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More jobs, smaller labor force lead to drop in jobless rate
youngstown
A sizable drop in the unemployment rate in the Mahoning Valley for March was the result of both more employment and a smaller labor force, analysts say.
The local economy to some degree fits in with the national averages, which show slow growth in job creation, said Tod Porter, professor and chairman of the economics department at Youngstown State University.
The unemployment rate for Mahoning, Trumbull and Columbiana counties decreased from 10.4 percent in March 2011 to 8.8 percent in March 2012. The civilian labor force decreased by 4,000 to 262,000 compared with March 2011, according to data released Tuesday by the Ohio Department of Job and Family Services.
Employment in Mahoning, Trumbull and Columbiana counties increased from 238,100 in March 2011 to 239,400 in March 2012, an increase of 1,300 jobs.
The number of unemployed dropped by 4,600 to 23,000 in the Mahoning Valley. This is a combination of people who have left the work force by no longer looking for employment and the 1,300 new jobs.
There are two factors that impact the unemployment rate: the number of jobs added and the size of the work force. The question is why a large number of people have left the work force, Porter said.
“There are a number of economists who theorize we should be looking at the employment numbers, not the unemployment,” he said.
Just to get unemployment back to where it was before the 2008 recession within three years, there would have to be an increase nationally of 300,000 to 350,000 jobs per month, Porter said. The current rate of job growth is between 100,000 and 200,000.
This means it could take between seven and nine years to return to a job market similar to the one that existed before the recession, he said.
“The economy is going through a recovery, but it certainly is a slow recovery,” said Ben Johnson, JFS spokesman.
Overall, Ohio also had a shrinking work force in the past 12 months, he said.
“There has been a lot of attention given to discouraged workers, and I’m sure that is a factor,” Johnson said.
JFS does not ask in its survey why people no longer are in the work force, he said.
Trumbull, Mahoning and Columbiana counties have gained in terms of aggregate earnings in the past year, said George Zeller, an economic-research analyst. He reiterated that economic recovery in the Valley being slow and having a long way to go to is making up the huge losses that previously had been experienced locally.
The previous losses during the recession from 2007 to 2011 in Ohio led to the Youngstown-Warren area’s being the worst in the state’s seven large multicounty regions, he said.
The unemployment rate is determined using individuals older than 16 who are working or seeking work. It excludes military personnel, those studying or staying home full time and those who cannot work, are retired or are volunteer workers.