nearly a quarter of workers age 55 and older.

The proposal would be particularly meaningful for Ohio’s women and families. According to the EPI analysis, 62 percent of those who would see their wages go up are women. 43 percent of the state’s single moms would get a raise. And under a $12 minimum wage, 23 percent of the children in Ohio would see their family income grow.

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Raising the wage has the additional benefit of reducing reliance on public assistance. The UC Berkeley Labor Center estimates that taxpayers spend nearly $153 billion each year on public support for workers making poverty wages. Over half of fast-food workers or their dependents are enrolled in one of four major public assistance programs.

Download: Economic Policy Institute’s Ohio Minimum Wage Fact Sheet

 

 

Budget Update: Chipping Away

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Anti-worker provisions still remain in the pending state budget (HB 64) following the release of House revisions.  We explain what those provisions mean for the middle-class.

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Chipping Away:

  • Several provisions still in the budget will likely lead to more privatization and reduced working standards for important services like protecting senior citizens from abuse and neglect.  Additional changes also deny some workers’ rights to employees at community-based correctional facilities.

Race to the Bottom:

  • Another provision in the budget would end the long-standing option of Project Labor Agreements (PLAs), which protects taxpayers and strengthens local economies.  
  • PLAs ensure that the terms and conditions of public construction projects are not substandard and the wages are fair.  They also help make sure that the work is done efficiently and effectively by doing such things as preventing strikes and requiring a higher degree of quality control.
  • Ending of this practice would likely reduce wages for working Ohioans and increase the risk of shoddy work on public construction projects.

Why it Matters for the Middle Class:  

  • When workers have fewer opportunities to bargain for the safety and effectiveness of their work, as well as the fairness of their wages, the economy suffers and the middle class shrinks.

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To keep up to date on our budget watch, be sure to sign up for IO’s email list.

Take Action to Support Paid Family Leave

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The U.S. is one of only 3 countries in the world with no legal right to paid time off work for pregnancy, childbirth and infant care.  Only half of U.S. Workers are eligible for time off without pay.  As a result of the lack of a national policy, only 13 percent of workers enjoy any paid family leave benefits through their employers.

Last week, Senator Kirsten Gillibrand introduced the Family and Medical Insurance Leave (FAMILY) Act, an insurance program funded by payroll deductions that would fund paid time off for all workers, regardless of where they work.  Ohio Senator Sherrod Brown has signed on as a cosponsor of S.786, but to date, Senator Rob Portman has not taken a position.

Ohio families shouldn’t have to choose between a paycheck and caring for a loved one.  Sign our petition to tell Senator Portman to sign on as a cosponsor of the FAMILY Act and support Ohio’s working families.

State of the State in Wilmington

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Research Overview

Gov. John Kasich has made Wilmington the site of his fifth State of the State address and has described Wilmington’s story of economic recovery as Ohio’s story of economic recovery.

While unemployment in Wilmington has dropped, it is important to look more closely at the local economic picture and how recent state policies have impacted this quintessential Ohio community.

5-Key-Points

Read the full analysis: A Closer Look at How State Policies are Impacting Wilmington

The Kasich Economy: 4 Facts All Ohioans Need to Know

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As Governor Kasich continues to insist that he and his allies have engineered an ‘Ohio comeback,” there are four facts  all Ohioans need to know.

Fact # 1: Ohio lags the rest of America in job creation.  Governor Kasich often boasts that Ohio has more jobs now than when Governor Strickland was in office. But since virtually every state has more jobs now than it did during the nation’s “Great Recession”, the real question is how Ohio compares to the rest of the country. Ohio not only ranks 41st among all the states in job creation, but has lagged the national average for 20 straight months. And, unlike the rest of America – which has recovered all the jobs lost during the recession and then some, Ohio is still roughly 140,000 jobs short of where we were in 2007 before the national downturn began.

Fact # 2: Virtually all the jobs created under Kasich have been low-wage. Although Kasich promised that his privatized development agency, JobsOhio, would move “at the speed of business” to create good-paying jobs in the economy of tomorrow, virtually none of the jobs created during his administration pay enough to support a family.  An August 20 analysis by Innovation Ohio found that Ohio’s economy now has more people working in low-paying jobs than in occupations that pay medium or high wages. And an August 31 study by the Cleveland-based think tank Policy Matters-Ohio found that in 2013, Ohio’s median wage was just $15.81 per hour, 90 cents below the national median wage.

Fact # 3: Under Kasich, median income has fallen by $9,000 per household.  An August Associated Press analysis found that Ohio’s real (adjusted for inflation) median household income fell from $54,000 in 2007 to $45,000 in 2012 – a far steeper drop than for the nation as a whole. The AP study also found that nearly 50% of Ohio households are now living paycheck-to-paycheck, and 16% of Ohioans have fallen into poverty.

Fact # 4: The benefits from Kasich’s income tax cuts have overwhelmingly gone to the wealthy. Under the three income tax cuts that have taken effect since Kasich assumed office (including the “final installment” of the 2005 income tax cut that Strickland postponed during the Great Recession), the richest 1% has, on average, enjoyed an annual tax cut of $10,000.  Middle-income Ohioans have received less than $100, and the poorest Ohioans have seen a slight tax increase, thanks to the higher sales and property taxes enacted under Gov. Kasich.  This does not include the lower inheritance taxes now paid by the wealthy due to Kasich’s repeal of Ohio’s estate tax. The estate tax applied to only the richest 7% of Ohioans.

For most Ohioans, Governor Kasich’s so-called ‘Ohio Miracle’ has been a mirage. We’re creating fewer jobs than most other states, the ones we’re creating don’t pay a living wage, and the Governor’s income tax cuts have only served to exacerbate the growing gap between the rich and the rest. Surely our state can do better. [Read more…]

News Release: Labor Day Statement from Innovation Ohio President

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For Immediate Release: August 29, 2014
Contact: Dale Butland, 614-783-5833

Labor Day Statement from Innovation Ohio President
Anti-labor policies, tax-shifting trend increases income inequality and threatens Ohio’s middle class, says McCarthy

COLUMBUS – In advance of the Labor Day weekend, Innovation Ohio President Keary McCarthy released the following statement:

“Labor Day is a celebration of the American labor movement and the workers who fought for it. Every year, we honor the contributions of labor unions because they built the greatest middle class the world had ever seen. But every year it also becomes increasingly difficult to think about the middle-class without considering the sobering fact that it’s disappearing. Growing income inequality is one of our nation’s and our state’s biggest challenges.

“Over the last several decades, the wealthiest Ohioans have seen their earnings grow by 70 percent while working- and middle-class families have seen their earnings decrease.  Nationally, as labor union participation has declined over the last fifty years, the gap between the rich and the poor has widened.

“Ohio’s elected leaders must make it a priority to reverse these trends. Stop making it harder for Ohioans to participate in labor unions. Stop the tax-shifting trend that benefits those at the very top at the expense of everyone else. Without pursuing these basic fixes to Ohio’s economy and a policy agenda that puts the middle class first, Ohio’s income inequality will grow and the promise of the American dream will continue to slip away.” [Read more…]

Ohio’s Low-Wage Recovery

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Research Overview

While much has been made of state job gains and reductions in the state’s unemployment rate, Ohio’s economy employs nearly 140,000 workers than it did prior to the 2008 recession. Innovation Ohio sought to explore the jobs that have been created during the state’s recovery and see whether they are comparable to those that were lost.

By reviewing occupational employment data from the Bureau of Labor Statistics from 2007 to 2013, we found that:

  • Prior to the start of the recession in 2007, 33% of Ohioans were employed in occupations that pay, on average, more than $20 per hour, 39% in jobs paying between $13.40 and $19.99, and just 28% in jobs paying $7.00-$13.39 hourly.
  • At the end of 2013, low-wage occupations had jumped to 36% of Ohio employment, while medium-paying jobs fell to 34% and high-wage occupations dropped to 31%.

Digging deeper into the numbers, we found that all the job gains in Ohio have come from low-wage occupations. Employment in high and medium wage occupations declined during the recession and continued to fall as the recovery began. Low wage professions now represent 36% of the state’s employment, up from 28% in 2007.

Read the report.

Read the press release.

Acknowledgements

Heather Madonia, Ph.D. candidate, Northwestern University served as principal researcher in preparing this analysis.

Kasich Recovery Yields Low-Wage Jobs

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For Immediate Release: August 20, 2014
Contact: Dale Butland, 614-783-5833

IO: Kasich Recovery Yields Low-Wage Jobs
Think Tank Study Says High & Medium Wage Jobs Decrease; Newly Created Jobs “Don’t Pay Enough to Support a Family.”

Columbus — Innovation Ohio, a progressive think tank headquartered in Columbus, released a new study today which finds that for the first time since 2007, Ohio now has more low wage jobs than medium or high wage jobs.  Using Occupational Employment data from the U.S. Labor Department’s Bureau of Labor Statistics, the study also found that while 9 out of 10 Ohio jobs lost during the Great Recession paid medium or high wages, low-paying jobs account for virtually all Ohio job growth during the recovery.

Specifically:

  • Prior to the start of the recession in 2007, 33% of Ohio jobs paid more than $20 per hour, 39% paid between $13.40 and $19.99, and just 28% paid $7.00-$13.39 hourly.
  • At the end of 2013, low-wage positions had jumped to 36% of Ohio jobs, while medium-paying jobs fell to 34% and high-wage jobs dropped to 31%.
  • As a share of the state’s economy, high and medium wage jobs dropped from 72% in 2007 to just 64% in 2013.  Low wage jobs grew from 28% to 36% during that period.

Said IO President Keary McCarthy:

“This report makes clear that Gov. Kasich’s handling of Ohio’s economic recovery warrants serious scrutiny. Not only has the recovery from the great recession been slow and inconsistent, but for the first time since 2007 low-wage jobs now comprise the highest share of the job market.”

Added IO Communications Director Dale Butland:

“Last month, Ohio led the nation in job losses.  Ohio’s job creation rate ranks 41st and has lagged the national average for 20 straight months. Unlike the rest of America, Ohio is still 140,000 jobs short of where we were before the recession hit.  And if all this isn’t bad enough, today we learn that the few jobs Gov. Kasich has managed to create don’t pay a living wage or enough to sustain a family. Some miracle. Some recovery. “

Read the report.

Ohio Ranks 32nd Among States in Job Creation

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February employment data for state and local areas was released this morning and reveals that Ohio continues to lag most of the nation in creating new jobs. In February, 5.28 million Ohioans were employed, which is 50,000 more than the 5.23 million Ohioans employed at the same time in 2014. But it represents just 1% annual growth, which ranks Ohio just 32nd among all 50 states for job growth in the past year:

50-state rankings

This is a drop from Ohio’s rank of 27 in last month’s tally of 12-month job growth.

Governor Kasich continues to insist that another income tax cut is what Ohio needs to attract business and create jobs, but the data do not support that. Looking at job growth from February, 2013 to February, 2014, Ohio was outperformed by six of the ten states identified by the conservative Tax Foundation as having the “worst” business tax climates (look no further than high-tax California, which ranked #8 in creating new jobs).

It’s clear that tax rates in Ohio are not the only factor holding us back.

Ohio lost jobs in February, lags the nation in job creation

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Today, February employment data was released that shows the state’s unemployment rate reaching 6.5 percent, its first dip below the national rate since July. The decline suggests job-seekers are leaving the job market, because the number of Ohioans with jobs actually declined.

In February, the number of Ohioans with jobs decreased by 4,600, with large declines reported in construction and local government. Job numbers for January were also revised downward. As a result, Ohio continues to lag the national rate of employment gains since Governor Kasich took office — just 4.3% compared to 5.3% for the US as a whole.

3.21.14 february jobs

New Employment Data Shows Ohio Still Underperforming

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Yesterday, the US Bureau of Labor Statistics released its monthly regional and state employment figures, showing Ohio gaining 16,700 jobs in January and the unemployment rate dropping to 6.9 percent. Also incorporated into the January numbers were revisions to 2013 data to reflect the results of the Bureau’s annual benchmarking process. The revisions are good news for Ohio, showing that 68,000 more Ohioans were working in 2013 than had been previously reported.

So, what can we now conclude about job-creation in the state since the recession? That Ohio’s growth is not as bad as it had looked before – when monthly reports showed Ohio consistently in the bottom five among states in yearly job creation – but not as good as it could be. Ohio falls squarely in the middle of the pack among states in adding jobs, and lags the nation as a whole in both employment gains and in reducing the ranks of the unemployed.

Here is how Ohio’s job growth measures up against the nation as a whole:

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[Read more…]

In October, Ohio’s economy continued to lag rest of nation

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New data released by the Bureau of Labor Statistics (BLS) paints a picture of a continued stall in Ohio’s economy. BLS and Ohio Jobs and Family Services found that not only did Ohio’s unemployment rate tick up to 7.5%, but that compared to October, 2012, in October, Ohio grew jobs by a dismal .53%.  Over the last year, North Dakota led all states by growing 3.53 percent while Ohio ranked 44th – only five other states grew more slowly over the last 12 months.

