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Decline in jobless rate has down side
YOUNGSTOWN
Despite job growth officially ending the recession, the local economy continues to experience two associated economic problems.
One is the large number of people who are leaving the work force; the second is that those who are working are being paid less, said George Zeller, a Cleveland-based economist.
The Mahoning Valley fits the statewide pattern for August, with the unemployment rate affected mostly by people leaving the work force, Zeller said.
“Statewide, there have been 61,000 people leaving the labor market just this summer,” he said.
Tod Porter, professor of economics at Youngstown State University, said the local economy had been doing well from January until June — adding an average of 1,600 jobs a month.
Last month, however, that number decreased, he said.
“The question is, was that just a bump in the road to recovery, and next month we will go back to adding about 1,600 jobs,” Porter said, “or we continue to add 800 jobs a month, which would be a brutally slow recovery.”
The Mahoning Valley unemployment rate dropped to 7.7 percent from 8.6 percent. The decrease was a combination of the labor force shrinking by 1,000 workers, 800 more people employed, and the number of unemployed falling by 2,600, according to Ohio Labor Market Information related by the Ohio Department of Job and Family Services.
The decreases in the unemployment rate have been a combination of people leaving the work force and new jobs, Porter said. In Mahoning County, about two-thirds of the decrease can be attributed to new jobs, while increased employment accounts for only about a third of the drop in Columbiana County’s unemployment rate.
“Nearly all of the drop is Trumbull County is attributable to new employment,” Porter said.
August’s unemployment was the second-lowest for the area in 2012 after 7.4 percent in May. The unemployment rate for Trumbull County decreased from 9.1 percent in July to 8.2 percent, in Columbiana County it dropped from 8.3 percent to 7.6 percent, and Mahoning County had the lowest unemployment rate at 7.3 percent, which was down from 8.3 percent in July.
Because the local numbers are not seasonally adjusted, it typically is not helpful to look at the month- to-month county unemployment figures, Zeller said. This month, however, the change in the size of the labor force was significant enough to overcome seasonal factors.
“It is to be expected that for September, more people will leave the labor force. This is because of high-school and college students who return to school,” he said.
Workers falling off unemployment has always been a problem in this area relating back to the days of the steel collapse, said Bert Cene, director of the Mahoning- Columbiana Training Association.
“The unemployment rate is moving in the right direction,” he said.
Much of the July increase in unemployment can be attributed to layoffs from RG Steel in Warren, Cene said.
“A lot of those workers have already come to our One-Stop offices,” he said. “In the past, unless it was a permanent shutdown, people would wait to come in. It’s good to see them coming in early.”
The One-Stop offices have been experiencing a steady number of orders for workers, Cene said. The trades, including welders, have been highly sought.
The association also finished a recruitment effort for Exterran’s new site on Salt Springs Road, he said. Exterran will build implements used to service the oil and gas industry.