Buckeye Institute concerned by April job losses, but sees signs of long-term recovery

COLUMBUS — Ohio’s free-market think tank found an encouraging sign in the state’s April jobs report released Friday morning. Although The Buckeye Institute’s Rea S. Hederman Jr. is concerned by the loss of 13,600 jobs, he said the new report shows continued record growth in labor force participation.

The Ohio Department of Job and Family Services’ latest employment report shows Ohio’s unemployment rate increased slightly to 5.2 percent in April from 5.1 percent in March. Labor force participation, however, increased to 63.5 percent from 63.3 percent, which suggests a strong recovery is underway, according to Hederman.

“Ohio’s April jobs report indicates that potential workers continue to enter the labor force to find work,” Hederman, The Buckeye Institute’s executive vice president and director of its Economic Research Center, said. “The bad news is new job opportunities did not grow as fast in April and the unemployment rate grew as a result.”

Over the last year, Ohio has surpassed the national average in terms of potential workers entering the labor force. The United States labor force participation has remained virtually flat at 62.8 percent and actually declined over the last month. By comparison, Ohio’s labor force has grown nearly 1 percent over the last year.

“Ohio does have a slightly higher unemployment rate than the national average, but that is because of the increase in the state’s labor force participation rate,” Hederman said. “Ohio’s tax cuts have generated growth and opportunity, but more needs to be done. Policymakers should look at Ohio’s regulations that can restrict opportunities for both businesses and workers.”

The April report shows the construction industry gained 900 jobs last month. Still, that increase did not make up for losses in manufacturing (-2,700) or business and professional services (-5,100). Jobs in real estate increased by 2,400 in April, making that sector the fastest-growing one over the last year, increasing by 9.7 percent.

Local government also declined by 6,100 jobs. Mining and logging continues to shed jobs, losing one out of every five jobs over the last month.

The Buckeye Institute analyzes Ohio’s unemployment rate to identify policy solutions for increasing job opportunities and strengthening the state economy.

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Founded in 1989, The Buckeye Institute is an independent research and educational institution – a think tank – whose mission is to advance free-market public policy in the states.

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What a recent court ruling means for President Obama’s climate change plan

President Obama’s landmark climate change regulation continues to be on hold until the U.S. Supreme Court offers a ruling on his “Clean Power Plan.” Yesterday, however, a major decision by the U.S. Court of Appeals for the D.C. Circuit fast-tracked the much anticipated decision.

On Tuesday, the D.C. Circuit Court announced its full slate of judges (two of whom recused themselves) will review the president’s Clean Power Plan. Typically just three judges are randomly selected to hear such a case, after which either party can appeal the decision to an “en banc” review by the full court.

But with Tuesday’s announcement, the Clean Power Plan will bypass the three-judge review and go directly to en banc review. (Notably, President Obama’s nominee to fill Justice Scalia’s seat, Merrick Garland, is one of the two recused Appeals Court judges in the Clean Power Plan case.) Still, however, the D.C. Circuit’s ruling will matter only if the U.S. Supreme Court declines to take up the case or reviews it and offers an opinion in line with the lower court.

The Buckeye Institute and the state of Ohio have joined more than 100 entities across the country in the litigation to stop the Clean Power Plan, given its harmful effects on Ohio’s (and the country’s) economy. According to various studies, President Obama’s Clean Power Plan would:

  • destroy an estimated 32,000 manufacturing jobs in Ohio
  • raise Ohioans’ electricity prices by 15 percent per year, on average, over a decade
  • implement a costly “cap and trade” scheme—that Congress already rejected—through an unaccountable federal bureaucracy

This case over the Clean Power Plan has been as unpredictable as the weather: Late in 2015, the D.C. Circuit court declined the request from the Buckeye Institute and others to issue a “stay” order that would stop the EPA from implementing the regulation while the lawsuit is ongoing. In an unprecedented move, several parties appealed the request to the Supreme Court, which overturned the D.C. Circuit’s 5-4 decision in February and granted the stay. Less than a week later, Justice Antonin Scalia’s death cast doubt on the Clean Power Plan’s future.

The D.C. Circuit’s surprising move to fast-track their review underscores the importance of the case. Now, all eyes are on the nomination for the next justice, who will likely cast the decisive vote as to whether the regulation will stand.