[dciframe]http://public.tableausoftware.com/views/Oct_JobGrowth/Dashboard1?:embed=y&:display_count=no,600,800,0,auto,align:left;[/dciframe] [Read more…]

Half of Ohio’s House members voted to keep government shut down, default on debts

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Late yesterday, a deal was reached to end the federal government shutdown and avert a financial crisis by providing short-term government funding and an increase of the country’s debt ceiling, allowing the government to make good on its financial obligations.

final vote

Notably, Ohio’s John Boehner, Republican Speaker of the House, brought the plan to the floor and voted for its passage. In voting yes, Boehner was joined by the state’s four Democratic House members and Republicans Joyce, Tiberi and Stivers. Eight of Ohio’s twelve Republican Congressmen, however, voted no, joining with the far-right Ted Cruz-aligned wing of the party.

Eight of Ohio’s twelve Republican Congressmen voted to keep the government shutdown and default on the nation’s debts — despite warnings that doing so would be devastating to the country’s economy.

Both US Senators — Brown and Portman — voted to end the shutdown. [Read more…]

Government Shutdown will have significant impact on Ohio’s economy

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For months, Congressional Republicans have threatened that unless Democrats negotiate over the implementation of the Affordable Care Act, they will not pass a new spending bill to fund the federal government. Last night at mid-night, Republicans followed through on their threats and President Obama was forced to shut down the U.S. government for the first time since 1995.

A shutdown of the federal government will have real effects on the U.S. economy and here in Ohio. The White House estimates that a week-long shutdown will cost the U.S. economy $10 billion but that number could increase the longer the shutdown drags on. According to research released by Congressional Democrats, this shutdown will have significant effects on middle-class families and small businesses here in Ohio.

  • 52,000 federal employees in Ohio will be furloughed. These workers may see reductions in their pay from the time they were forced to stay home because the government was shuttered. This means less money in the pockets of these workers to pay for all sorts of services and goods from businesses in their communities.
  • A shutdown could delay support for a portion of the 186,000 small businesses in Ohio. The federal Small Businesses Association administers small business loans and a shutdown would put a stop to this critical source of business credit for thousands of small businesses in Ohio.
  • In Ohio, over 25,000 people are employed through the Department of Defense as civilian employees and half of them will be furloughed without pay while the rest would continue to work for delayed pay.
  • Checks for current Social Security benefits will continued to be delivered during the shutdown but it is unclear what would happened for new benefits or other services offered to seniors. During the last shutdown 112,000 claims for Social Security and disability were not taken. In Ohio, 2.2 million individuals received Social Security benefits in 2012.
  • During the 1995 shutdown, more than 400,000 veterans saw their disability benefits and pension claims delayed and it is unclear whether this will also happen this time. Currently, Ohio has 877,000 veterans who may experience some sort of delay.

Congressional Republicans’ demands to negotiate over the ACA are irresponsible and reckless and are putting the nation’s economy, and Ohio’s economy, at risk to advance their political agenda. It is time that Republicans in Congress stop threatening the future of Ohio’s middle-class families and pass legislation to fund the government’s operations.

Balanced Budget Amendment Poses Threat to U.S. Economy

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This morning, the House Policy and Legislative Oversight Committee will hear sponsor testimony on House Joint Resolution 7, a resolution calling for a constitutional convention to ratify a balanced budget amendment to the U.S. Constitution. The balanced budget amendment (BBA) requires the federal government to balance its budget yearly, except in cases of “national emergency.”

This amendment, if it were to be ratified, poses series economic harm to the nation by stripping the federal government’s ability to respond appropriately to economic downturns and protect businesses and workers.

At the core of this issue is a fundamental misunderstanding about the federal government’s budget and its relation to the national economy and the states. The amendment is meant to prevent the federal government from spending more than it collects in revenue in a single year. In practice, this is very dangerous. [Read more…]

Ohio’s unemployed rate ticks up, now matches national rate

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US and Ohio UE RatesAs you may have seen in news accounts over the weekend, Ohio’s unemployment rate ticked up in August to 7.3 percent. That is above July’s rate of 7.2 percent and equal to the national rate of 7.3 percent for August.

August marks the first time in almost three years that Ohio’s unemployment matches the national unemployment rate. In November, 2010 the national unemployment rate was 9.8 percent and Ohio’s was 9.4 percent. Since that month, Ohio’s unemployment rate was below the national rate for the next 33 months.

Ohio’s unemployment rate started to creep up in the beginning of 2013. Ohio’s unemployment rate in December, 2012 was 6.7 percent – since then the rate has risen over the course of the last eight months while at the same time the national rate continued to slowly decrease.

As we pointed out on Friday, the Kasich administration and its allies have spent months trying to push the idea that Ohio is experiencing some type of economic miracle – a supposed miracle stemming from their policies of cutting tax rates that mostly benefit the wealthy and slashing funding for public services like local governments and education. In reality, these policies have led to Ohio being ranked 46th in job creation and doing nothing to lower the state’s high unemployment rate. With lawmakers returning to work this week in Columbus, it is time that they consider policies that will offer real change and opportunities for Ohioans still looking to recover from the last economic downturn.

August jobs numbers are, once again, unimpressive for Ohio

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Job growth in Ohio continues to grow at an anemic rate, according to the latest jobs numbers from the Ohio Department of Jobs and Family Services. When comparing August, 2012 to August, 2013 Ohio added 32,500 jobs, for a growth rate of .63 percent. Ohio continues to rank 46th in job growth in the nation- only Oklahoma, Hawaii, Rhode Island, and Alaska performed worse over this last year. North Dakota continues to lead the nation with a 3.02 percent growth rate mostly due to an economy being driving by unique natural resources specific to that state.

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Compared to neighboring state’s Ohio’s economy continues to fall behind. Indiana lead the group with a growth rate of 1.74 percent but Michigan was not far behind by expanding 1.68 percent over the last year. Jobs expanded by a rate of 1.17 percent in Kentucky, .99 percent in West Virginia, and Pennsylvania came in one spot above Ohio with a rate of .68 percent.

What started off as a single episode has now become a trend. For several months it has been clear that Ohio’s economy is barely sputtering along which is a dramatic difference from the economic recovery the Kasich administration inherited. While this administration can continue to insist that there is some type of Ohio miracle happening the reality of the situation is totally different.  Soon, lawmakers will have to realize that their policies of giving tax cuts to the wealthy while cutting funding to schools and local governments is not a path toward economic growth.

Ohio working women fared better than men during the recession

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Last week, the Associated Press examined employment trends since the recession and found that nationally, women have regained the jobs they lost during the Great Recession. Over 68 million women are currently employed, back above the 67.97 million women with jobs before the start of the recession in December, 2007. Men, by contrast, still have 2.1 million jobs to go.

We were intrigued to see if the same trends were evident in Ohio.

As monthly data at the state level does not tally employment by gender, we looked at full year data from 2007, 2009, and 2012; 2007 representing the period before the recession, 2009 representing the peak year of the recession, and 2012 being the most recent available data.

Unlike their national peers, Ohio women (and men) have a long way to go toward employment at pre-recession levels. In 2012, 2.5 million women in Ohio were employed compared to 2.7 million before the downturn. Given the slow growth in job creation displayed this past year, it’s unlikely we’ll return to pre-recession employment levels when data for 2013 becomes available.

[Read more…]

Report finds shale development still not creating many jobs

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Employment figures for shale counties
Employment figures for shale counties – Click to enlarge

The promised employment boom from shale development in eastern Ohio continues to be underwhelming. A new report released this week by the Maxine Goodman Levin College of Urban Affairs at Cleveland State University found that counties where shale development is occurring saw sluggish employment growth through 2012.

The report divided all counties in Ohio into four groups – strong, moderate, weak, and non-shale counties. Each county was placed into one group based on geological data and well activity.  According to the report’s findings, strong shale counties grew at .6 percent in 2012, moderate shale counties at .5 percent, weak shale counties at .6 percent, and non-shale counties at -.4 percent.

The report also examined employment trends for 2013. In the first quarter of this year, employment in strong counties grew by .1 percent and moderate counties saw an increase of .2 percent. All other counties saw some sort of decrease in employment – weak shale counties contracted by -.6 percent and non-shale counties fell by -.4 percent

[Read more…]

Ohio continues to lag nation in job growth

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Ohio’s stagnant job growth continued through July.  According to data released by the U.S. Bureau of Labor Statistics, Ohio ranks 46th in the nation in year-to-year job growth when comparing July, 2012 to July, 2013.

Compared to other states, Ohio’s continues to rank in the bottom five of all states for yearly job growth. On a year-to-year basis, Ohio’s job growth rate was a minuscule .73 percent in July. Only four states –Oklahoma, Pennsylvania, Rhode Island, and Alaska – added jobs at a slower rate during the same time period.


[Read more…]

Ohio job growth has stalled over past 12 months

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News reports around the recently June employment figures have focused on Ohio’s loss of 12,5000 jobs, an Innovation Ohio Education Fund analysis released this morning points to a more disturbing, long-term trend. Over the course of the last year, employment gains have nearly stalled and Ohio has fallen behind nearly every other state in job creation.

Specifically:

  • Ohio ranks 47th nationally in job growth over the last 12 months – only Wyoming, Main, and Alaska performed worse;
  • In the last year, Ohio’s economy only added 16,000 new jobs – a growth rate of only 0.3 percent;
  • Over the past 12 months, Ohio added jobs at just one-seventh the rate it did the year earlier.

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Despite aggressive cheerleading to convince Ohioans otherwise, the data hardly show the “Ohio miracle” that Governor Kasich likes to talk about.

Read the analysis here.

Read the press release.

Data shows Ohio’s job growth stalling

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On Friday, the Ohio Department of Jobs and Family Services released unemployment figures for the month of June. Grabbing headlines was the announcement that Ohio lost 12,500 jobs last month, the second largest decrease in the nation, only behind Tennessee.

What should be concerning to the public and policymakers is that June’s number is another data point in a growing trend of sub-par economic data for Ohio. An analysis of Ohio’s unemployment data shows that from June of 2012 to June of 2013, Ohio only added 16,000 total jobs in the last year, an increase of 0.3 percent, ranking Ohio 47th nationally.

By comparison, Ohio’s twelve month job growth is far below the national average of 1.36 percent and just a tenth of the rate at which Idaho has added jobs over the same period. In fact, only three states — Wyoming, Maine, and Alaska — experienced slower job growth over the last year than Ohio.

[Read more…]

ALEC boosts Ohio’s ranking on its anti-government/anti-tax policy wish list

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5.24.13 ALEC reportThis week, the conservative-leaning American Legislative Exchange Council (ALEC) released its 6th annual Rich States, Poor States: ALEC-Laffer State Economic Competitive Index. According to the report, Ohio’s “competitiveness” ranking went up last year from 37th to 26th. Don’t be surprised to see politicians point to this as evidence that their radical economic policies are working here in Ohio.

The ALEC report is just one of a host of “studies” released each year that attempt to measure which state economies are the most business-friendly. These reports are nothing more than a platform for these groups’ anti-tax/anti-government ideologies and use flimsy analysis that would fail any college 101 statistics class. For instance, the report evaluates Ohio against other states in terms of factors such as its minimum hourly wage, average tax rates and how union-unfriendly its laws are. In reality, these reports — and these factors — have proven to be very poor predictors of how states’ economies will perform in the future.  [Read more…]

Republicans Unleash New Attack on Workers Rights in Ohio

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Public and private-sector unions are targeted by new Ohio legislation.

State Representatives Kristina Roegner (R-Hudson) and Ron Maag (R-Lebanon) today announced their intention to introduce legislation that would make Ohio a so-called “Right to Work” state.

Three bills will be introduced. Two would make it illegal to require an employee to join or pay dues to a union as a condition of employment – one each for the public and private sectors. The third would put the issue on the ballot for voters to decide.

Unions would maintain collective bargaining rights, but membership would be expected to decline sharply as non-union workers would be allowed to benefit from union negotiations without paying dues. As a result, unions would lose strength to negotiate working conditions, wages and benefits.

At an afternoon press conference, Maag and Roegner said the bills had 16 cosponsors.

Roegner suggested offering three separate bills would allow a conversation in which Ohioans would “choose” the best path forward. If all three measures were adopted, however, it would mean labor organizations would have to mount three separate campaigns for their defeat: attempting to defeat the two new laws through a referendum while simultaneously working to defeat a constitutional amendment. [Read more…]

PolitiFact finds Oil and Gas Industry Jobs Claims to be Dubious

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politifactOn Monday, the Cleveland Plain Dealer released a PolitiFact that examined recent ads by the oil and gas industry claiming to have created 40,000 jobs last year in Ohio.  PolitiFact gave the ad its lowest rating — “Pants on Fire” — and strongly questioned the industry’s job creation claims.

PolitiFact found that the ads overstate the number and type of jobs created and failed to disclose that many of these jobs may have gone to out-of-state workers.  In addition, they found the fact that the numbers were based on economic modeling rather than actual surveys of employers undermined the veracity of the claim.

