43
MAHONING VALLEY Expert: Region’s recovery will take decades
YOUNGSTOWN
Despite lower unemployment, new jobs from shale industries and growth within manufacturing, the Mahoning Valley is still more than five decades from recovering from the two most recent economic downturns, an economist says.
The Valley is adding jobs, but the process is moving slowly. Cleveland-based economist George Zeller has estimated it would take 52 years for Mahoning, Trumbull and Columbiana counties collectively to reach the same number of people who were employed in 2000.
His individual recovery times for the three counties are Mahoning, 46 years; Trumbull, 127 years; and Columbiana, nine years.
Economic recovery has been better in the Youngstown area compared with other parts of the state in the past year or two, Zeller said.
The issue is that Youngstown has much further to recover than other sections of Ohio. The rest of the state is projected to take 11 years to recover.
“In the Youngstown market, there have been 967 jobs created in the last year,” he said. “But since 2000, the area has lost 40,500 jobs.”
An issue with a 50-year recovery time is the United States has never had five decades without a recession, so a recovery of that length of time would be impossible, he said.
“We need to speed up the recovery,” Zeller said.
Tod Porter, professor of economics at Youngstown State University, however, does not believe the 52-year recovery time is realistic because the U.S. economy in its history has never been down for that length of time.
“At some point, there will be improvement,” he said.
The slow recovery figures combined with reduced earnings in many business segments is “kind of depressing and not very encouraging,” Porter added.
“Reduced earnings means there is less money flowing into the economy. It can create a downward spiral,” he said. “This is not a situation that anyone wants to be in obviously.”
The governor’s office agrees that while there has been recovery it’s not progressing nearly fast enough, said Rob Nichols, spokesman for Gov. John Kasich.
“We’ve been in a very deep hole,” he said. “Ohio was on life support.”
The recent figures have been better with Ohio fourth in job growth nationally in the last 18 months, Nichols said.
“Every politician needs to focus on job growth. Those who don’t do so at their own peril,” he said.
There were a lot of people who left the state because of the job losses since 2000, Nichols said.
“We’ve lost a lot of our best and brightest,” he added. “It’s been tragic.”
Kasich has focused his economic development through working with the private economic development entity JobsOhio. He also has opposed government increases in spending to help boost the economy.
Typically, the government would temporarily spend more to help the economic recovery efforts, Zeller said. In this case, the government did that with the federal economic stimulus package but has since cut spending.
“There are a lot of politics involved because of the election coming up,” Zeller said. “There are a lot of endless arguments and nothing is being done.”
Zeller said it is unfortu nate that the U.S. is using the same tactics of cutting government spending during a recession that have exasperated the current economic situation in Europe, particularly in Greece and Spain.
There are a lot of people who have underestimated the impact of the economic stimulus money.
Porter said the stimulus does not receive enough credit.
“The money supported state and local governments so they could maintain spending,” he said. “By 2011, that stimulus money was gone and what you see is state and local governments starting to cut back.”
Without the stimulus funding, those cuts would have occurred earlier, making the recession worse, Porter said.
All economists agree the government needs to do something about deficit spending, he said.
The debate is about whether those cuts should take place during an economic downturn, Porter said.
“One side argues the stimulus should have been a lot bigger and for a lot longer,” he said. “The other side argues we need to get used to, in effect, having a lower standard of living. We need to force the people to get used to lower earnings and a lower standard of living.”