Ohio’s pandemic recovery lags the country’s

Last week, the Brookings Institution released an analysis of the economic impact of the COVID-19 pandemic on Ohio’s metropolitan areas.

Looking at the two years from February 2020 to March 2022, the analysis tracks 192 U.S. metro areas’ economic trajectory from the beginning of the pandemic until the spring of 2022.

Included in the analysis are eight Ohio metropolitan areas: the “very large” metro areas of Cincinnati, Cleveland, and Columbus, the “large” metro areas of Akron, Dayton, Toledo, and Youngstown, and the “midsize” metro area of Canton.

One of the key indicators analysts at Brookings looked at was job growth. All eight of Ohio’s metro areas had less jobs in March 2022 than in February 2020, reflecting a nationwide trend shared with about two-thirds of the metro areas in the country. 

Columbus was the only metro area in Ohio that landed in the top half nationally for job growth, with 0.7% less jobs in March 2022 than it had it February 2020. Metro areas outside of the “three Cs” fared particularly poorly, all falling in the bottom quartile of metro areas nationally.

Ohio’s metropolitan areas look a lot better from an employment perspective, with every metropolitan area but Cleveland seeing their unemployment rate improve from February 2020 to March 2022. 

Seeing how poorly Ohio’s metropolitan areas fared in job growth, though, suggests unemployment statistics may be driven by other factors rather than people getting jobs who want them. The unemployment rate could also be driven by emigration from the state, early retirement, discouragement and exit from the labor force, or even by deaths of people having trouble getting jobs.

Job posting data tells an interesting story as well. Job postings are up in all eight of Ohio’s metro areas as they are up across the country as well. Canton, Cincinnati, Dayton, Toledo, and Youngstown have seen a moderate increase in job postings compared to national trends. Akron, Cleveland, and Columbus have seen smaller increases in job postings. These likely reflect slower economic recovery in Ohio compared to the rest of the country, likely due to similar factors that have driven slower job growth.

One more interesting statistic from this report is the increase in rent over the past two years. Rents increased in all but two of the 148 metro areas Brookings had data for (San Francisco and San Jose being the exceptions). Ohio’s “three C’s” had slower rent growth than the country, with rents increasing in the 15-17% range. Akron, Dayton, and Toledo, however, saw rent increases more in line with the rest of the country, increasing 20-24% over that time period.

Ohio’s metro areas are doing much better economically than they did in the height of the COVID-19 pandemic, but they still have less jobs than in February 2020 and are lagging behind the country in job postings. While the metropolitan areas can take solace in improved unemployment rates compared to the rest of the country, the reason unemployment is low might not bode well for the future of Ohio’s metropolitan areas.

This commentary first appeared in the Ohio Capital Journal.

Ohio economists agree state tax credit would reduce child poverty

In a survey published by Scioto Analysis this morning, 21 of 23 Ohio economists agreed a state child tax credit would substantially reduce child poverty.

Economists who agreed with the statement said that the magnitude of the reduction in child poverty would depend on the design of the program and whether it was supplemented with other programs such as a federal credit. One noted the evidence of the impacts of a federal credit. Of the two who disagreed with the statement, one said the amount of state child tax credits currently in place would not be enough to lift many children out of poverty.

Of the respondents, 19 of 23 economists agreed the costs of a state child tax credit would be offset over the long term by the benefits of improving outcomes for children. Those who agreed pointed to past research on investment in children, though one economists pointed out that children leaving the state as adults may offset this effect at the state level. One economist uncertain of the impact said that targeting to low-income children would be key to recouping public costs of the program.

Among respondents, 16 of 23 economists disagreed with the claim that parental labor supply would fall significantly due to a child tax credit. Among those who disagreed, some noted that there may be impacts on the labor supply, though that those impacts would be small. One economist who was uncertain noted the importance of the structure of the credit to its impact. One who agreed said the impact would be largest for low-income parents.

The Ohio Economic Experts Panel is a panel of over 40 Ohio Economists from over 30 Ohio higher educational institutions conducted by Scioto Analysis. The goal of the Ohio Economic Experts Panel is to promote better policy outcomes by providing policymakers, policy influencers, and the public with the informed opinions of Ohio’s leading economists.

Energy use in Ohio on the decline

Ohio’s energy economy is changing. To understand how it will change as we approach midcentury, we need to understand how much energy Ohioans will be consuming at that point. To do this, Scioto Analysis has created a simple projection for energy usage in Ohio by midcentury.

According to the Energy Information Administration, energy use in the state of Ohio has fallen in the last 20 years. In 1999 the total energy consumption for the state was 4.2 trillion British Thermal Units. Two decades later, that number has dropped to 3.6 trillion Btus.

How much energy a state consumes is impacted by the population and the state's economic health, the latter of which is often measured by gross domestic product. A state with more people will consume more energy than a state with less people assuming per-capita energy consumption is the same. Similarly, a state with more economic activity will consume more energy than a state with less economic activity since energy use is necessary for manufacturing, distribution, and retail operations.

