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State spends billions on job incentives that mostly benefit the wealthy
Ohio had the sixth-highest unemployment of any state in April. The news comes after years of state officials spending billions on economic growth programs tilted heavily toward the wealthy.
It might seem ironic, but Ohio’s economy added jobs in April even as unemployment continued to grow. That’s because job growth isn’t keeping up with the numbers joining the workforce. And there are reasons to believe that things will get worse, according to the think tank Policy Matters Ohio.
Data released last week by the Ohio Department of Job and Family Services estimated that the state added 22,200 jobs in April. But statewide unemployment rose for the fifth consecutive month, to 4.9%. That’s the sixth-highest of any state, according to the U.S. Bureau of Labor Statistics.
Heather Smith, a researcher at Policy Matters Ohio, said the new state data raise some questions.
“The civilian labor force has increased at about the same rate as the number of unemployed workers, suggesting that while more Ohioans are entering the job market, they are not all securing employment,” she said in a written statement. “This raises questions around the reported increases in jobs across service-providing industries – why aren’t Ohioans getting hired?”
The Department of Job and Family Services conducts a monthly survey, releases its estimate of the number of new jobs, and then often revises it downward. For example, it initially estimated that 7,500 jobs were created in March, and then cut that number to 5,200.
Of the jobs thought to be created in April, the great majority were in the service sector, 18,800. More than 6,500 of those were in hospitality as those businesses staff up for summer.
Construction and manufacturing added 1,200 and 1,100 jobs, respectively, while the number of government jobs increased by 1,300.
A separate household survey indicated that 15,000 joined the Ohio job market in April. But only 6,000 found jobs while the rest were unemployed.
“Legislators ought to pay attention to the growing unemployment rate, given its steady increase over the last five months,” Smith said. “The last time we saw the unemployment rate in Ohio decrease was between September and October – prior to the November election.”
Ohio’s economy has lagged for more than a decade after the creation of billion-dollar programs mostly benefitting the well off on the promise that they would create jobs for average Ohioans.
Created in 2013 under the auspices of then-Gov. John Kasich, the LLC tax loophole costs about $1 billion a year.
It was sold as a way to boost small business. But an analysis showed that hiring in that sector has fallen relative to other states, while the wealthiest 7% are claiming nearly 40% of the benefit.
Started around the same time, JobsOhio is funded through a state liquor franchise that used to flow into state coffers. Its well-paid staff has grown rapidly as it has doled out more than $1 billion in incentives to businesses. But it hasn’t proven that those incentives have created any jobs.
Even so, the Ohio Controlling Board in February extended JobsOhio’s control of the state liquor franchise to 2053. The “private” corporation paid the state $1.41 billion for its initial lease of the franchise. But the state didn’t require an additional penny to extend it another 15 years.
Meanwhile, Smith of Policy Matters Ohio warned that several developments at the federal level could further drag down the Ohio job market.
“A recent survey of Fourth District businesses by the Federal Reserve of Cleveland found that 22% of respondents anticipated the tariffs would force them to decrease their staff,” she wrote. “This is already underway: Several large employers across the state have submitted mass layoff notices, including 744 manufacturing jobs in Fremont. A Chillicothe paper plant, which was set to layoff 826 union workers by the end of June, agreed to remain open until December. While this buys impacted Ohioans a bit more time, the plant closing will be a devastating hit to workers in the area.”
In addition to potential harm from tariffs, the Trump administration is trying to cut hundreds of thousands of federal jobs and to slash services as it tries to fund further tax cuts.
“Ohio policymakers need to hold their federal counterparts accountable for the impact of funding cuts on the state and stop preemptively cutting critical public services with trigger language in the state budget,” Smith said. “If federal budget hawks get their way and force the state to pick up a greater share of the Medicaid budget, proposed trigger language could cut off the health insurance of 770,000 Ohioans.”
