Mahoning Valley jobless rate falls but area still lags

By Karl Henkel

khenkel@vindy.com

YOUNGSTOWN

The Mahoning Valley’s unemployment rate fell for the fourth straight month in May, but according to a new report, the region still lags behind the rest of the nation economically.

The Brookings Institution report, which tracks quarterly the economic recession and now recovery of the 100 largest regions, ranks the Valley as one of the 20 weakest-performing metro areas.

The Valley was one of four Ohio regions — including Toledo, Dayton and Cleveland — in the bottom 20.

The 100 largest metro areas represents 75 percent of the U.S. population, according to Brookings.

When compared to a peak employment level in 2005, the Valley’s employment rate has fallen a whopping 9.1 percent. The 100-metro areas averaged a 5.3 percent drop.

But from a short-term perspective, the report highlighted a positive change in the region’s employment gains.

The Valley has seen a 2.1-percent increase in employment since the third quarter of 2009, it’s low point.

That figure is more than twice the national average of 0.8 percent and the 19th-highest employment gain nationwide.

“The region as a whole was hit very hard during the recession,” said Howard Wial, a Brookings fellow and co-author of the report. “Jobs are coming back more strongly, and the unemployment rate is coming down faster than any other large metro area in the country.”

In fact, in two studies, the Valley ranked as one of the most-improving regions when it came to declining unemployment rates.

Brookings ranked the Valley as the fastest declining metro area in the last year, and a report released Monday at the U.S. Conference of Mayors slotted the region as the third-fastest.

“It jives with other recent reports that have placed us in job creation over the last 12-to-18 months, especially in the manufacturing sector,” said Walt Good, vice president of Economic Development at the Youngstown/Warren Regional Chamber. “

Cleveland-based economist George Zeller said the report highlights some of the positives in Northeast Ohio, but its sample size minimized the recent growth the region has seen.

“I don’t think that the Brookings characterization of the Mahoning Valley among the worst performing cities in the USA is reasonable,” he said.

“That [fact] ignores the fact that the Valley is the fastest growing region in all of Ohio right now, by a large margin.”

Zeller said using 2005 as the peak unemployment level was structured for a nationwide study, but that job deterioration in Northeast Ohio started as far back as 2000.

“Here in Ohio, our weakness goes back a bit farther,” he said.

The weakness Zeller speaks of includes Trumbull County, which he said lost almost half of its manufacturing jobs since 2001. He said last year manufacturing jobs grew 35 percent in Trumbull, which he described as “phenomenally” good news.

Overall, since January, when the Valley’s unemployment rate was 11.6 percent and there were 31,000 unemployed residents, job growth has steadily improved.

It’s unemployment rate in May was 9.4 percent, a nearly two full percentage-point difference compared to a year ago.

But the rate is still higher than the national and state average.

What’s holding the Valley back, Wial said, is that its gross metropolitan product — the market value of all final goods and services produced within an area in a given period of time — took a devastating hit from its peak period of 2005 and isn’t rebounding at the same pace as job growth.

“The challenge is we at this point with the recession, we haven’t bounced back in total from a manufacturing perspective,” Good said.

“Companies in construction or product manufacturing for building trades, they’re still feeling the impact.”

Good also pointed to some business, like V&M Star in Youngstown, which are still regaining footing and in the process of hiring hundreds of new employees.

The Valley’s GMP was lower than all but eight metro areas in 2005 and grew at a below-average rate in the first quarter this year.

Wial said all factors — job growth, unemployment, GMP, real estate-owned properties and housing prices, which have been hit hard nationwide — weighted equally in the study and that it will take time before the Valley can work its way back into the “average” category.

“The fact that the recent Mahoning Valley job growth has been driven by large Manufacturing job growth is the main story as I see it,” Zeller said.

“Brookings is absolutely correct that we still have a long way to go before the Mahoning Valley recovers from the prior horrible job losses.”