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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The Buckeye Institute’s policy ideas incorporated into new healthcare access bills

 The proposed legislation would cut red tape for volunteer and mobile medical care in Ohio.

The Buckeye Institute’s longtime advocacy of expanding healthcare access and charity care–especially in low-income and underserved areas of Ohio–has found expression in two bills introduced to Ohio’s General Assembly in the past 24 hours.

These two companion bills reflect the policy ideas outlined in The Buckeye Institute’s report, Expanding Access to Healthcare in Ohio, which was released in November.

“Eliminating red tape and expanding the ability of charities to offer healthcare to low-income and underserved areas is an important step toward narrowing the gap between demand and supply in Ohio,” says Rea Hederman, Jr., executive vice president and director of the Economic Research Center at The Buckeye Institute.

The two bills were introduced respectively in the Ohio House and Senate by Rep. Robert Sprague, R-Findlay, and Sen. Peggy Lehner, R-Kettering.  If passed, these bills will:

  • Allow volunteer and charity care to count as continuing education credits for physicians, nurses, dentists, and many other licensed healthcare providers.
  • Provide limited legal immunity to licensed, out-of-state healthcare professionals who come to Ohio and provide volunteer medical care for short periods of time.
  • Expand free clinics and other charity care providers’ ability to operate mobile care centers to bring healthcare to areas with chronic provider shortages.

Sen. Peggy Lehner, vice chair of the Senate Health and Human Services Committee: “This is an opportunity to empower healthcare professionals in Ohio to help those who need care most desperately. The state of Ohio would save millions by allowing our healthcare professionals to volunteer their services without fear of civil liability.”

 

Rep. Robert Sprague, a member of the House Health and Aging Committee: “This legislation will help Ohioans in underserved communities have increased access to healthcare services. This bill strengthens Ohio’s volunteer care system.  It will enable our medical professionals to offer their time and talents, while granting liability protections and allowing them to earn continuing education hours.”

 

Deborah Miller, executive director of the Ohio Association of Free Clinics: “As volunteer driven healthcare organizations, free clinics across Ohio will benefit greatly from this proposed legislation. Volunteer physicians, nurses and medical professionals will now have, not only the increased protection from liability, but also the ability to earn educational credit while meeting the needs of Ohio’s underserved.”

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Minimum wage hike to $12 an hour would trim Ohio job growth by nearly 200,000

The Buckeye Institute calculates effect in new analysis


Ohio policymakers should prioritize job growth as the best way to provide Ohioans with the opportunity to achieve prosperity.  After all, the best program for reducing poverty is not a government program, but a job that can lead to upward mobility.  However, hiking minimum wage is not a solution.

Unfortunately, a minimum wage increase is trending around Ohio. Former Gov. Ted Strickland favors raising the federal minimum wage from $7.25 to $12 an hour.  Plus, a progressive group is working to put an “Ohio Fair Wage Amendment” on the November ballot. This legislation, if added to the state constitution, would raise minimum wage to $12 by 2021 and include automatic inflation adjustments thereafter.

Why not raise minimum wage?

The problem with raising minimum wage is simple yet profound:  Nearly 200,000 Ohioans would lose jobs. The long-standing consensus among economists is that hiking the minimum wage destroys jobs, especially for low-income workers who are often young or without a college degree.

Supporters of minimum wage increases have made efforts to revise this consensus in recent years, but reality is a stubborn thing. Scholarship continues to overwhelmingly validate this economic trade-off: Forcing employers to raise wages above the market level causes layoffs, and the replacement of low-skilled workers with technology.

A 10% increase in the minimum wage leads to a half a percentage point reduction in the employment growth rate.

Recent research found that a 10% increase in the minimum wage leads to a half a percentage point reduction in the employment growth rate. Taking into consideration inflation and other dynamic negative employment impacts, hiking the minimum wage by 10% lowers overall employment by 0.7 percentage points after three years.

Raising Ohio’s current minimum wage from $8.10 to $12 would be almost a 50% increase, consequently lowering the state’s overall employment rate significantly.

Put simply, a $12 minimum wage will harm Ohio’s job market. Extrapolating from Ohio Department of Job and Family Services baseline data on projected job growth, if minimum wage increases, there will be nearly 200,000 fewer jobs by 2020.  A similar phenomenon will likely be seen if the $12 minimum wage is added to state constitution, although the job loss may be more gradual due to the phased in structure of the amendment.

A recent study from the American Enterprise Institute (AEI) empirically shows that a minimum wage increase is more harmful in low-income counties than higher income counties.

Currently, Seattle is a test case. On April 1, 2015, Seattle ramped up their minimum wage to $11 an hour as part of a multi-year effort to raise minimum wage to $15 an hour.  According to another policy brief from AEI, restaurant jobs in the Seattle area declined by 700 between January and September of 2015, a loss of slightly over one half of a percent.  However, the rest of the state saw 5,800 new restaurant jobs, a growth of over 6.6%.  Not surprisingly, higher wage jobs were not adversely impacted.

