‘New economy’ has major implications for the Valley

President Barack Obama traveled to Wisconsin Wednesday to continue his conversation with the American people that he began Tuesday in his State of the Union address. But while the politics of the visit to the cheese state is clear, the president may need to be reminded that he was, in fact, talking about the Mahoning Valley when he discussed the new economy.

“Many people watching tonight can probably remember a time when finding a good job meant showing up at a nearby factory or a business downtown,” Obama said. “You didn’t always need a degree, and your competition was pretty much limited to your neighbors. If you worked hard, chances are you’d have a job for life, with a decent paycheck, good benefits, and the occasional promotion. Maybe you’d even have the pride of seeing your kids work at the same company.

“That world has changed. And for many, the change has been painful. I’ve seen it in the shuttered windows of once booming factories, and the vacant storefronts of once busy Main Streets. I’ve heard it in the frustrations of Americans who’ve seen their paychecks dwindle or their jobs disappear — proud men and women who feel like the rules have been changed in the middle of the game.”

The Mahoning Valley has been feeling that pain for more than three decades, ever since the demise of the steel industry. And while there are bright spots in our economy, the exodus of young, educated people is an indication of the challenges that abound.

On the Business Page in Wednesday’s Vindicator, there was a graphic of the unemployment rates throughout the recession. In December 2007, the average jobless rate in Mahoning, Trumbull and Columbiana counties was 6.5 percent. That was still above the national average, but not by much. In January 2009, the rate rose to 13.3 percent, and in March of last year, the number soared to 14.5 percent. In December, the average fell to 10.7 percent, but the national average was 9.5 percent.

Youngstown’s 11.4 percent unemployment rate was the highest among Ohio cities with population over 50,000.

Thus, when the president said, “Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again,” we ask: To what extent can this region, which has lagged behind the rest of the nation for three decades, expect help from Washington?

We pose the question because the president announced plans to freeze annual domestic spending for the next five years. It would reduce the federal budget deficit by more than $400 billion over the next decade, and will bring discretionary spending to the lowest share of the economy since Dwight Eisenhower was president.

“This freeze will require painful cuts,” Obama acknowledged. “Already, we have frozen the salaries of hardworking federal employees for the next two years. I’ve proposed cuts to things I care deeply about, like community action programs. The Secretary of Defense has also agreed to cut tens of billions of dollars in spending that he and his generals believe our military can do without.”

Deeper cuts

The new Republican majority in the House has passed a bill making even deeper cuts in spending than the president proposed, which means regions like the Valley could be hardest hit.

That’s why the president should put this region on his travel itinerary. While it is true that in the November election Wisconsin, which has been a strong Democratic state, went Republican, it is also true that the predominantly Democratic Mahoning Valley requires a boost.

The area needs to hear how it will fare in the new economy.