PolitiFact also noted the high rate of turnover in industry hiring data, showing that even if Ohioans are being hired, the work is often temporary in nature. [Read more…]

Study: employment in Ohio shale counties has not increased significantly

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In recent years, politicians, oil and gas lobbyists, and industry experts all promised that expanded oil and gas drilling in Ohio would lead to job creation and economic growth. However, a new report from Cleveland State University shows that even though economic activity increased in shale counties in 2012, employment growth failed to materialize.

A March report from the Maxine Goodman Levin College of Urban Affairs examined two economic indicators to see if there existed any early economic trends in the development of the shale region in Ohio. [Read more…]

Study suggests income tax cuts are a poor tool to spur job growth

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Last week, the Center on Budget and Policy Priorities issued a report entitled “Cutting State Personal Income Taxes Won’t Help Small Businesses Create Jobs and May Harm State Economies.”

As the title suggests, the report offers powerful new evidence that Governor Kasich’s proposal to further reduce Ohio’s personal income tax is a misguided approach to job creation. The author compiles years worth of research studies looking at the connection between income taxes and job creation. Included among the report’s findings:

  • Cutting income taxes to spur economic growth is a zero-sum game. Its authors note that “if a tax cut for households is matched with a commensurate cut in state spending to keep budgets in balance, then state employees or employees of state contractors may lose their jobs or will have less money to spend in local stores.”  In other word, a dollar may enter the economy via businesses through lower taxes, or through employment of public workers engaged in serving the public. But it’s not a new dollar.
  • Business do not choose among states based on tax rates. Tax cut supporters frequently claim that a lower income tax rate will attract “job creators.” According to the analysis, however, there is absolutely no link between income taxes levels and the decisions of people in a state to start a business or to relocate to another state.
  • Motivating businesses is not best achieved through income tax rates. That is in part because, as the report notes, “only about one-seventh of all individual taxpayers are owners of active, small businesses.” Fewer than three percent of all taxpayers report business income and employees.
  • Demand for a business’ product is the primary driver of hiring, not taxes. While innovative start-up firms account for most small business creation, personal income tax cuts are unlikely to benefit many of them because “these firms spend so heavily on new equipment, product development, and marketing that they have relatively little taxable profit in their early years.”

What policies do create jobs and stimulates economic growth, according to the report? Effective, quality government services, especially education and infrastructure, to economic growth. If lawmakers really wants to grow Ohio’s economy, they should stop starving schools and local governments of the resources they need to effective in order to provide another income tax cut that will primarily benefit the wealthy.

Just Where is the New Turnpike Money Going?

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Back in December Gov. John Kasich and ODOT Director Jerry Wray rolled out the results of the KPMG analysis and their plan for “unlocking the value” of the Ohio Turnpike.  As part of their plan, Kasich said that they would leverage Ohio Turnpike tolls to float bonds to finance highway construction projects throughout Ohio.

As part of this announcement, ODOT said, “more than 90 percent of new bond money will go directly to northern Ohio highway projects.”  KPMG, the consultants that Governor Kasich paid to carry out the analysis of turnpike, said  “virtually all Turnpike funds go to Northern Ohio.”

Even prior to the KPMG analysis, Kasich said  “’We’ll make the commitment that at least half the proceeds from a lease or bond would mean we put at least half the money on roads that are north of Route 30. We think that is a fair thing,’”

Sounds like a pretty solid promise to continue to dedicate Turnpike funds to Northern Ohio, right?

Not so fast. [Read more…]

Right To Work – a good way to increase inequality and lower wages

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In mid December, Michigan became the 24th Right to Work state and the second state on Ohio’s border to enact such legislation (Indiana being the other). Michigan’s law was passed under questionable circumstances.  The bill never received a committee hearing or any public discussion, then passed the legislature without a single Democratic vote, and was signed by the Republican Governor immediately.

Since then, certain conservatives in Ohio have come out in support of a right to work initiative here in Ohio but key leaders like Gov. John Kasich have said this would not be the time for such an effort.

Whether there is a movement to put a right to work initiative on the ballot sometime this year, or in 2014, inevitably Ohioans will start hearing about the horrors associated with having unions in Ohio. About how unions kill jobs, force businesses to relocate to other states, and are basically the scourge of the earth. While I at least look forward to systematically taking those arguments apart, today I want to focus on just a single issue: Union membership and income inequality.

On Friday, Kevin Drum with Mother Jones magazine published a piece looking at the rate of union workers in the United States and in Canada and comparing the rate of income inequality in the United States and Canada.

blog_unionization_usa_canada

As you can see in the graph above, union membership in the United States is at an almost all-time low. Only about 11 percent of private sector employees are members of a union while in Canada that number is at over 30 percent and has been since the 1970’s. There are a variety of reasons for why this chart looks this way but the basic reason is that Canadian labor law is much more union-friendly than U.S.  law. It is much easier for employees in Canada to start unions at their place of business while in American the process can be very bureaucratic and slow.

[Read more…]

Republican governors pushing radical tax reforms that could be at Ohio’s doorstep soon

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In Washington, President Obama and Congressional Democrats secured a historic fiscal victory in early January.  By finally passing legislation that asked the wealthiest Americans to pay a little more in taxes, lawmakers moved one step closer to securing our nation’s fiscal health.

At the state level though, Republican Governors from around the country are pushing for tax reforms that would do the exact opposite. These governors want to see income taxes reduced or eliminated while raising other more regressive taxes that harm low- and middle-income taxpayers.  These pieces of legislation are taken straight from the radical conservative playbook in an effort to transfer the burden of paying for public services from the wealthiest to the less well off. The Republican argument is that if a state lowers their income tax rate it will become more competitive in the eye of businesses who may want to relocate there or to help attract high-skilled workers.

For example, according to a recent New York Times article, Kansas Republican Gov. Sam Brownback introduced legislation to phase out the state’s income tax by cutting services and keeping in place what was meant to be a temporary increase in the state’s sales tax. Republican lawmakers in Kansas said that individuals were leaving the state to move to states that do not have income taxes and that this legislation would make them more competitive.

In reality, recent evidence points to the fact that there is no correlation between a state income tax rate and economic growth. What is worse is that these policies are simply another gift to the rich at the expense of low- and middle-income workers.

[Read more…]

Paying for Ohio income tax cut with revenue from gas patch looking sketchy

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wellhead2Oil and gas development in Ohio is once again going to be a major policy issue in 2013 and Gov. John Kasich intends to push for an increased severance tax on horizontal drilling in Ohio to help pay for a $500 million income tax cut.

While it’s true that the oil and gas industry is growing in Ohio at this time, is it possible that the administration is being overly optimistic in its projection of how many producing wells there will be in the near future? Proper forecasting of wells and production estimates are essential because the production from these new oil and gas wells will pay for Kasich’s income tax cut.  That’s why Innovation Ohio was interested in seeing how close the Kasich administration well estimates were to reality in 2012.

[Read more…]

Kasich appointees kill game-changing solar project and 600 jobs

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2013.01.14 pucoThe Turning Point Solar Project truly tells a 21st century, new Ohio economy story.  It would be the largest solar project East of the Mississippi and is being built on reclaimed coal strip mine land.  It’s a fantastic partnership of one of the nation’s largest utilities, working with a solar manufacturer who chose to locate in Ohio because of the project.  In return, the solar manufacturer, committed to hire 60 percent of their workforce from returning Ohio veterans.

This project has been underway for over two years. The manufacturing plant in Napoleon is ready to expand and hire more workers.  The companies involved were ready to hire the workforce and construct one of the largest solar projects in the world in Southeast Ohio, a region of our state that could certainly use a shot in the arm.

The project has it all, except for political leadership.

Yesterday, in a 3-1 vote, Kasich appointees to the state’s Public Utilities Commission denied the project.  The three commissioners who voted against the project have little to no experience in the public utilities sector.

On the other hand, the experienced PUCO staff recommended the project be granted approval, and did so with vigor.

In addition, the only PUCO commissioner with extensive experience in electric regulatory law supported approving the project.

The bottom line: American Electric Power did the right thing—they created a game-changing project for Ohio, which the PUCO staff said was needed for AEP to be in compliance with Ohio laws.  The project could create over 600 new Ohio jobs and would have given our state a positive spotlight we so deserve.

So why isn’t Governor John Kasich outraged that his appointees rejected a job creating project?

Kasich’s spokesperson says that they don’t want to get involved in the decisions of an independent commission.  That’s odd, because they already have.  Kasich admitted making calls when the American Electric Power rate case was going to negatively impact Ohioans.  At his request, the PUCO rescinded the case.  So why would he not inject himself in a decision that has over 600 jobs on the line, supports Ohio manufacturing, helps a utility meet their needs and makes Ohio more competitive?

There is some speculation that Kasich remained mum on this one due to one of his largest campaign contributors, First Energy, coming out against the project. We can only hope that Kasich doesn’t stay silent forever and shows some of the “finance” and job creating skills he’s so fond of telling Ohioans has in spades.

If this is the end for Turning Point Solar, Ohioans have one man to blame – and that’s the governor who could (have?) done something.

Failure to extend the payroll tax cut will shrink Ohio paychecks and slow economic growth

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In all recent coverage of the fiscal cliff at IO, our sister organization, IO Ed Fund and elsewhere, one important detail has gotten relatively little notice. President Obama’s proposal to Congressional Republicans includes a one-year extension of the payroll tax cut enacted in 2010. Without an extension, payroll taxes will go up at year end, meaning workers will see less in paychecks starting in January.

The proposal is good news for the economy and for working Ohioans who will take home — and most likely spend — $525 more on average as a result. According to the Center on Budget and Policy Priorities, below is the impact of the tax cut on various professions:

With no extension, lawmakers will place a significant burden on an economy struggling to grow. Today, Moody’s Analytics released its outlook of the U.S. economy for 2013 and noted that one of the major headwinds that the economy could face is the expiration of the payroll tax cut. Moody’s estimates that allowing the tax cut to expire will cause the economy to shrink by .6 percent in 2013.

As the Center for Budget and Policy Priorities wrote last week, over 150 million workers — including 5.7 million in Ohio — will see some benefit if the payroll tax cut is extended. Those estimates are based on 2010 and 2011 employment numbers, so the number in 2013 is likely even larger.

Because the president’s proposal makes the tax cut temporary, an extension won’t add to budget deficits permanently. Compared to extending the Bush tax cuts for high-income taxpayers which could add $1 trillion to the debt over ten years — and not offer much in the form of economic stimulus –extending this tax cut is a relative bargain.

Extending the payroll tax cut is an important policy that will get more money into the hands of Ohioans to help stimulate the economy in 2013 and is a policy that both sides should support.

 

Why Ohio Should Be Wary of So-Called “Right to Work” Laws

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Today’s big story is the move by a lame duck Michigan legislature to rush through so-called “right to work” (SCRTW) legislation, barring public and private sector unions from requiring members to pay dues. The move is expected to undermine the influence of unions over time as contracts expire and membership declines.

Yesterday, Gov. Kasich indicated that SCRTW is “not a priority” in Ohio. But that was what Michigan Governor Rick Snyder said earlier this year. He changed his tune quickly in the face of corporate money and a dwindling GOP majority. The result is a rushed bill passed and signed before a new legislature takes office next month.

Regardless of Kasich’s claims of disinterest, Ohioans should be wary of future attempts to bring SCRTW to Ohio.

Studies have investigated the claims of SCRTW supporters, looking at states that have adopted these policies and found they are not good for workers or a state’s economic health.

In a definitive analysis on the subject, researchers at the Economic Policy Institute looked at a state’s SCRTW status, controlling for other factors such as cost of living, demographics, educational levels, industry composition and found that, compared to non-SCRTW states, wages were lower and employers were less likely to offer paid benefits like healthcare and pensions.

A 50-state review by political economist Gordon Lafer found that there was no correlation between states with SCRTW laws and unemployment rates, per capita income or overall job growth. In fact, when it was published in September 2011, seven of the 10 highest-unemployment states had SCRTW laws.

These findings confirm — so-called “right to work” laws would be more appropriately named “right to work for less,” as wages and benefits are lower and economic growth is unchanged in states with these laws on the books.

Report: Why Tax Rates Must Go Up for the Wealthy

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The Innovation Ohio Education Fund has released a report detailing why the best public policy for the overwhelming majority of Ohioans is to raise federal income tax rates on the top two percent of earners, while preserving the Bush tax cuts for the middle class and lower incomes.

To read the entire report, watch videos explaining some of the issues and to see a chart detailing where 73% of the Bush tax cuts have gone thus far, head on over to our fiscal cliff page.

 

Here’s the press release from IO Ed Fund:

[Read more…]

Governor Kasich should demand a “Hire Ohio” policy for fracking

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In a press conference on Wednesday, Governor Kasich announced his surprise at recent reports that fracking developers in Ohio are not hiring Ohio workers and are, instead, bringing them in from out-of-state. The Governor seemed genuinely shocked and went so far as to say that these reports are an, “extremely serious matter.”

While job estimates vary widely, fracking still has the potential to create thousands of jobs in Ohio. The Governor is therefore justified in his concern if companies are indeed passing over Ohioans to bring in out of state workers. Oil and gas companies are expected to make tremendous profit from leveraging Ohio’s resources, and working Ohioans should share in the expansion. As the Governor put it:

You could have a situation where we are not getting the jobs, they [oil and gas developers] are taking the resources, and all their profits and they are heading home.

