A Few Educated Millennials, But Far More Human Misery: The Economy in Cleveland And Ohio

2015-01-11T12:15:57+00:00 October 8th, 2014|

George Zeller

It is tempting to be excited about what is happening in the Rust Belt: the region seems to have more energy and zest than it did ten years ago. In Cleveland and Northeast Ohio, we hear a lot of talk about a “turnaround”: the Republicans, LeBron, and educated millennials are coming here; new hip spots are opening. This poor, struggling region is coming back, right?

Not if you look at the numbers. Bits of good news — as  welcome as they may be — are dwarfed by a relentlessly bleak economic reality. The numbers are bad — and getting worse — and the suffering behind those numbers is more wretched.  To this human misery more attention must be paid.

Let’s start with the five-county Cleveland region, consisting of Cuyahoga, Lake, Medina, Geauga, and Lorain Counties. There are 48,419 fewer jobs in this region than in 2007. Cuyahoga County, where Cleveland is located, has lost 33,546 jobs since 2007 — for a total of 108,664 jobs gone since 2000.

Why is this region continuing to lose jobs despite a supposed economic recovery nationally and at home? One reason is that Ohio was hit by a recession long before the rest of the nation: the recession started here in 2000, well before the 2007 national “Great Recession.” And it lasted an entire decade, until 2010. Since 2010, the recovery has been continuously and painfully slow. As a result, Ohio still has 399,792 fewer jobs today than it had in 2000. Northeast Ohio has lagged behind the state: the 16 counties of northeast Ohio currently have 99,772 fewer jobs than they had only seven years ago in 2007. Of those 16 counties, only one, Carroll County, has recovered all of the jobs that it lost as a result of the “Great Recession.”

Such figures should be kept in the forefront of our minds when we celebrate new developments and start-ups. Like this one: in the past 7 years, Northeast Ohio has lost almost 100,000 jobs. We may have gained more craft brewers and millennials with college degrees, but many more people have entered the ranks of the unemployed.  The most quantitative addition to the region has been poverty and human misery, not hipsters.

Ohio has finally begun to recover from the “Great Recession,” but the recovery has been too slow for hundreds of thousands of Ohio workers who lost their jobs and who still cannot find a new job. And the most recent numbers show no cause for optimism: in July 2014 Ohio lost more jobs than any other state in the United States. In August things barely improved, as Ohio gained only 200 jobs, meaning that Ohio’s summer job growth was a barely detectable 200 jobs. August 2014 was the 22nd consecutive month when Ohio’s sub-par job growth was below the United States national average.

As a result of this catastrophic massive job loss and then the catastrophic extremely slow recovery, hundreds of thousands of Ohio workers and hundreds of thousands of northeast Ohio workers are suffering because their incomes have fallen to zero.

Also, the average wage paid to an Ohio worker fell during all four quarters of 2013. So, not only has human suffering skyrocketed in Ohio among the hundreds of thousands of families where workers lost their jobs, but for the 2,344,397 Ohio workers who still are employed, wages are still being cut.

What has been our response to this catastrophic situation? The Congress in Washington eliminated extended unemployment benefits, so that no jobless Ohio worker collected extended unemployment benefits last week. Further, the state of Ohio and the federal government intentionally slowed down the recovery by eliminating governmental stimulus to the labor market. Among all industries in Ohio, the largest job losses have been from the elimination of federal, state, and local government jobs as government spending was cut. Taxes were cut too, primarily for affluent taxpayers.

Cutting spending during a bad recession is proven disastrous public policy. It is the same thing that was done in 1929 and caused the Great Depression. We constantly see calls for additional spending cuts, both in Washington and in Columbus. Those cuts will cause even more Ohioans to suffer even longer.

These policies are dangerous. The single-minded focus of public policy in both Washington and Columbus must be a large increase in spending, immediately. Timing is critical, since we are in danger of another recession: the stock market might tank again, and the Federal Reserve Board may raise interest rates.