Ohio can ill-afford a job growth slow-down, having only partially climbed out of the economic depths of the last recession. The state hemorrhaged jobs from 2000 and 2010, losing 620,000 private sector jobs!  More than any other state in the country, except “that state up north.”

Whether on a state or national level, increasing minimum wage to $12 is clearly bad policy. Those advocating for such change need to explain exactly how Ohio will be better off with fewer jobs.

— By Greg R. Lawson, policy analyst and Statehouse liaison, The Buckeye Institute

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Why Ohio needs asset forfeiture reform

By Daniel J. Dew, Criminal Justice Fellow.

There are a few principles so fundamental to American law and our notion of justice that practically any citizen can recite them—due process of law, every person is entitled to his or her day in court, innocent until proven guilty, just to name a few. These are things we have come to expect from our legal system. Unfortunately, these principles are glaringly absent from one area of law—asset forfeiture.

Legislation proposed by State Representatives Rob McColley (R-Napoleon) and Thomas Brinkman (R-Cincinnati) would restore some of those basic principles.

Asset forfeiture allows law enforcement to seize property owned by an individual that law enforcement believes may have been involved in a criminal act. The accused has no right to a trial unless he or she sues for it, and there is no presumption of innocence—property is taken solely based on probable cause (reasonable belief) that a crime was committed. Nowhere is the state required to convict the person of a crime in order to retain the seized property.

When property is taken, the proceeds from a sale or the property itself is retained by the law enforcement agency that seized it. There is incentive for law enforcement to seize property. The more assets a department seizes, the bigger its budget.

A person may only recover the seized property if the citizen sues the state to give back his or her own property. Before a court, the accused must demonstrate that the property was seized illegally and he or she is entitled to its return. The property is presumed to have been seized legally and the burden is on the accused to prove otherwise.

Even if the person is able to jump through the bureaucratic hoops to get his or her property returned, it may take months or even years. In the meantime, the person may have to hire expensive lawyers to fight any criminal charges, or, perhaps, just to reclaim the seized property.

The proposed reform goes a long way to remedy these problems. It would put the burden of proof back where it belongs—on the state. Under the proposed law, the state would need to prove by clear and convincing evidence that the property was involved in criminal activity in order to retain it.

This legislation would limit asset forfeiture without killing it. This reform is designed to preserve the tools that law enforcement and prosecutors need to deprive gangs, organized crime, and drug dealers of resources and strip those offenders of their ill-gotten gains while protecting the innocent.

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Cincinnati pension fix is band-aid, not real reform

By Patrick Foley.

In 2014, Cincinnati Mayor John Cranley worked with city officials and workers to arrive at a “historic agreement” to avert a crisis and stabilize their pension system. The deal was finalized in early 2015 and took effect in January of this year. Both sides had to make sacrifices to come to an agreement, but officials optimistically project that, if everything goes as planned, the pension system could be fully funded in only 10 years.

Cincinnati Mayor John Cranley

However, things don’t always go as planned.  Another recession or a drop in city tax revenues could cause things to go south again in a hurry. For example, the Milliman Public Pension Funding Study for 2015 found that while public pension funding status increased from 70.7% to 75% last year, several years of strong market returns are beginning to tail off, and funded ratios will begin to decline again.

The study also points out, as The Buckeye Institute did in 2013, that pension sponsors continue to assume unrealistic investment returns, which results in actual funding ratios being overestimated. Therefore, there is reason to believe that the supposed groundbreaking agreement is little more than a band-aid solution.  With any sort of market downturn the already optimistic investment returns will be woefully inadequate to fund the city’s pension system.

Under the Cincinnati deal, the city will increase contributions to the pension system, including $38 million this year, and then 16.25% of payroll (up from 14%) for each of the next 30 years, or around $26 million per year. The deal will also move $200 million into pension from the more stable retiree health care system. Employees and retirees have agreed to a 3-year freeze on cost of living adjustments to their pensions, after which the COLA increases will be fixed at 3% simple interest per year.

This agreement may help stem the tide of unfunded pensions temporarily, but marginal improvements to an outdated system aren’t going to create a pension system with lasting stability.

The Buckeye Institute has already argued extensively that the solution is to shift from a defined benefit pension plan to one with defined contributions similar to private sector retirement plans.  Other states are already beginning to shift towards defined contribution or hybrid plans, saving taxpayer dollars while continuing to provide government employees with comfortable retirements.

Cincinnati’s efforts only temporarily address the pension problem; the issue isn’t going away at a local or statewide level. Ohio lawmakers can keep applying small reform band-aids, or they can be proactive and fix the system once and for all.

Patrick Foley, a senior at Ohio Dominican University, is Policy and Communications Intern at The Buckeye Institute.

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