Nearly a year ago, Innovation Ohio warned the policy makers about this prospect. We urged Governor Kasich and lawmakers to introduce “Hire Ohio” incentives that could create financial incentives such as reduced tax rates for companies meeting a goal of hiring a specific percentage of their workforce from Ohio. While there are a variety of policy approaches to achieve this goal, Ohio failed to exercised its considerable leverage when Ohio’s fracking oversight laws were modified earlier this year. The Governor included no Hire Ohio policy in the bill, and when presented with an amendment to require 50 percent of workers to be residents of Ohio, GOP lawmakers set the measure aside.

It’s unclear whether Kasich’s recent comments are a precursor to action or if he was merely grandstanding in his ongoing fight with the industry over severance taxes. But if the Governor is seriously concerned about the prospects of Ohio workers, we recommend that he ask the legislature to immediately pass Hire Ohio legislation that creates incentives for companies seeking to extract Ohio’s natural resources to do it with a labor force made up largely of Ohioans.

Romney, Kasich Lie About Auto Rescue

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News Release

For Immediate Release: October 10, 2012
Contact: Dale Butland, 614-783-5833

ROMNEY, KASICH LIE ABOUT AUTO RESCUE
IO; Auto Czar Rattner Say Jobs & China Claims are “Cynical Deceptions”

COLUMBUS — Steven Rattner joined Innovation Ohio today at a Columbus news conference to “blow the whistle on the Romney campaign’s cynical attempt to mislead Ohio voters about the auto rescue.” Rattner was Lead Advisor to President Obama during the 2009 rescue of the auto industry. Innovation Ohio is a progressive think tank headquartered in Columbus.

Rattner and IO cited numerous instances in which the Romney campaign and its GOP allies – including Ohio Gov. John Kasich – have attempted to mislead Ohio voters, including:

  • At an October 25 campaign rally in Defiance, Romney claimed that “Jeep is thinking of moving all production to China.” The company emphatically denied the charge the same day, saying “Jeep has no intention of shifting production out of North America” and criticizing Romney’s claim in unusually blunt language as “a leap that would be difficult even for circus acrobats” and lamenting “unnecessary fantasies and extravagant comments.” In fact, Jeep intends to restart production in China by hiring additional workers, not moving U.S. jobs there. It’s akin to Honda or Toyota opening plants here to build cars for the American market.
  • Despite the company’s rebuke, on October 27 the Romney campaign began airing a television ad misleadingly saying that “Obama … sold Chrysler to Italians who are going to build Jeeps in China.” The ad also contains three additional distortions:
    • It states that Obama “took the auto companies through bankruptcy” — conveniently omitting that was Romney’s plan as well;
    • It says that the conservative-leaning Detroit News “endorsed Romney” — conveniently omitting that the endorsement criticized his position on the auto rescue, while praising Obama’s “extraordinary leadership” on the issue.
    • It states that Romney has a “plan to help the auto industry” — when neither he nor his campaign has ever announced or spelled out such a plan.
    • As a result, the ad has been rated false by numerous media fact-checkers, including the Tampa Tribune’s “Politifact” which rated it “Pants On Fire.”
  • On October 28, in an appearance on NBC’s “Meet the Press”, Gov. Kasich that Ohio is only “up a total of 400 auto jobs when you count the companies and suppliers.” In fact, Innovation Ohio has shown that the industry has created over 17,300 Ohio jobs since the rescue. And according to the Kasich Administration’s own Department of Development, 34% of private investment in 2011 – including 11 of 29 investments over $50 million — were in the auto industry. These deals accounted for 18% of all private sector job announcements reported by the Department.
  • On October 30, the Romney campaign tripled down on its deceit with a radio ad which not only repeats the debunked claim about Chrysler shipping American jobs to China, but claims that GM is planning to do so too. The ad also falsely blames President Obama for GM “cutting 15,000 American jobs.” In truth, these losses occurred prior to the President’s rescue plan in the summer of 2009. Since then, more than 152,000 American auto jobs have been created.

In the final Presidential debate and since, Gov. Romney implied that he actually favored using federal money to save the auto industry. In fact, he opposed both the essential “bridge loans” provided by President G.W. Bush and the long-term funding provided by President Obama. He would only consider federal guarantees of private sector financing following a bankruptcy proceeding. But there would have been nothing to “guarantee” because the auto companies were out of cash, private sector financing was not available, and without the funding provided by President Obama, the companies would never have come out of bankruptcy. Instead, they would have ceased paying suppliers, laid off their employees, closed their doors and liquidated.

Said Innovation Ohio President Janetta King:

“President Obama took an enormous risk when he bet on Ohio and Ohio workers. But the President’s bet paid off — and now over 17,000 Ohioans are back at work in the auto industry and Ohio’s unemployment rate is lower than it’s been since 2008. But if Romney, Kasich and Mandel had their way, Ohio wouldn’t have an auto industry today.”

Added IO communications director Dale Butland:

“It was bad enough when Mitt Romney turned his back on Ohio workers by opposing the auto rescue and saying ‘Let Detroit Go Bankrupt.’ But now he’s adding insult to injury by distorting what happened and running false and misleading television and radio ads. Equally shameful is that Gov. Kasich is assisting Mr. Romney in that deception. Trying to win an election is one thing. Trying to win it this way is something else again. If Gov. Romney will lie to Ohioans about auto jobs, maybe we should ask what else he’s been lying about.”

Materials distributed at IO’s press conference can be found here.

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Is JobsOhio gathering jobs or empty promises?

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Somebody in Columbus has some ‘splainin to do when it comes to Ohio jobs, JobsOhio and the Kasich Administration’s real development record.

First, there’s this thorny issue of talking down the Ohio economy in order to benefit Gov. John Kasich’s candidate, Mitt Romney. Kasich and Co. know like most of the rest of us just how important Ohio’s auto industry is to our state economy. Yet he continues to tell anyone who will listen that the industry is down 500 jobs when asked about President Barack Obama’s auto rescue. We have shown that over 17,000 jobs have been created in Ohio’s auto industry since mid-2009 – when the rescue package was in full effect. The president’s policy was needed and it’s been effective.

Next there’s the issue of JobsOhio. The concept – privatizing much of the Ohio Dept. of Development’s activities – was rolled out in Kasich’s first months as governor to much fanfare. The Silicon Valley wunderkind who was brought in to make it all happen is already gone and the quasi-private corporation – JobsOhio – created by Kasich has been locked in a legal limbo since nearly day one of its creation. Yet, Kasich, ever the salesman, tells Ohioans that JobsOhio is turning the state into the land of milk and honey.

As we demonstrated this time last year, much of the JobsOhio record – as described by the governor – is dubious. What Columbus is currently calling jobs created or retained are often simply commitments from companies who may or may not ever follow through on what they tell the state. The latest case in point is Diebold, Inc.

[Read more…]

The numbers are the numbers …

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Quick Friday note on today’s good news that the unemployment rate in the U.S. is below 8 percent for the first time in quite awhile. According to the New York Times:

The unemployment rate fell because more people were working, not because discouraged job seekers stopped looking, the numbers showed.

Adding to the positive news, job gains were revised upward by 40,000 for July (to 181,000) and by 46,000 for August (to 142,000), casting a slightly rosier light on what had been perceived as a summer slump.

Then there’s this according to former General Electric CEO Jack Welch:

[Read more…]

Kasich vastly understating Ohio’s auto recovery

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This morning, Governor Kasich appeared on Marketplace radio to talk about the Presidential race and tonight’s debate.

When asked whether the success of the President’s auto recovery efforts could hurt his challenger in Ohio, Kasich threw out some very curious — very wrong — numbers about the success of the recovery in the state. He actually claimed that the industry has lost 500 jobs in Ohio. Listen:

Kasich on auto jobs

The Governor is wrong. [Read more…]

It’s time to pull the plug on the failed JobsOhio experiment

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Today, the latest development in the slow-motion train wreck that is JobsOhio was the sudden departure of its architect and Chief Investment Officer, Mark Kvamme.

Kvamme throws in the towel after a stinging rebuke from the Ohio Supreme Court, which last week refused to sign off on the legality of the approach Kvamme and Governor Kasich had proposed to fund JobsOhio. Because of lingering questions about the constitutionality of transferring control of the state’s future liquor profits, the bond market has been unwilling to provide the $1.4 billion in start-up funds that JobsOhio and Kvamme were counting on to use to attract business and create jobs. [Read more…]

Report: The Real Cost of the Romney-Ryan Plan to Ohioans

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Research Overview

Behind dramatically different economic visions and a deluge of attack ads, this election comes down to numbers. Many Ohioans—and many families across the United States—are asking what this will mean at the kitchen table. What will be the cost of a second term of President Barack Obama and Vice President Joe Biden or a first term led by former Massachusetts Governor Mitt Romney and his running mate, Rep. Paul Ryan (R-WI)? The answer is that, in concrete and quantifiable ways, a Romney-Ryan presidency would mean higher taxes for the middle class, out-of-pocket health expenses for current seniors, fewer college loans and fewer health care options for young people, and the re-introduction of corporate outsourcing tax loopholes that have sent so many manufacturing jobs overseas.

The nonprofit organizations Innovation Ohio and the Center for American Progress Action Fund examined the economic and tax agenda of Gov. Romney and Rep. Ryan, taking a close look at how their policies would affect the way Ohioans live and work. The price tag includes:

  • Middle-class Ohioans would pay more in taxes while millionaires pay less. Millionaires in the state would receive an additional $87,000 in tax breaks under the tax plans of Gov. Romney and Rep. Ryan while middle-class families would pay $1,900 more in health care taxes and $1,066 more in taxes on their mortgages.
  • Jobs would decline across Ohio. Gov. Romney and Rep. Ryan plan to provide extra tax incentives for corporations to outsource jobs and are pushing policy proposals to cripple the clean energy industry, jeopardizing 125,000 jobs across the state.
  • Drastic cuts to federal spending would shrink Ohio’s middle class. The state stands to lose more than $106 billion in federal funding from 2013 through 2022, an average of more than $10 billion a year, from cuts to schools, law enforcement, highway repairs, job-training programs and more. These cuts would fall predominantly on middle-class and low-income families, especially cuts to education programs that would result in nearly $100 million in reduced federal support for education in the state in 2013 and 2014 alone.
  • Seniors in Ohio would lose health care benefits and pay more. Gov. Romney and Rep. Ryan would force seniors in the state to pay at least $660 more for their prescription drugs each year.

Read the Report Here

Find out How Much More the Romney-Ryan Medicare Plan Would Cost You

 

At least 12,500 Ohio auto jobs created since the recovery

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Research Overview 

Today we released a white paper showing that at least 12,500 Ohio jobs were created by President Obama’s auto rescue plan and that hundreds more now seem likely.

In recent nationally broadcast television interviews on CNN and NBC’s Meet the Press, Gov. Kasich has downplayed the importance of auto jobs to the Ohio economy, claiming that the auto rescue plan was responsible for only “1,800 direct jobs” and that only 700 of the 73.300 jobs Ohio has added since January 2011 were automotive jobs. [Read more…]

Underreported: Kasich rejects efforts to hire more Ohio firms

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In the recent flurry of legislation passed by the Ohio General Assembly, little noticed was an intriguing public policy statement by the Kasich administration.

The Ohio Senate inserted a provision into HB487, the state’s mid-biennium budget legislation, aimed at ensuring the State was spending taxpayer money on Ohio companies whenever possible.

On June 11, Governor Kasich vetoed the measure.

The language in question (read here & here) required State agencies to gather information from out-of-state vendors about the share of its workforce and suppliers on a state contract that are based in Ohio. It further asked agencies to follow up with Ohio firms to see why they didn’t pursue state work before inking a deal with a non-Ohio firm.

As justification for his veto, Kasich claimed the measure was burdensome and would drive up the State’s cost of purchasing. However, the nonpartisan Legislative Services Commission disagreed, stating in their analysis that the increased cost to agencies would be  “negligible.”

Legislators, frustrated by continued failures by state agencies to spend state tax dollars to employ Ohioans, not only amended the budget bill, but spoke up at the June 11 meeting of the Controlling Board–the same day as Kasich’s veto–chastising administration officials for not trying harder to “Buy Ohio”:

Sen. Chris Widener (R-Springfield) said at a Controlling Board meeting that Senate Republicans on the panel will be more reluctant to support contracts with non-Ohio firms in the future, saying the use of Ohio-based businesses is a key way to improve the state’s economy.

While he recognized two agencies – the Department of Public Safety and the Department of Youth Services – for using more Ohio firms, he said other departments seem to be reluctant to focus on in-state firms.

“Lawmaker Pushes Agency Officials For More Use Of Ohio-Based Firms,” Gongwer Report, June 11, 2012

And it’s no wonder the administration doesn’t like legislative attempts to encourage in-state purchasing. At the same June 11 meeting, the majority of contracts state agencies asked Controlling Board to approve–21 of 39–involved an out of state firm.