In the meantime, our policies and our discussions must include more compassion for and attention to the plight of Ohioans. Go ahead and celebrate those who are creating a few new jobs in the region and the supposed brain gain. But only if  we simultaneously and more urgently call attention to and advocate for those who continue to suffer, and who have been long suffering. Every day more people in our community become unemployed; every day, more children fall into poverty. Things are far worse than they were ten years ago for the vast majority of those living in our region.

These stark and unconsoling numbers are harder to read — and less fun to share on Facebook — than the good news. But these are the fundamental facts we must attend to, immediately.

George Zeller is an Economic Research Analyst

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  1. Carter October 8, 2014 at 3:24 pm - Reply

    Can we get a link or citation for all the numbers? I just want to take a look at them and maybe make a graph or two.

  2. Shannise October 8, 2014 at 4:44 pm - Reply

    It doesn’t have to be pointed it out. It is obvious that there is a great deal of exclusion going on, but asking to be included will get you know where. We have to speak and write with confidence that we have something to bring to the table. The disenfranchised outnumber the educated hipsters.

  3. Anne Trubek October 8, 2014 at 4:47 pm - Reply

    Citations and sources are available on Mr. Zeller’s website: http://www.georgezeller.com/homepag2.htm

  4. Jimmy October 8, 2014 at 10:11 pm - Reply

    But isn’t it cool that Crop opened a new spot in University Circle? Go CLE!

  5. andy October 9, 2014 at 2:35 am - Reply

    You know what, No. Ohio has had nothing but doom and gloom for as long as I can remember. If people want to be excited and enthusiastic about their region, maybe that is half the battle. While no one has any doubt that your numbers are correct (although mostly dated), we’ve also had them shoved down our throat our entire lives. You bring up some great points, but they are lost in the tone you set at the beginning of the article.

    • Steve October 9, 2014 at 2:29 pm - Reply

      People can be excited and enthusiastic about their region. But they should do it in a manner of “holy f, this area needs some real help and we’re going to be the ones to do it!” and not cheerleading on bad numbers from the sidelines.

      I’ve come to the conclusion that Clevelanders are not the hard-working, pick-yourself-up-by-the-bootstrap good Midwestern folk they claim to be. If they were, they’d do a gosh darn thing to improve their city and not just whine about it.

  6. Angie Schmitt October 9, 2014 at 10:28 am - Reply

    I love the people that dismiss this whole argument. Where is our compassion for people that are suffering in our own community? How could anyone deny that deindustrialization has touched many people’s lives, for the worse? Don’t people ever drive through Buckeye or Glenville or East Cleveland? Have we become blind? Does that start to seem normal after a while? There’s something sick about this collective sense of denial we have. For the people who are privileged enough to have avoided some of this economic pain to turn around and deny the obvious pain being experienced by others. Man, it blows my mind.

    • Rajvi White October 9, 2014 at 11:15 am - Reply

      Who has ever denied the effects of de-industrialization? I think it’s a pretty widely accepted and recognized issue.

      • jgk October 14, 2014 at 1:24 pm - Reply

        I’ve never met anyone from Cleveland who is dismissive about the decline in the region’s economy. It’s been an obvious, undeniable fact for my entire life (I’m 50). But, as with any other state of affairs that continues for a long time, one gets accustomed to it, and it does become “normal.” That isn’t denial as much as resignation in the face of what seems like an intractable series of problems. It’s also normal for people who have been steeped in bad news to want to celebrate even small victories.

  7. anidea October 10, 2014 at 10:43 am - Reply

    I think Mr. Zeller’s analysis suggests that we need some fundamental change to the basis of our region’s economy. That’s where the (limited, but still encouraging) good news about better educated millennials comes in. They have the potential to finally help turn this region into a knowledge-based economy. The economy that made this region prosperous in the mid-20th century has sailed to other shores. We need to catch up with the rest of the country. Government policies, programs, and dollars can help solve some of the dislocation problems created by the changes we’ve been experiencing over the last 30 – 40 years, but they won’t bring back a former economy.

