Governor’s race: How are Ohio households doing?
CINCINNATI (AP) – Looking at a wide-screen view of Ohio’s economy, there are clear signs of economic progress during Republican John Kasich’s time as governor. Zooming into the kitchen tables of average Ohioans brings a fuzzier picture.
In the broad view, the state has added jobs and reduced unemployment, and overall state income and consumer spending have increased. Yet, many households’ incomes and their net worth have lagged below pre-recession numbers, home ownership hasn’t bounced back all the way, and family poverty rates have risen.
A look at the facts and politics about Ohio’s economy at the household level with Kasich seeking re-election Nov. 4 against Democrat Ed FitzGerald.
Overall state income has risen, but real median household income – or the money coming into households at the midpoint of income distribution – fell at a steeper rate than the nation’s. Real median incomes dropped from more than $54,000 in 2007 to less than $45,000 in 2012, the latest federal estimates. That indicates that income gains tended to be in the top half, while some in the lower half had less income than before the recession. The number of people living at or below federal poverty levels continued to increase in Ohio, topping 16 percent in the last Census estimates from 13 percent in 2007. In a measure of a middle class-defining goal, home ownership rates were at 68 percent last year, down from 71 percent before the recession’s onset.
Ohio’s growth in economic output slowed to below 2 percent last year, or about the same as the national rate, after topping the national rate with rises of around 3 percent in each of the previous three years.
The state’s gross domestic product, which fell to $476 billion in 2009, has climbed steadily to $565 billion under Kasich, according to federal numbers. That means the value of Ohio-produced goods and services are increasing, and in another positive sign for the state’s economic outlook, recently released federal statistics show consumer spending in Ohio rose 12 percent in the first three years after the recession’s end.
Ohio’s experience has been similar to much of the nation’s in making a slow recovery from the Great Recession of 2007-2009. The state was particularly hard hit by an auto industry freefall that contributed to losses of thousands of good-paying jobs.
Overall employment rates have rebounded and the state’s economy has expanded, but that growth, Miami University economist William Even says, “isn’t lifting all boats by the same amount.” Many non-skilled workers and less-educated residents are still hurting, and one study found nearly half of Ohio households are living paycheck-to-paycheck with little in the way of savings or emergency funds, surveys have indicated.
Kasich trumpets “the Ohio comeback” under his leadership, saying the state has led the Midwest in job creation while building up a budget surplus and cutting taxes. The administration also points out that per-capita income and average wages have risen since 2010 faster than the national averages.
FitzGerald says the state’s wealthiest people and its biggest corporations have benefited the most from tax cuts and other Kasich policies, while “working people are being chased out of the middle class.” Democrats also point to statistics showing that Ohio’s recovery began in 2010, the last year that Kasich’s predecessor, Democrat Ted Strickland, was still governor.
Kasich says continued income tax cuts will put more dollars into the pockets of working Ohioans, and aggressive work by the private JobsOhio agency he created will continue to bring good-pay jobs to Ohio and give major employers incentives to expand in the state. He also is promoting education changes aimed at making sure students are being prepared for modern workforce needs.
FitzGerald says he will help households have more cash by restoring local government funding trimmed from the state budget, which he says has led to local levies for many households in recent years, and make tax changes to help small businesses grow and hire more workers. He also supports expansion of pre-K education to give early starts on their futures to Ohio children.
Andrea Deckard, who left a corporate job to become a stay-at-home mom in suburban Monroe because of family needs, started a website, Savings Lifestyle, during the recession to help people find discounts, freebies and make household changes to stretch their budgets. Her readers and the experiences of her own family of five tell her that times remain tight for many people.
“The economy might be improving somewhat,” said Deckard, “but people don’t have that extra money in their budgets.” In some cases, people who lost jobs during the recession have taken jobs at lower pay or jobs at similar pay but requiring long, gas-sucking commutes, while monthly budgets are squeezed by higher food, gas and home energy costs, she said.
People spend more time shopping for discounts – she said she went a long time when she didn’t buy anything without a coupon – and have given up pleasures that have become luxuries, from annual vacations to cable TV channels, she said.
“I know it doesn’t seem like big sacrifices to people who are really struggling,” Deckard said. “My husband loved to watch ESPN.”
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The second of a series of stories ahead of the November election that look at the health of Ohio’s economy.
Copyright 2014 The Associated Press.