Transparency lacking in JobsOhio in quarterly report

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Wall Street obsesses over their in-depth quarterly reports, but in reporting its quarterly results last month, the newly-created privatatized economic development arm of the State–JobsOhio–decided to only publish a five row chart.

In 2011, JobsOhio took over responsibility from the Department of Development for wooing companies to Ohio and awarding incentives for investments that create and retain Ohio jobs. At the time, fears were expressed by opponents that this privatized agency would not have to publicly report its use of state money with private business to create and retain jobs.  Those worries were proven true with this last report by JobsOhio.

In a previous blog post we were able to calculate how much JobsOhio was spending per created or retained job.  This new report, however, misleads the public by only giving a number for capital investments committed, but not how much of that was actually taxpayer money.  Neither the chart nor the accompanying nine sentence press release published by JobsOhio provides the information needed to do the types of calculations necessary to measure the effectiveness of the new organization.  Ohioans deserve to know how much the state is spending to create and retain jobs.

President and Interim Chief Investment Officer Mark Kvamme said he was “pleased with the quarterly results,” and that “these numbers represent the first business quarter where [JobsOhio] had full sign-off rights on projects.”  However, as shown in the chart, these numbers aren’t that different from the first and second quarter when the Department of Development was still leading.  The number of deals made in this quarter has only increased by three since JobsOhio took full control and the numbers of jobs created and retained has remained mostly stagnant.  Ohio Legislators should insist on more clarity from JobsOhio so that we can stay informed on how state money is spent.

Study confirms fracking jobs may not go to Ohioans

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The Ohio Shale Coalition—energy interests working with the Ohio Chamber of Commerce—issued a report this week on the economic potential of Ohio’s imminent shale boom. The report forecasts employment as a result of oil and gas drilling activities will reach 65,680 in 2014.

Previous employment forecasts have put that number anywhere from 20,000 to 200,000. Whatever the exact number, it is clear that shale drilling offers an opportunity to improve the employment picture in Ohio communities hard hit by the recession.

With that in mind, we reviewed the report to learn whether its authors saw hope for Ohio job-seekers. However, as we predicted in our report, the report foresees a significant reliance on out of state companies and workers as drilling gets underway here. From page 31 of the report:

“It was assumed that as more specialized labor becomes trained and available in Ohio, there would be a gradual increase in the  percentage of Ohio-based workers employed by the oil and gas producers and service companies.”

The authors appear to agree with Innovation Ohio, that without a proactive state policy to encourage companies to hire Ohioans, transient workers will continue to fill the parking lots of Ohio oil and gas wells with out of state license plates for years to come.

Furthermore, the report identifies another complicating factor for out-of-work Ohioans seeking employment on the shale wells:

“Both neighboring states (PA/WV) have a large trained labor force ready and able to respond to the needs of oil and gas production in Ohio  – a workforce that will be mobile and perhaps faced with a dramatic decrease of activity in the Marcellus with the recent drop in dry gas prices.”

In other words, thanks to declining natural gas prices, drilling activity may shift from the Marcellus shale to the more liquids- and oil-rich Utica shale in Ohio. Experienced workers can can easily migrate from just across the border to compete with Ohioans to chase these new opportunities. Workers from neighboring states offer little to Ohio in terms of economic benefit, as noted on p. 31:

“Daily expenditures of workers from non-Ohio companies for time spent in Ohio to conduct services for drilling and completion of wells were also not included because most of that labor will be from out of state and their pay and most of their personal expenditures will remain out of state.”

The result will be slow job growth and tax revenue as the benefits are exported back to neighboring states.

The bottom line is there is no guarantee that these specialized jobs, either in drilling itself, or in the ancillary white collar legal and professional supporting industries, will go to Ohioans. The most likely job gains for Ohioans will come from local service providers as a result of what is termed the “induced effect,” new employees in unrelated businesses like restaurants and hotels. Those gains are forecast to take off in 2013, but that will be largely dependent on how much of that money actually stays here.

Innovation Ohio recommends that state policymakers institute a “Hire Ohio” policy, providing incentives, such as a break on severance taxes, to oil and gas companies that hire Ohio workers. Since releasing our report a month ago, no indication has come from the Kasich administration or General Assembly of how they will improve the prospect of Ohio job-seekers seeking to participate in the shale boom.

Kasich flip-flops on fracking “foreigners” and supports rental price hikes?

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If you follow Governor Kasich on Twitter, you may have seen this rather positive-sounding headline he shared:

What has the Governor so excited? The article in question, “Shale credited for housing market uptick” (Warren Tribune Chronicle, February 12, 2012), highlights an increase in the price of rental housing near Carroll County fracking wells. The reason? So many out-of-state workers are arriving in the area to work on the oil and gas wells, that hotels are full and workers armed with company-funded housing allowances are now driving up the prices of rentals.

”We have had an increased number of calls from companies and individuals coming in to work in the area,” he said. ”The greatest demand is for rental properties, but a lot of them are looking for month-to-month leases.”

While this is great news for landlords, it’s terrible if you are a local resident searching for affordable housing. This is actually something we warned about in our report, “Fairness, Fracking and the Future,” citing the experiences of Pennsylvania, itself the site of a recent shale boom:

The increased demand for housing has driven up rent in rural areas, which, in turn, has displaced many long-time residents. Areas that saw few homeless people have experienced a sudden increase in family homelessness and in families doubling or tripling up in their living quarters.

Does Kasich’s enthusiastic tweet mean that he now supports the use of imported labor on the fracking wells? In public, the Governor repeatedly decries the use of “foreigners” (workers from West Virginia, Pennsylvania and elsewhere) for this work. But this housing boom he is now promoting is a direct result of workers arriving from outside the area for temporary work. In our report, we propose a “Hire Ohio” policy, in which the state creates incentives to companies that hire and/or train Ohio workers. Other than ranting against “foreigners,” we have not yet seen a proposal from the Governor on how Ohio can stem the tide of out of state workers.

We’ve said that Ohio policymakers have to do the hard work of ensuring that Ohio communities and residents benefit from the shale boom and not simply act as cheerleaders for the industry from the sidelines. So far, we are not encouraged.

Report: Fairness, Fracking and the Future

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Ohio’s oil and gas resources have caught the attention of drillers, investors and political leaders alike. Thanks to a process known as hydraulic fracturing (“fracking”), substantial reserves of oil and gas trapped deep under the surface can be extracted and brought to market, with a potential value of hundreds of billions of dollars.

Though a shale boom potentially could bring tens of thousands of jobs to Ohio, environmental concerns have raised doubts about whether fracking and its associated processes are safe. However, environmental issues are not the primary focus of our report. Because creating jobs will do little good if we poison our people and destroy our state, we believe it is self-evident that fracking should be halted if threats to public health and safety cannot be resolved. But if fracking does go forward, we believe that the economic benefits should be shared fairly with ALL Ohioans, not transferred out of state or allowed to flow down a one-way street in the direction of Big Oil.

In our report, “Fracking, Fairness and the Future,” we call on Governor Kasich and state lawmakers to ensure that Ohio workers, landowners and taxpayers receive a fair share and a fair shake if the state decides to allow expanded drilling for oil and gas.

Our recommendations include: charging industry a reasonable severance tax and sharing the revenue with local governments hit hard by budget cuts and poised to deal with the local impacts of increased drilling; establishing a landowner’s bill of rights; and creating a “Hire Ohio” policy to ensure new jobs go primarily to the Ohioans who need them.

Read the executive summary.

Read the report.

Read the press release.

Visit our map of fracking locations in Ohio.

Visit our fracking resources page.

 

IO Says Ohioans Should Get “Fair Share” Of Fracking Benefits

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For Immediate Release:  February 2, 2012
Contact: Dale Butland, 614-783-5833

IO Says Ohioans Should Get “Fair Share” Of Fracking Benefits
Think Tank Proposes “Windfall Profits Tax” on Oil and Gas Companies, “Hire Ohio” Policy and “Landowner Bill of Rights”

 

Columbus: Innovation Ohio, a progressive think tank headquartered in Columbus, today released a major report entitled “Fracking, Fairness and the Future” which calls on Gov. Kasich and state lawmakers to ensure that Ohio workers, landowners and taxpayers receive “a fair share and a fair shake” if the state decides to allow expanded drilling for gas and oil via a controversial technique known as hydraulic fracturing, or “fracking.”  Click here to read the report.

Though a “shale boom” potentially could bring tens of thousands of jobs to Ohio, environmental concerns, including a series of earthquakes near Youngstown, have raised doubts about whether fracking and its associated processes (including waste water disposal) are safe.  While the state investigates, Gov. Kasich reportedly intends to highlight the economic benefits of fracking during his February 7 “State of the State” address in Steubenville.

Environmental issues are not the primary focus of this report. Because “creating jobs will do little good if we poison our people and destroy our state,” IO believes it is self-evident that fracking should be halted if threats to public health and safety cannot be resolved.

But if fracking does go forward, IO believes “the economic benefits should be shared fairly with ALL Ohioans, not transferred out of state or allowed to flow down a one-way street in the direction of Big Oil.”

Among the report’s key findings are:

  • After analyzing oil and gas reserve estimates from both industry sources and the Ohio Department of Natural Resources, IO projects that an all-out shale boom could mean $86 billion in natural gas revenue for the developers over the next 20 years. There also is estimated to be between $130 billion and $550 billion worth of oil in Ohio’s shale and an unspecified amount of additional value in natural gas liquids. Yet Ohio currently has the second lowest oil and gas severance tax in the nation and levies no tax at all on the extraction of valuable natural gas liquids.
  • Though oil and gas companies are already signing hundreds, if not thousands, of mineral rights leases with Ohio farmers and landowners, the New York Times and other publications have found that such purchases in other states have resulted in unsuspecting landowners being taken advantage of by unscrupulous companies and “landmen.”
  • While the centerpiece of the industry’s effort to sell fracking is the promise of tens of thousands of new jobs, there is currently no guarantee that these jobs will go to Ohioans.  Indeed, anecdotal reports from areas where wells are already operating indicate that jobs often go to “experienced” workers from states like Texas and Louisiana.

Accordingly, the IO report makes three major policy proposals:

1)     A “Landowner Bill of Rights,” enforced by the Ohio Attorney General, to ensure Ohioans selling mineral rights are not cheated, kept in the dark about what chemicals or other hazardous materials will be used on their property, or left with polluted drinking water, despoiled acreage or unrepaired damages to access roads and other property.

2)    A reasonable “Windfall Profits Tax”on oil and gas companies. Raising Ohio’s oil and gas severance tax rates to those of Texas (7.5% on natural gas and 4.6% on oil and natural gas liquids), would raise nearly $2.5 billion from the extraction of natural gas over 10 years and could result in additional tax collections of $5.9 to $25.3 billion on the oil believed to be trapped in Ohio’s shale. Moreover, our proposal applies Ohio’s severance tax to natural gas liquids such as propane and butane, ensuring that Ohioans capture a portion of the value of all materials now attracting the attention of drillers. In addition to covering the increased regulatory and infrastructure costs associated with fracking, this revenue could be used to replace some of the money school districts and local governments lost to state budget cuts.  Such “taxpayer relief” would help keep many teachers and public safety workers on the job and off the unemployment rolls.

3)    A “Hire Ohio” policy designed to ensure that Ohio fracking jobs go mostly to Ohioans, rather than workers from other states.  Such a policy might entail a tax break for companies hiring a specified percentage of Ohioans, or incentives for companies that establish their own training programs and then employ Ohio workers who graduate.  Ohioans need jobs NOW and companies should be encouraged to hire them on the front end of a fracking operation, not months or years after a project has begun.

Said IO Communications Director Dale Butland:

“If fracking goes forward in this state, ALL Ohioans should benefit.  After all, these natural resources belong to us, not the oil companies.  The companies are certainly entitled to a fair profit for extracting it.  But regular Ohioans also deserve a fair share and a fair shake, and it’s up to our elected officials to make sure we get it.”

(Note: the IO website additionally now features a “Fracking Resources” page containing links to all source materials cited in this Report, other relevant websites, and an exclusive, interactive Ohio map showing all fracking site locations.  The page will be updated periodically and can be accessed at www.innovationohio.org/fracking)

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December jobs report: declining employment and labor force participation

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The Ohio Department of Job and Family Services today released Ohio’s unemployment numbers for December. Ohio’s unemployment rate dropped from 8.5% to 8.1%, due to a decrease in the number of unemployed workers from 496,000 in November to 469,000 in December.

However an unfortunate trend continues as the number of workers who are actually participating in the workforce continues to drop.  The civilian labor force—a number that represents both those currently working and those looking for work—dropped by 21,000 in November. This is the second straight month of extreme drops in the size of Ohio’s labor force. This trend is alarming as it indicates that Ohio citizens are no longer looking for employment. These citizens may have decided to stay home rather than look for employment or have taken an early retirement.

In addition to the decline in the overall labor force, fewer Ohioans were employed in December than the previous month. Ohio’s nonfarm wage and salary employment decreased by 3,300 over the month. Professional and business services saw the largest decrease, with a loss of 4,700 jobs.  Construction and goods-producing industries also saw large decreases, with a decrease of 2,600 and 2,100 jobs respectively. Government, educational and health services all saw job gains for the month.