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Ending the Mandatory Use of Project Labor Agreements Will Save Taxpayer Dollars

Ohio needs many different labor reforms.  Ending the mandatory use of labor agreements (PLAs) in public projects will save Ohio taxpayers money.  PLAs pick winners and losers. Among those losers are the millions of Ohio taxpayers, businesses, and non-union employees that continue to pay more for less.

Estimates show that projects with PLAs can increase construction costs by as much as 15% – providing Ohio with less bang for the buck.  PLAs make taxpayers pay more for public projects such as roads, infrastructure, and repairs that could be done better, faster, and more efficiently.

new policy brief based on a Buckeye Institute report explains how PLAs:

  • Increase costs for taxpayers;
  • Decrease competition among contractors on public projects by adding burdensome red-tape and requirements;
  • Force non-union workers on PLA projects to pay for union benefits they will likely never see.
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Thumbs down: Read our bad review of Ohio’s plan to give tax breaks to Hollywood movie producers

Have you ever heard of View from the Top? It was a 2003 movie featuring actress Gwyneth Paltrow, Christina Applegate, Mark Ruffalo, and Rob Lowe. What about Rebound (2005) or Summer Catch (2001)?

These films have a few things in common: They were filmed in Ohio, busts at the box office, and losers both for investors and Ohio taxpayers.

Ohio is a sucker for subsidizing the production of Hollywood movies. Filmmakers who spend at least $300,000 filming in Ohio get motion picture tax credits – in other words, the ability to legally avoid taxes that everyone else pays.

It may sound appealing to have movie producers consider Ohio as the place to film their next “hit,” but in reality Ohio businesses and residents are footing the bill for Hollywood.

The state gives special tax breaks to appear more hospitable to Hollywood producers. But Ohio businesses and workers are not awarded this same luxury. Ultimately, Buckeye State residents will pay more in taxes to make up for what visiting filmmakers don’t pay.

Some well-respected hits like The Shawshank Redemption (1994) and Rain Man (1988) have been filmed in Ohio. But it isn’t the job of state taxpayers to prop-up Hollywood hits or box office busts.

However, Senate Bill 289, sponsored by Senator Tom Patton (R-Cuyahoga), proposes substantially increasing tax credits for movie producers shooting in Ohio. The motion picture tax credit cap is currently $40 million for every two-year budget period. In other words, the state cuts off the tax credit faucet at $40 million.

The proposed bill would raise the cap to $100 million for the current biennium (two year period) and $160 million for all subsequent biennium.

We propose an alternative ending to the Hollywood financier’s script. The rewrite is one word, stolen from every Hollywood director: “Cut!” As in cut the tax break to $20 million next year, then cut it to zero in the next.

Our pitch has an unsexy title: Good Tax Policy, starring Ohio legislators dedicated to low rates applied neutrally and fairly.

It is time Ohio businesses stop picking up the tab for Hollywood.  Paying the same taxes as everyone else is a cost of doing business, for Ohioans and Hollywood financiers.

Sure, it’s fun to see a movie being made in Cleveland or Cincinnati.  In 2015, the Cincinnati area was home to such would-be classics as The Funhouse Massacre (“Six of the world’s scariest psychopaths escape from a local Asylum…”) and Marauders (“An untraceable group of elite bank robbers is chased by a suicidal FBI agent…”).

Admittedly, those artistic opportunities are hard to turn down. But sometimes being a legislator means making tough decisions about how to tax, how to spend, and where to film movies about six of the world’s scariest psychopaths.

— By A.J. Beam

Posted in Government, State Government, Taxes | Leave a comment

Ohio job growth exceptionally strong in February

Ohio added 12,400 jobs in February, a sign that the state’s economy is moving forward. The unemployment rate remained unchanged at 4.9%.

“The February jobs report has great news for Ohio as thousands of people entered the labor force and found jobs,” says Rea S. Hederman, Jr., executive vice president of The Buckeye Institute.

The fact that the unemployment rate didn’t change — despite an increase of 6,000 in the number of unemployment — is a powerful signal of improving economic health in Ohio.

A total of 34,000 Ohioans entered the labor force last month. Of those, 28,000 got jobs and 6,000 are still looking. Many Ohioans, once too discouraged to even look for work, have rejoined the labor force. That employment optimism is very good news, even though returning job seekers are counted as unemployed while they look for work.

