MAHONING VALLEY Personal income is below average, survey reveals
THE VINDICATOR, YOUNGSTOWN
Youngstown-Warren and some smaller markets are holding Ohio back, a Cleveland State study says.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- Personal incomes in the Mahoning Valley are lagging state and national averages, while incomes in Ohio's largest metropolitan areas are higher.
A new study that looks at Ohio's manufacturing productivity highlights the haves and have-nots in Ohio when it comes to per capita incomes.
In general, being in a larger metropolitan area means earning more money, said the study "Ohio's Competitive Advantage: Manufacturing Productivity" by Dr. Edward Hill of Cleveland State University.
The exception was Youngstown-Warren, which had a per capita income below the smaller Canton-Massillon area and almost as low as the Lima area. Per capita income was calculated by dividing total personal income in a metropolitan area by the population.
The numbers: The study said the per capita income in Youngstown-Warren plummeted from 1979 to the mid-1980s. It recovered from that crash and now is $3,000 higher when adjusted for inflation, but the weakness of the labor market is shown by how far below the national average the figure remains, the study said.
In 1998, Youngstown-Warren had a per capita income of $23,599, compared with a national average of $27,804 and a state average of $26,649.
Cleveland-Akron, Columbus and Cincinnati all had incomes of more than $28,500.
The Youngstown-Warren market and some smaller markets, such as Steubenville, are the major reason why Ohio doesn't perform well when compared with the rest of the country, the study says. Steubenville is the worst performing metropolitan area in Ohio with a per capita income of $20,671.
"The solution is to link them with the state's economic spine," the study says.
Advice: It suggests that government invest in places that are left behind by pure market forces. The most important investments are accumulating viable development sites and investing in education and training.
The state should build on its manufacturing strengths, the study says. Manufacturing is widely distributed throughout the state and rural areas are particularly dependent on it.
The study says the state needs to consider a four-part approach to its economic development and technology policies:
UIn the near term, continue work force development programs for the existing work force.
UIn the next five to 15 years, nurture a strong industry-educational partnership that focuses on process and product innovations in manufacturing.
UIn the long term, improve the basic science and research infrastructure of the state to reflect the strengths of universities and respond to national science policy.
UFundamentally change the business taxation policy to provide incentives for capital formation and encourage new business formation by replacing the tangible personal property and corporate franchise taxes with a flat tax paid by businesses on wage and salary payments.