$400 million for Sears? Ohioans deserve to see the ROI

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Even as he and his administration cut billions from Ohio schools and local governments, Gov. Kasich seems to think Ohio is a bottomless well when it comes to doling out tax breaks and other “incentives” to corporations. Indeed, tax incentives often seem to be the biggest part of the Kasich “economic development” strategy.

But according to the Governor, taxpayers have nothing to worry about: he and his JobsOhio team know what they’re doing. No incentive is proffered unless it will bring Ohio a positive “return on investment”, or ROI, as the experts call it.

Of course, they won’t share with the rest of us what their actual calculations are on any given deal. Nor, for that matter, will they tell us what their ROI formula is or how they calculate it. They claim “proprietary information” and all that. They tell Ohioans we should simply trust them not to waste taxpayer money and just have faith that the ROI will be positive.

And so it was in the wake of news reports that the Kasich team had offered Sears $400 million worth of “incentives” to move its corporate headquarters from Chicago to Ohio. Ultimately, Sears opted to stay put. But that didn’t stop our Corporate Cheerleader in Chief from bragging about his bold offer. “We got really close,” he said this week, “and that gets everbody’s attention.”
Yes, it did.

But what’s also gotten everyone’s attention is yesterday’s announcement by Sears Holding Co. that it will soon shutter up to 120 Sears and K-Mart retail stores nationwide. A drop in “holiday sales” is part of the reason–but so is the fact that sales were down over 5% in the 8 weeks leading up to Christmas. On-line sales have so hurt Sears that shares of the company have plunged nearly 50% in the last year.

To the layman, of course, all this makes Kasich’s $400 million offer to Sears look a little, well, suspect.

But we’re sure the Governor, Mr. Kvamme, and the rest of the JobsOhio team know something that we (and Wall Street) don’t.

And to prove it, how about they break precedent–just this once–and tell us what the ROI was for the proposed Sears deal? Or, at least, how they calculated that ROI. It would make a lot of skeptical Ohioans breathe easier.

Boehner’s Tea Party Cave-In Will Cost Ohioans Millions

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Ohio Congressman and Speaker of the House John Boehner got rolled by his Tea Party freshmen again this week, but it’s Ohio working families who are getting hit upside the head.

Unless Congress acts to extend the payroll tax cut championed by President Obama, payroll taxes go up on January 1.  This year for Christmas, the average middle class Ohioan will find a $1,000 tax increase in their stockings, courtesy of House Republicans.

Last week the Senate acted to extend the tax cut, along with an extension of unemployment compensation for 58,800 jobless Ohioans, by a lopsided and bipartisan margin of 89-10.  At the time, Boehner pronounced it a “good deal” and promised to get the Republican votes necessary to pass it in the House and send it to the President for his signature.

Enter the Tea Party. By Sunday, Boehner’s guarantee had collapsed, the victim of another revolt by the extremists who control the Speaker’s Republican House majority. On Tuesday, the House rejected the Senate-passed Obama plan —and left middle class Ohioans holding the bag.

Without the extension of the payroll tax cut 4.6 million Ohioans will see their taxes go up.  Apart from the hardship this will pose for Ohioans who are currently working, experts like Macroeconomic Advisers say allowing the tax cut to lapse will slow economic (GDP) growth by half a point and cost an additional 400,000 jobs.  Letting unemployment benefits expire will mean untold misery for those already out of work, and cost an additional 200,000 jobs as decreased spending ripples throughout the economy.

Somehow, Boehner and his Tea Party House members never fail or falter when it comes to passing tax cuts for millionaires and billionaires. But when the issue is extending unemployment compensation and payroll tax cuts for the middle class, they bob, weave, and make excuse after excuse for why it can’t be done.

Ohioans should call, write, and e-mail Speaker Boehner and let him know what you think of his latest failure.  Tell him it’s time to end the obstructionism.  Tell him you’re sick of help-the-rich-and-forget-the-rest politics.  And tell him that if he can’t control his Tea Party caucus, the voters will be happy to do it for him in the next election.

November Jobs Numbers

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The Ohio Department of Job and Family Services released Ohio’s unemployment numbers for November. These numbers held some good news for Ohio, unemployment has decreased from 9.0% to 8.5%, but a deeper analysis of the numbers reveals a disturbing trend.   This decrease in unemployment is attributable to 30,000 fewer people listed as unemployed.  However, only 6000 jobs were created. The difference between the jobs created and the individuals who are unemployed, 24,000, means that these 24,000 people have likely exhausted their unemployment benefits and are no longer counted as unemployed or as part of the labor market. Many of these people may have stopped looking for employment and some may have left the state in search of employment. This is the second month in a row that Ohio has seen this phenomenon.

JobsOhio delivers less bang for the taxpayer buck

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Governor Kasich made a personal appearance at Monday’s meeting of the Ohio Tax Credit Authority to tout a record-breaking achievement: 30 deals approved at a single meeting. We wondered: how does the current pace of tax credit-based deal-making compare to the efforts of the Ohio Department of Development prior to the creation of JobsOhio?

What we found was that, aside from the increased number of deals approved this month, the Kasich administration’s other primary claim to fame is that they have greatly increased the amount that was spent on tax incentives — issuing over $301 million in corporate tax breaks for first eleven months of calendar year 2011, compared to $155 to 213 million for the three previous calendar years, according to the state’s Tax Incentives Reporting database.

What did the administration get for that additional spending? It turns out, JobsOhio delivers a lot less bang for the buck than the Department of Development acting alone. Looking at the first 11 months of 2011 for which data is available (and eliminating the double-counting of jobs for which multiple types of tax credits were awarded to a single employer), the awards approved by the Tax Credit Authority so far in 2011 have valued each job created or retained at $6,112 each. This compares to an average tax credit of $4,721 per job over the three previous calendar years. In other words, thanks to JobsOhio, taxpayers are now subsidizing employers to the tune of an additional $1,400 per job.

While the number of deals approved at a single meeting may be interesting numerically, it’s not what we should be measuring. Instead, we need to ask what we are getting for the dollars spent. Or, as Governor Kasich is so fond of saying, what is the Return on Investment? Looking at a simple measure of how many dollars are spent per job, it would appear that JobsOhio has not yet delivered on its promise of improving the return on the taxpayer’s investment.

[Read more…]

Fact Check: JobsOhio’s dubious jobs claims

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Recently we’ve noticed Governor Kasich talking about how his administration, through the newly-privatized JobsOhio development corporation, has created or retained 44,000 jobs in its efforts to lure or retain employers in Ohio.

The governor said that over 44,000 jobs have been created this year, helping to improve the states economic picture. – Ohio News Network, November 17, 2011

and two weeks earlier:

He said his nonprofit Jobs Ohio economic development program has “been involved in 174 projects to either bring them to Ohio, stay or expand here.”

[…] The economic development work has saved 25,245 jobs and brought in more than 12,000 new jobs, he said. – Ravenna Record-Courier, November 2, 2011

These claims are highly misleading, and here’s why: [Read more…]

October Job Numbers Show Little Change

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The Ohio Department of Jobs and Family Services released Ohio’s unemployment numbers for October. Unemployment decreased from 9.1% to 9.0%, putting Ohio in line with the national average. Since the passage of Governor Kasich’s Budget, Ohio has seen rates that are above or even with the national unemployment rate.  This trend continues for October.

While the number of unemployed workers in Ohio decreased slightly, and the population of working age Ohioans increased slightly, there was no increase in the number of employed Ohioans.  This could mean that workers are simply leaving the workforce and are no longer seeking employment.

Additionally Ohio’s non-agriculture wage and salary employment decreased by 600. The most significant losses occurred in government, with a loss of 4000 jobs and professional and business services with a loss of 3800 jobs.  Financial activities also experienced a loss of 800 jobs.  Increases were seen in manufacturing, with a gain of 1100 jobs, and trade, transportation and utilities, with an increase in 2700 jobs.

September Jobs Numbers Show 21,600 Jobs Lost

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According to numbers released by the Ohio Department of Job and Family Services, Ohio’s nonfarm employment decreased by 21,600 over the month.  After several months of small increases, this is a significant drop and is the largest drop in total nonfarm employment since the passage of Governor Kasich’s “Jobs Budget.”   While total employment declined, the unemployment rate remained unchanged at 9.1%.

The sectors experiencing the largest decline in jobs were goods producing industries, driven by manufacturing, with a loss of 4700 jobs. Service producing industries also saw a significant decrease with a loss of 17,000 over the month.  This loss of 17,000 jobs includes education and health services and government sectors.

August Employment Report

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According to numbers released today by the Ohio Department of Job and Family Services, the number of working Ohioans actually dropped by 700 in the first full month since the passage of the “Jobs Budget.” Total Employment in the state now measures 5,116,500, down from 5,117,200 in July. During the same time period, Ohio’s total labor market (comprised of the ranks of working Ohioans and those actively searching for work) has shrunk by 3,600 people.

Following 22 straight months without an increase, in August Ohio experienced its third consecutive month of rising unemployment, as the state’s jobless rate crept up from 9.0 to 9.1%, matching the U.S. rate. Normally one of the first states to experience a recession and the last to recover, Ohio has actually seen better rates of unemployment for most of this year than the U.S. as a whole. August breaks with this trend, as the depicted in the chart below:

Other items of note:

  • The number of unemployed Ohioans rose 6,900 to 535,600, according to figures from the federal Bureau of Labor Statistics
  • The total labor market in Ohio continues the nosedive began in April. Since March, 39,000 Ohioans have left the workforce.
  • The sector experiencing the largest decline in employment was professional and business services, losing 2,500 jobs, followed by manufacturing, which shrunk by 1,600 positions.
  • Sectors seeing the greatest net increases in jobs include “other services” (+3,200), educational and health care services (+2,300) and construction (+900).

Local Communities’ Public Safety impacted by ‘Jobs Budget’

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During the budget debate, Innovation Ohio noted that extreme cuts to local governments would not only result in the loss of an estimated 51,052 direct jobs of teachers, professors, fire fighters, police officers and other public servants, but would also result in the reduction of services offered by local communities.  Unfortunately this prediction is proving to be all too true.  As local governments are working to balance their budgets, one option they are faced with is laying off police and fire fighters, potentially jeopardizing public safety in the process.

These predictions are ringing true in local communities. Lancaster, in Fairfield County, will be forced to lay off 31 city workers. Largely due to cuts from the state level, and a decrease in income tax returns, the city faces a $1.25 million shortfall in 2011 and a $2.5 million shortfall in 2012. In order to address this shortfall, the mayor has placed a .25% income tax increase on November ballot and has proposed eliminating 20 firefighters and eliminating 6 police officers, in addition to several other positions in the city.

These cuts will reduce fire protection staffing levels to 1980 levels, with the closing of one fire station and the reduction of the number of medics on shift from three to two. Citizens are worried that this will increase response times and fear that it could put residents in dangerous situations.

Lancaster is not alone in their struggles, as this trend is evident throughout the state. Mount Sterling, a village in Madison County, has been forced to eliminate its entire police force. Although patrols will be increased on some shifts by the Madison County Sheriff’s office, this will mean deputies have to travel longer distances with longer response times as a result. Residents and long time business owners are concerned. One business owner, Jay Rapp said, “I’m scared. How long will the response be?  Instead of just 30 seconds it could be 30, 20, 15 minutes.”

Franklin County expects to lose $30 million in state aid from its general fund budget. As the county considers how to absorb these cuts, Sheriff Scott has relayed concerns that a 10% cut in funding could result in the elimination of 143 sheriff deputies. Such a cut would increase wait times, limit the types of prisoners the jail would take, and result in only one deputy for every five or six judges.

Commenting on the Lancaster layoffs, Sue Cave, with the Ohio Municipal League noted “This is the beginning, all of the cuts that came as a result of the state budget will hit the hardest starting Jan. 1. I think we are going to see more of this.”

July Unemployment Numbers

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The Ohio Department of Job and Family Services released Ohio’s unemployment numbers for July. After a long period of unemployment declines and early signs of a recovery, and despite a slight decrease in that national unemployment rate, Ohio saw an increase in unemployment of 2 tenths of a percent, increasing from 8.8% to 9%. This is the second month in a row in which Ohio’s unemployment rate has risen, following 22 straight months without an increase.

This increase in unemployment adds 12,000 more workers to Ohio’s unemployment rolls.

The sector experiencing the largest decline in employment was leisure and hospitality, with a decrease of 6500. Continuing with the trends from June, and likely due to major budget cuts to local government in Governor Kasich’s budget, local governments saw a decrease of 4700 jobs.  Additionally health and educational services experienced a decrease of 2900 jobs.