    • Brian M July 23, 2015 at 9:16 pm - Reply

      What does “knowledge based economy” even mean? More startups that “design aps that turn your cell phone screens different colors to reflect your mood”. More software to make it easier for the top 5% to “be served”?

      Count me skeptical.

  8. Average Slavic Villager October 10, 2014 at 2:28 pm - Reply

    It’s really 2 cohorts shaping Cle today:
    1. Hyper educated (Brain Gain and 3rd World immigrants), who tend to marry each other and magnify the class divide.
    2. Under-educated low classes who try valiantly to cobble an alternative economy through service- and under-table work, govt payments, shared housing, etc.

    Ironically, both grps are generally working quite hard at what they’re doing.

    The gd news: Millenial achievers have largely rejected sprawl and chosen to live in the city. Long term, this will lead to a healthier, more integrated economy.

    • Varina8 October 10, 2014 at 6:00 pm - Reply

      I think you’re right about the long-term gains, ASV. That’s how it worked out here in the Seattle area, where I arrived from Ohio in 1980 to find the job picture still not recovered from the Boeing bust and 11% unemployment. At that time, it seemed like every third person I met was from Ohio, Michigan or Indiana. Lately, a number of younger friends who fall into both your catagories have begun looking to migrate to the urban Rust Belt because the cost of living here has become unbearable. Some are the children or grandchildren of people originally from the area. Therer are a lot of challenges to Cleveland’s recovery but I think the population trends that you cite — and the region’s fresh water resources in the face of climate change — give reasons for optimism.

  9. Mike October 20, 2014 at 10:23 pm - Reply

    Interesting points, AVS, but the millenials I see are flocking to a handful of hyper-expensive, trendy, four or five-block-wide hipster enclaves like Ohio City, Tremont and Gordon Square. You don’t see many moving into less trendy, more rough and tumble neighborhoods like the area between Gordon Square and the western edge of Lakewood, East 55th and St. Clair, the southwest side or similar parts of town. What happens when the millenials’ trust fund money runs out, they have to get real jobs and end up moving to one of the suburbs?

    • average Slavic Villager October 23, 2014 at 1:31 pm - Reply

      Why cities need smart Millenials (see recent NYT, quoted in latest Fresh Water):

      There is a very strong track record of places that attract talent becoming places of long-term success,” said Edward Glaeser, an economist at Harvard and author of “Triumph of the City.” “The most successful economic development policy is to attract and retain smart people and then get out of their way.”

      The economic effects reach beyond the work the young people do, according to Enrico Moretti, an economist at the University of California, Berkeley, and author of “The New Geography of Jobs.” For every college graduate who takes a job in an innovation industry, he found, five additional jobs are eventually created in that city, such as for waiters, carpenters, doctors, architects and teachers.

      “It’s a type of growth that feeds on itself — the more young workers you have, the more companies are interested in locating their operations in that area and the more young people are going to move there,” he said.

  10. Minuteman December 13, 2014 at 8:18 am - Reply

    I sympathize with the sentiments expressed in this article, other than going deeper into debt to fund unemployment benefits.
    A more practical application of funds is to upgrade our crumbling infrastructure, roads, bridges, railroads, public buildings with the labor of unemployed Ohioans, not more hand outs.

  11. mary February 7, 2016 at 5:19 pm - Reply

    I think we need more public money invested in education, job training and infrastructure rebuilding. This would provide good paying jobs and equip people with the skills they need to have a secure financial future. Then they will be able to buy homes and spend in our local economy. Our society has chosen tax cuts instead of investment in people and communities. We also need to recognize that pursuing a blue collar or technical job is just as valuable as pursuing a liberal arts education.

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