Rea S. Hederman, Jr.

“The labor force participation rate jumped up to the national average while the unemployment rate held steady at 4.9%. This means that the labor market is creating enough new job opportunities to meet the surge of new workers,” Hederman says.

Ohio’s labor force participation rate was 62.9% in February, up 0.2 percentage points. The rate is the highest in two years and now comparable the U.S. average. The labor force participation rare measures the portion of people over 16 who are working or looking for work.

Many of these new jobs are in the service and real estate sectors, Hederman notes.

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The Buckeye Institute creates “Ohio Jobs Tracker,” a new look at employment

The Buckeye Institute is pleased to roll out our newly redesigned Ohio Jobs Tracker (formerly known as our Ohio by the Numbers report) along with today’s release of January state jobs numbers from the federal Bureau of Labor Statistics.  This monthly labor market report charts 5 core economic indicators and also highlights a different aspect of the Ohio economy each month.

Ohio’s economy enjoyed a strong start to 2016.  The private sector added 7,700 jobs in January, and the labor force participation rate increased for the fourth month in a row.  However, jobs numbers for the mining and logging sector were revised downward significantly.  The updated data show that mining and logging employment has fallen nearly 20% in the last year as low oil and gas prices and a weak coal market have forced many companies to cut jobs.  This turmoil is a devastating blow to the communities and families who depend on that sector.

Key data points:

  • Unemployment rate.  The jobless rate rose to 4.9% in January, up from 4.8% a month earlier but down from 5.1% a year earlier.
  • Labor force participation rate.  The percentage of working-age Ohioans who have a job or are looking for work rose to 62.6% in January, up from 62.3% a month earlier.
  • Total jobs.  Ohio added 100 total jobs compared to the previous month (seasonally adjusted) and 80,800 jobs from a year earlier.
  • Private jobs.  Ohio added 7,700 private sector jobs from the previous month and 79,000 jobs from a year earlier.
  • Labor force.  The total number of Ohioans who have a job or are unemployed and looking for work rose by 28,000 in January to 5,722,000.
Major employment changes by sector during January:

 Winners

  • Real estate and rental and leasing.  The industry added 1,400 jobs, up 2.2%.
  • Information.  The sector gained 1,600 jobs, a 1.4% increase.

Losers

  • Mining and logging.  The industry saw a 1.6% drop.
  • Federal government.  This sector employed 900 fewer people, a loss of 1.2% of its workforce.
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Incentivizing charity care can play big role in expanding healthcare access for underserved

Health care is expensive. The demand for treatment exceeds the number of doctors and nurses providing care.  By helping to increase the supply of health care providers, particularly in areas that are currently underserved, policymakers can expand access to citizens in need. Charity care is one solution.

As an earlier Buckeye report stated, charity care can be good for both doctors and patients.  Through charitable care, health care providers can provide care to those in dire need, particularly the indigent and uninsured.

Recently, the General Assembly seized upon The Buckeye Institute’s recommendations on charity care in the form of two new bills.

These bills allow health care providers to receive continuing education credits (CEs) for providing charity care.  Though this will not immediately flood the market with new providers, it is a step in the right direction. After all, these providers must obtain a certain number of continuing education credits in order to remain licensed to practice in Ohio. By allowing a portion of the requisite CEs to be obtained through the practice of charity care, many providers will have additional reasons to perform this vital function.

There are over a million Ohioans who need more health care.  As The Buckeye Institute has long maintained, Medicaid is an inadequate program.  It remains too expensive and many providers refuse new Medicaid patients.  Charity care, by contrast, represents an alternative to government-run health care.  Freeing doctors from bureaucracy to voluntarily help patients makes good civic sense.

These bills also offer expanded immunity from litigation so long as the providers practice charity care in a designated way and within the scope of practice for which they are licensed. This protection from potentially frivolous lawsuits will further help expand health care supply by removing a lingering disincentive to the provision of charity care.

These bills are not compulsory.  Instead, they seek to build on civil society by making it easy for doctors to volunteer their time.  By letting doctors use some of their time to fulfill education requirements, the bills encourage doctors to provide care for charitable institutions.  This could ameliorate the problem that all too many Ohioans continue to have in finding a health care provider despite the much-vaunted Medicaid expansion.

— By Rea Hederman, Jr., Executive Vice President, The Buckeye Institute

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