Other items of note:

  • The number of unemployed workers increased from to 529,000 from 517,000 in June.
  • Overall Non-agriculture Wage and Salary Employment saw an increase of 6,500 jobs over the month. This small increase is not enough to keep pace with the number of people searching for jobs.
  • Local Government saw a decrease of 4700 jobs.
  • The manufacturing sector saw an increase of 7900 jobs. The auto industry continues to be a bright spot, with major announcements from Chrysler.
  • May’s reported non-agriculture wage and salary employment increase of 12,000 jobs has been revised to reflect an increase of only 3000 jobs.
  • June’s reported non-agriculture wage and salary employment increase of 10,600 jobs has been revised to reflect and increase of 10,900 jobs.
  • The US unemployment rate decreased from 9.2% in June to 9.1% in July

More fallout from the “Jobs Budget”

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Today we learned that 251 more positions will be eliminated as a result of the administration’s “Jobs Budget” and privatization of economic development.

The administration released its plan to restructure the Ohio Department of Development as a precursor to outsourcing economic development to JobsOhio, a newly formed private corporation. As part of the transition, the staffing at the Department will be reduced by 211 positions. The plan calls for the elimination of positions in the Office of Appalachia, overseas and regional offices, the outsourcing of a variety of functions and migration of other activities to JobsOhio.

Meanwhile, news reports indicate that the Ohio Consumers Counsel, the designated legal advocate for Ohioans in matters related to regulated utilities, has fired 40 of its 82-person staff as a result of cuts in the Kasich budget. It is worth noting that cuts to the Consumers Counsel were not necessitated by the State’s general revenue shortfall, as the agency is independently funded. Instead, it appears to be ideologically driven, coming on the heels of direct lobbying of the Governor by his close friends who were employed by natural gas companies criticized by the Consumers Counsel for marketing practices and pricing.

Kasich proposes use for Third Frontier funds, and it’s not what you voted for

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While Innovation Ohio is still examining the details of Governor Kasich’s Jobs Ohio plan, one detail immediately caught our attention.

The Dispatch recently reported that the Kasich administrative officials indicated that part of JobsOhio’s strategy will be to work closely with regional partners throughout the state, with funds for this partnership to come from a pool of $24 million from the Third Frontier Commission.  While Innovation Ohio agrees that having a regional presence throughout the state is important and something that should be included in any economic development strategy, we question the earmarking of Third Frontier Funds for this purpose.

Not only are taxpayer funds yet again being used for a supposedly ‘private’ enterprise, this use is simply not the intended purpose of these funds.  The ballot language approved by voters in May 2010 specifically stated that “independent oversight” would be required of research and development projects, and that State agencies that are awarded funding from these funds would “obtain independent reviews of and recommendations as to the merits of the proposed research and development project.”

While this type of earmarking has been tried in the past, members of legislature and the Third Frontier Commission adamantly defended the intended purpose and oversight of the funds. Now Secretary of the State, Jon Husted, in particular, defended the integrity of the process saying, “I do not support the continued short-circuiting of the competitive process the legislature created to disperse the Third Frontier Funds.”  The Plain Dealer noted that these funds “shouldn’t be a political honey pot,” and such a move ”defies the will of the voters,” who supported “investing state money on promising high-tech projects, not on politicians’ efforts to score points with certain constituencies.”

It is our hope that past defenders of the Third Frontier and members of the legislature will help remind Governor Kasich of the importance of an independent review process, with independent experts, for the use of these funds.  Will the legislature uphold the will of the voters and maintain the competitive process for the use of Third Frontier Funds?  Or will they allow Governor Kasich to have yet another ‘honey pot’?

Manufacturing facility to close in Coshocton, eliminating 55 jobs

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Hidden on a state website, news emerged this week that Ansell Occupational Healthcare, maker of industrial gloves and protective gear, will be terminating manufacturing at its Coschocton plant later in 2011, eliminating 55 jobs. In addition to ceasing production, the company made no promises about other jobs at the site, stating only that “certain non-manufacturing functions will likely continue at the Coschocton Plant” which boasts a workforce of 350, “for a period of time.” The facility has been operating in Coschocton since 1934.

No reason was given in the filing for the move other than that the company had “reviewed its operations and made the decision to close the manufacturing operation,” but the company has a track record of shipping U.S. jobs and equipment overseas. In 2001, the company announced a wave of job cuts, including 235 at its 50-year -old manufacturing facility in Massilon, moving production to Mexico and sending equipment to a factory in Asia. At the time, the company was called out in Rubber & Plastics News for the audacity of having its employees, whose livelihoods depended on the plant, dismantle the equipment and prepare it for shipment to Asia. Later that same year, the company moved its global R&D from Coshocton and Massilon to Malaysia.

As recently as 2009, the company informed shareholders that its strategy is to continue to “rationalize its manufacturing sites” to “move production to lower cost sites”.

No word yet on whether Governor Kasich’s Jobs Czar and outsourcing champion Mark Kvamme attempted to work with the company to convince it to stay.

“Jobs Budget” to cost Ohio more jobs

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Across the nation conservative Governors and their extreme agenda are taking a toll on states’ fragile recovery.  Dayton Daily News outlines this in a recent article, noting that as state and local governments react to budget cuts that were enacted in many states, including Ohio, large layoffs are expected. An IHS Global Insights report, forecasts the loss of 110,000 government jobs nationwide in the third quarter and notes that this would be the “first time more than 100,000 government jobs were cut in a single quarter.”

One Ohio government worker noted the personal toll that these layoffs are having:

“After a 15-year career working for the state, I never expected this,’’ said Davis, 43, who was laid off from his job as a police officer for the Montgomery Developmental Center, a Huber Heights care facility for the mentally disabled. “I left a job in Columbus working for the Department of Developmental Disabilities to be closer to my family. Now, me and my family are devastated.”

With such large cuts to state and local government the economy is going to have difficulty in creating jobs.  One has to ask John Kasich, where are the jobs?

Read the whole article here: New round of layoffs threaten economic growth

“It’s either public safety cuts or 639 others.”

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The impacts of Kasich’s budget continues to be felt by cities and towns as they struggle to deal with deep cuts and are faced with deciding where to make cuts to their budgets.  What is becoming clear is that Kasich’s budget will jeopardize the public safety of our communities.

Noting that potential layoffs are due mainly to cuts at the state level, the city of Cincinnati is faced with the decision to eliminate police officers and firefighters, surely impacting public safety, or cut 639 jobs of clerks, engineers and sanitation workers.  This number is nearly half of all non-public safety personnel employed by the city. Cuts to either area will certainly impact the services the city offers to its residents and result in more citizens in the unemployment lines.

Read the article here: Dohoney: It’s either public safety cuts or 639 others

Who said anything about Right to Work? Kasich bashes Ohio workers on his latest failed attempt to draw a company to Ohio

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What has recently been rumored was finally announced by Governor Kasich last week at the Columbus Metropolitan Club: Calisolar, a manufacturer of components for the solar energy industry, is not locating to Mansfield, Ohio after all and is not bringing its 800+ jobs to Mansfield.  As reported in the Mansfield New Journal, Governor Kasich said in his speech “Calisolar’s going to Mississippi, right to work, did you know that? Eight hundred jobs in Mansfield. Forget it, we’re not interested.”

It is troubling that Governor Kasich’s first response in attempting to explain why he was unable to land Calisolar is to blame Ohio’s workers, a statement clearly contradicted in that same Mansfield News Journal article by others close to the negotiations .  Maybe Calisolar’s choosing of Mississippi has more to do with the Governor’s lack of commitment to a comprehensive energy strategy or that he has been singularly focused on natural gas (specifically Utica Shale) at the expense of all other energy sources.  Whatever it may be, there is no evidence that Calisolar’s decision had anything do with workers’ rights to organize, and it’s disingenuous of the governor to say as much.

Read the article here: Gov. John Kasich says Calisolar moving to Mississippi, cites economic climate

Ohioan to head efforts to restore U.S. auto industry

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Innovation Ohio would like to extend our best wishes to Youngstown Mayor Jay Williams as he prepares to mark his last day in office on Monday before taking on an exciting and critical new role. Williams has been selected to become the new executive director of the Department of Labor’s Office of Recovery for Auto Communities and Workers, otherwise known as the “auto czar.”

Williams’ appointment, announced earlier this month, was applauded by Senator Sherrod Brown, who called it “a loss for Youngstown, but a win for the auto sector and the nearly 800,000 Ohio workers whose jobs are tied to this critical industry.” Brown has been a key advocate for federal intervention in the industry.

Since 2009, thanks to intervention by President Obama, both GM and Chrysler have emerged from bankruptcy, recaptured market share, returned to profitability and have even begun to expand. GM recently announced a $204M investment in its Toledo facility in the production of its new 8-speed fuel-efficient transmission. Meanwhile, Chrysler has repaid its outstanding loans to the U.S. Treasury, six years early. And at Lordstown, where prior to the rescue effort, 1,000 jobs were at risk, has now added a third shift and employs nearly 5,000 workers.

In all, it is estimated that 164,654 jobs in Ohio would have been lost if it were not for the auto rescue. We applaud Mayor Williams on his commitment to support the preservation and economic health of Ohio communities and workers dependent on the American automotive industry.

State prison system announces largest mass layoff of 2011

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On Friday, it was learned that in the wake of state budget cuts and in anticipation of the Governor’s plan to privatize five prisons, the Ohio Department of Rehabilitation and Correction plans to eliminate 1,135 jobs by the end of the year. In all, approximately 950 workers will lose their jobs, including hundreds of prison guards, nurses, teachers, administrative staff, and even five chaplains. Some of these workers will be able to reapply for their jobs with the private prison operators, but continued employment is far from guaranteed.

The cuts are needed, officials say, to make up for a $188 million reduction in state funding over the biennium. Rather than use the proceeds gained from selling the prisons to private companies, estimated to net $200 million for the state, that money was instead used as a one-time source of funds to prop up the state budget.

By federal law, private employers who plan to terminate 50 or more workers are required to notify the state, who tracks these mass layoff events on its website. The state’s action to reduce the ranks of prison guards, parole officers and other personnel represents the largest mass layoff in the state of Ohio so far in 2011.

As we predicted in April, cuts in the current state budget could have the effect of putting up to 51,000 Ohioans out of work.

Toledo Air Cargo hub to close, eliminate 700 jobs

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Toledo air cargo carrier DB Schenker announced on Friday that it is closing its Ohio air cargo hub, a move that will result in the loss of over 700 jobs. The company blamed the move on the poor economy, prompting flashbacks to a similar announcement by air cargo carrier DHL in late 2008 to cease its Ohio operations.

The DHL move did not go unnoticed by Governor Kasich when he was a candidate for office. In his first campaign commercial, shot at the shuttered air cargo facility, Kasich sympathized with displaced workers, speaking of the job loss this way:

“It’s not a statistic, it’s people.”
[Read more…]

Ohio’s Unemployment Increases: Kasich’s ‘Jobs Budget’ Killing Jobs

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The Ohio Department of Job and Family Services released Ohio’s unemployment numbers for June today. These numbers show the earliest impacts of Governor Kasich’s policy agenda, including his recently passed budget.

The unemployment rate was 8.8 percent in June, an increase from 8.6 percent in May. This is the first time that the unemployment rate has increased since August of 2009, breaking a 22-month streak of unemployment holding steady or decreasing.

The industry with the most significant job losses from the previous month was government, with local governments seeing the biggest losses of 8900 jobs. This likely reflects the first impact of Governor Kasich’s “Jobs Budget,” which contained severe cuts to local governments. Unfortunately as IO warned earlier this year, we are now well on our way to an anticipated loss of 51,000 jobs as a result of Kasich’s budget.

Other items of note from the ODJFS release are as follows:

  • The number of workers unemployed in Ohio in June increased to 517,000, up from 508,000 in May.
  • Ohio saw an increase in nonfarm wage and salary employment, with an increase of 10,600 over the month, from the revised 5,095,000 in May to 5,105,600 in June. This includes an increase of 10,900 jobs in the leisure and hospitality industry, an industry that traditionally sees increases in the summer months.
  • Local governments saw a loss of 8,900 jobs.
  • The manufacturing sector saw a loss of 3,000 jobs.
  • The construction industry saw an increase of 2,800 jobs, likely due to summer construction.
  • The U.S. unemployment rate for June was 9.2 percent, up from 9.1 percent in May.

This data is seasonally adjusted.

You can download a copy of this report here.

News Release: Is Moelis in Bed with Penn National?

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For Immediate Release: July 13, 2011

Contact: Dale Butland, 614-783-5833

INNOVATION OHIO:
IS MOELIS IN BED WITH PENN NATIONAL?

Columbus—Innovation Ohio, a progressive think tank headquartered in Columbus, said today that it has uncovered a “potentially troubling linkage” between Penn National Gaming and Moelis & Company, the New York-based consulting firm that earned a reported $13 million to help Gov. John Kasich strike a deal with Ohio’s casino and race track owners.

Innovation Ohio’s discovery comes on the heels of a July 9 column by Brent Larkin of the Cleveland Plain Dealer who called Moelis’ $13 million fee “astonishing”, “preposterous” and “an unprecedented gift” which is “deserving of more scrutiny.”  .

Innovation Ohio said that in 2009-10, Moelis had a consulting contract with Fontainebleau Las Vegas, LLC to help that firm sell an uncompleted and bankrupt hotel and casino project. The contract, which paid Moelis at least $750,000 in consulting fees, contained “a curious provision—Section 3 (A) (ii)—specifying that if Penn National bought the Fontainebleau property, Moelis would receive an additional fee totaling 3% of the transaction value.  If anyone other than Penn National bought the property, Moelis’ would receive 1% of the transaction value.  Either payment would be in addition to Moelis’ consulting fee.”  Read the contract here.

In addition, Innovation Ohio said “it is our understanding that the Kasich administration has either stonewalled or rejected outright public records requests for information relating to the administration’s decision to retain the Moelis firm for Ohio’s own negotiations with Penn National and Rock  Ventures.”

Said Innovation Ohio Communications Director Dale Butland:

“Since Ohio taxpayers are giving Moelis $13 million, they deserve some answers.

What, exactly, is Moelis’ past and current relationship with Penn National?

Why was Penn National singled out in Moelis’ contract with Fontainebleau Las Vegas?

Why would Moelis receive a bonus of 3% of the transaction value if Penn National purchased the Fontainebleau property? Or 1% of the purchase price if Penn National didn’t buy it?  Why would Fontainebleau—or Moelis—care about Penn National’s involvement?

Since Penn National was one of the gaming firms with whom Gov. Kasich would be negotiating, did Moelis ever disclose its previous and/or current relationship with Penn National prior to being retained by the state?

If so, why didn’t the Kasich administration publicly disclose that information?  If not, why not?

There may well be satisfactory answers to all of these questions.  But since Ohio is paying  Moelis $13 million for consulting efforts characterized by the Plain Dealer’s Mr. Larkin  as “work that a bright, well-prepared fifth-grader could have performed as a homework assignment”, it is entirely reasonable to insist that answers be forthcoming.”

Kasich’s “Jobs Budget” continues to cost people their jobs.

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The Office of Consumers’ Counsel (OCC), which represents residential utility customers, has announced that budget cuts have already forced the agency to lay off 30 employees, according to the Columbus Dispatch.

Ohio’s new state budget calls for spending $5.6 million on the OCC in the fiscal year that began July 1 and $4.1 million the following year. Those amounts are down from $8.5 million each year of the previous budget.

Gov. Kasich used a projected deficit to justify many budget cuts, but the Consumers’ Counsel does not affect the deficit since it is funded by fees that utilities pay.

A spokesman for the OCC predicted the deep cuts would lead to higher utility bills because the agency will lack the resources needed to battle the politically potent, well-financed utilities.

Higher rates could hurt Ohio’s business climate. A 2010 study by Deloitte, lists “energy costs and policies” among the top drivers of global manufacturing competitiveness. Today, energy costs in Ohio are about 10 percent below the national average.

When the Kasich budget debuted, spokesman Rob Nichols said the cut was necessary because the agency  duplicates services provided by the Public Utilities Commission of Ohio – a justification The Plain Dealer of Cleveland said, “reflects a fundamental lack of knowledge about utility regulation in Ohio that Kasich’s team had better correct, forthwith. ‘’

The PUCO has a reputation for being too deferential to utilities. Earlier this year, the PUCO rejected a compromise agreed to by a central Ohio utility and its customers – then issued a ruling even more generous to the utility.

News Release: IO On The State Budget: A Job Killer That Rewards The Rich And Hikes Local Taxes

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For Immediate Release:  June 30, 2011

Contact:  Dale Butland, 614-783-5833

IO ON THE STATE BUDGET:

A JOB KILLER THAT REWARDS THE RICH AND HIKES LOCAL TAXES

Columbus-Innovation Ohio, a progressive think tank headquartered in Columbus, today blasted Governor Kasich and the Ohio General Assembly for a two-year budget that “kills jobs, rewards the wealthiest Ohioans, and makes local tax increases all but inevitable.  And by cynically refusing to accept even a modest cut in their own pay, legislators have hypocritically exempted themselves from the shared sacrifice they’re asking of everyone else.”

To illustrate its claims, IO pointed to the following:

  • By cutting school funding by nearly $3 billion and local government funding by 50%, as many as 51,000 existing public sector jobs could be destroyed, hobbling Ohio’s fragile economic recovery and potentially pushing the state into a “double dip” recession.  Click here to see IO’s previously released budget job loss study.
  • School cuts —and especially cuts to local government funds, which are used to pay for police, fire, trash pick-up and emergency response —will require communities either to hike taxes or make do with fewer educational and protective services.
  • While slashing services for the middle class, the budget lavishes millions of dollars in new benefits on the wealthiest Ohioans, including
    • elimination of the estate tax (which applied only to the wealthiest 7%);
    • the new “Invest Ohio” program (which, though created without a single  legislative hearing or any evidence of job creation, could potentially  result in 100 wealthy investors receiving $1 million each in income tax breaks);
    • a new $17 per student “bonus” payment to Ohio’s wealthiest school districts; and allowing millionaire, “for profit” charter school operators (and major Republican  campaign donors) like David Brennan to open new charters without independent sponsors. Oversight will now supposedly come from the State Department of Education, which lacks the resources to do it effectively.

Said IO Communications Director Dale Butland:

“On every level, this budget is a complete disgrace. By slashing education, it guts Ohio’s long-term competitiveness and mortgages our future.  By decimating local government funding, it shirks the state’s responsibility to help fund police, fire and other basic services -and fobs it off on local taxpayers.  By refusing to close tax loopholes worth $7 billion and instead stuffing the pockets of the rich with new and even more lucrative tax breaks, it mocks the idea of shared sacrifice. And by demanding wage and benefit cuts for every public worker but themselves, legislators have become me-first profiles in hypocrisy. I hope House Speaker Batchelder and his colleagues will explain why they should be paid more for their part-time jobs than many police and firefighters earn for the full-time jobs they are now in danger of losing.   Shame on the General Assembly.  Shame on Governor Kasich.   The budget they’ve passed is a travesty. Ohio and Ohioans deserve better.”

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Kasich Budget Could Destroy Over 51,000 Jobs

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For Immediate Release
April 7, 2011

Contact:  Dale Butland
614- 783-5833

KASICH BUDGET COULD DESTROY OVER 51,000 JOBS
Think Tank says losses could derail Ohio’s economic recovery

Columbus—Innovation Ohio, a progressive think tank headquartered in Columbus, released an analysis today which finds that passing the Kasich Administration’s proposed two-year budget could mean a direct loss of 51,052 existing Ohio jobs. The study, including the methodology used to calculate the losses, is posted at www.innovationohio.org and can be accessed directly by following this link.

Job losses of that magnitude—which are more than double the 22,000 jobs that have been created since Gov. Kasich took office—could easily stall the state’s still-fragile economic recovery.

IO’s study is believed to be the first to project the total number of direct job losses that would result from the Administration’s proposed cuts to K-12 education, higher education, state personnel, and local governments. Indirect job losses—which would occur as the decreased spending of newly unemployed workers rippled throughout the state economy—would have an added impact, as will the job losses from cuts to nursing homes and hospitals.

Innovation Ohio communications director Dale Butland had this to say:

“When Ohioans hear Gov. Kasich boast about his ‘jobs budget’, they mistakenly think he means a budget that creates jobs—not destroys them. But if the legislature enacts all the cuts contained in the Governor’s proposed budget, the 51,000 jobs we stand to lose is more than double the 22,000 jobs Ohio has gained since Gov. Kasich took office. The effect could be catastrophic to Ohio’s still-fragile economic recovery.

“School districts and local governments will, of course, do everything possible to avoid laying people off. But they’ve already made the easy cuts and pared their budgets dramatically. So when the Governor proposes to cut school funding by $3 billion and local government funding by 50%, firing workers or raising local taxes are the only realistic choices they have left. By stubbornly insisting that an $8 billion deficit must be closed through cuts and one-time money alone, Gov. Kasich is intentionally pursuing a policy that will cost tens of thousands of Ohioans their jobs. But attacking workers—whether through a job-killing budget or the unfair Senate Bill 5—will not fix Ohio. It will only destroy the middle class. And that’s not what Gov. Kasich was elected to do.”

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Direct Job Loss from Cuts in the Kasich ‘Jobs Budget’

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Research Overview

Governor John Kasich recently introduced his proposed two-year ‘Jobs Budget,’ HB153. While the Administration claims to be creating “a platform for growth, for job creation and for a resurgence of this state,” it appears that the Governor’s budget does just the opposite. The extensive cuts contained in this budget will result not only in the elimination or reduction of key services, but also in extensive job loss throughout the state.

Innovation Ohio conservatively estimates that in the absence of large local tax increases to offset the Administration’s proposed cuts to K-12 education, higher education, state personnel, and local governments, 51,052 direct jobs are likely to be lost.

Read the Report.

Read the Press Release.

Unanswered Questions: Liquor Privatization

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House Bill (HB) 153, the state operating budget for fiscal years 2012 and 2013, provides the mechanism for funding JobsOhio, the newly created private nonprofit responsible for handling the state’s economic development. HB 153 authorizes the state to transfer the distribution system for spirituous liquor and all its associated assets, defined as the “enterprise acquisition project,” to JobsOhio for no more than 25 years. In turn, JobsOhio is expected to issue bonds supported by liquor profits, allowing for a one-time transfer of $500 million to the General Revenue Fund (GRF) to compensate the state for the transfer of the state’s wholesale distribution system. The bonds will also provide JobsOhio with an estimated $700 million to pay off existing debt and $300 million to fund undefined economic development programs.

Selling nearly $7 billion in state assets, which represents the amount of revenue Ohio would receive from liquor profits over a 25 year period, for $1.5 billion of one-time money is a risky proposition that should be approached cautiously and be fully vetted by the Ohio General Assembly. Thus, Innovation Ohio has compiled a list of policy areas that need to be properly addressed to fully weigh the merits of such a proposal.

Read the report here.

News Release: Innovation Ohio Says Facts Don’t Support Senate Bill 5

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For Immediate Release:
February 28, 2011

Contact:  Dale Butland
614-783-5833

INNOVATION OHIO SAYS FACTS DON’T MERIT ENDING COLLECTIVE BARGAINING FOR TEACHERS

Columbus, Ohio — Innovation Ohio, a newly formed progressive think tank in Columbus, kicked off its organizational launch today with a stinging indictment of the attempt to strip Ohio teachers of their collective bargaining rights. Under the terms of Senate Bill 5 —introduced by State Sen. Shannon Jones and supported by Gov. John Kasich and many conservative law-makers — teachers would effectively lose many of the collective bargaining rights that have been in place since 1983. Supporters of the bill say the change is necessary to control costs and balance.

At the news conference, Innovation Ohio said that SB 5 would result in “relatively minor short-term state budget savings,” all of which “could be achieved through the current collective bargaining law.” Innovation Ohio also released a report  released a “Ohio Teachers and Collective Bargaining: An Analysis.” Among the report’s findings:

  • Far from being uncooperative or unyielding, Ohio teachers have made one of the largest financial sacrifices in the country, resulting in an average pay cut of 4% in 2008-09, the worst year of the recession. The national average was a pay increase.
  • States with no or limited collective bargaining laws have lower student achievement and far greater volatility in wages than collective bargaining states.
  • Under Ohio’s current collective bargaining law, teachers not only sacrificed financially, but also endorsed a landmark education reform law (HB 1) which, among other things, more than doubles the years needed for tenure, makes it easier to fire ineffective teachers, allows for lay-offs in cases of district financial hardship, and includes student achievement as part of a new and nationally-acclaimed teacher evaluation system.
  • There is no evidence that ending or eroding collective bargaining for teachers would improve student success, or that ending it is necessary to institute still-needed reforms.

Innovation Ohio Communications Director Dale Butland said:

“Facts are important – especially when passing major legislation or radical changes to long-standing public policy. If the proposed changes to the current collective bargaining for teachers won’t significantly impact Ohio’s budget deficit, and if teachers are already agreeing to the kind of reforms we need to improve the system and student performance, there is no compelling reason to repeal or weaken a law that that has been in place since the Reagan Administration.”

Former State Representative Steve Dyer, an acknowledged expert on education policy in Ohio, appeared with Butland and took questions from reporters.

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Ohio Teachers and Collective Bargaining: An Analysis

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Research Overview

Ohio’s path to economic prosperity begins in the classroom. Our leaders must work together to prepare today’s students for tomorrow’s jobs, rather than pursue an ill-advised assault on collective bargaining justified by the false claim that teachers’ ability to negotiate wages and benefits has contributed to Ohio’s projected budget deficit.

The opposite is true. During the depths of the Great Recession, Ohio teachers made great financial sacrifices – among the largest in the country. They also served as willing partners in reforming how educators are evaluated and compensated and their efforts in the classroom have resulted in improved student outcomes.

In short, Ohio’s teachers have worked with school districts and the state to make Ohio schools better and our education system more financially sustainable.

If our political leaders fail to recognize these realities, they risk undermining and trading long-term success for minor short-term state budget gains. In fact, research shows that eliminating or effectively crippling the state’s collective bargaining system will be as likely to add to state and local budget woes as cure them.

Press Release: Innovation Ohio Says Facts Don’t Support Senate Bill 5

Read the report (PDF).

Innovation Ohio
35 E. Gay St., Suite 403
Columbus, OH 43215
614-220-0150
info@innovationohio.org

© 2016 Innovation Ohio

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