We created a model to project energy usage based on the past twenty years’ data of population and economic activity, regressing energy usage on year, population, and gross domestic product. Using this model, we project that by the year 2050, Ohio will consume ​​about 2.6 trillion British Thermal Units of energy.

This methodology assumes current energy, population, and GDP trends would continue the way they are. Unexpected events will certainly change these trends. That was demonstrated in the graph below where you can see that  2008 when the recession had dramatic negative effects on energy use. Similarly, there are unexpected events that could impact population growth such as shifts in migration, mortality, or fertility trends.

This decrease in energy use suggests Ohio that is moving to a more energy efficient economy. Public policy decisions over the next thirty years may impact these trends one way or another.

Scioto Analysis releases cost-benefit analysis of urban canopy programs

Scioto Analysis released a cost-benefit analysis on urban canopy coverage goals this morning. Analysts on the project estimate that tree planting will cost Ohio communities $10.29 per tree, while economic present benefits from carbon sequestration, stormwater runoff prevented, air pollution reduced, energy saved, and crime reduced range from about $10-21 per tree depending on the city.

“We found that major cities across the state would experience health, environmental, and crime reduction benefits outweighing the planting and pruning costs of tree canopy programs,” said analyst Madeleine Murphy.

Beyond the economic benefits, analysts found expanding canopy cover by 10% could prevent hundreds of crimes depending on the city, increase home value, and cause a variety of physical and mental health benefits.

“We all know people like to see trees in their neighborhood, but with this study, we have economic evidence of the broader benefits accrued to society because of tree planting programs,” said Scioto Analysis Principal Rob Moore.

This is the latest in a series of demonstration cost-benefit analyses conducted by Scioto Analysis. Past cost-benefit analyses have been conducted on state volunteer programs, school closures for COVID-19, and the state Earned Income Tax Credit.

How can rural Ohio build a tech workforce?

Last month, the Center on Rural Innovation released a report on the rural tech workforce in America.

The report was designed well, combining original surveys of rural adults and employers with a broad labor market dataset and an extensive interview battery to draw insights into what America’s rural tech workforce looks like.

What I found especially compelling about this study was the work the researchers did finding out who was hiring tech workers outside of the tech industry. In particular, they looked at tech workers in banks, education, government, health care, insurance, manufacturing, mining, finance, and utilities.

Something that struck me was that over half of the tech jobs in these non-tech industries were in government and higher education, one industry that constitutes the public sector and another that is heavily influenced by it. All told, there would be over 2,000 more tech jobs across the country in these fields if rural tech employment met the national average.

This makes sense when we think of what rural economies look like. The largest employer in many if not most rural communities are local governments and higher education institutions. These are sectors that (a) are hard to automate workers out of, and (b) generally need people to be available locally to provide services. Funding from the state through school funding formula and through tuition payments often are buoying these occupations.

The occupation group the study identified as having the largest gap between rural tech employment and national tech employment was manufacturing. While the Center on Rural Innovation only identified 15,000 rural tech jobs in the manufacturing sector, it said the sector would have an additional 43,000 tech jobs if its tech employment met the national average.

What kind of jobs specifically are these sectors missing? As far as manufacturers go, the answer is software developers. The researchers identified under 5,000 rural software developers in the manufacturing sector. If there were as many software developers in rural manufacturing as there were in manufacturing across the country as a whole, that number would be over 30,000.

But government had a gap here, too, particularly in employment of people in computer occupations like cybersecurity engineers and computer system engineers and architects. The researchers found less than 5,000 rural workers in these roles in government, a number that would be over 15,000 if rural government computer worker matched the overall rate of government computer worker employment.

Spurring employment in manufacturing and other industries can be difficult for the public sector. Governments in Ohio can do things like support training programs, build tech into k-12 education, and support coworking and accelerators for job creation that can potentially spur some growth, but the impact could be limited.

One place Ohio governments can have an impact right away, though, is in growing their own tech workforce. By hiring more people into cybersecurity and computer system engineering, local governments can make their data more secure, improve their services, and create valuable jobs that give people a reason to live in their communities.

Sometimes the best jobs program is to just hire people.

This commentary first appeared in the Ohio Capital Journal.

Formula shortage exposes familiar weakness in our safety net

Last week, the Ohio Department of Health requested that the U.S. Department of Agriculture and U.S. Department of Health and Human Services allow greater flexibility in its social assistance programs around baby formula.

The program the Ohio Department of Health is most interested in is the Women, Infants, and Children (WIC) program, one of the nation’s most important nutritional programs.

According to the Ohio Department of Health, over 38,000 Ohio women receive WIC benefits per month. These benefits go on to feed over 55,000 infants and over 70,000 children every month.

WIC works differently than the Supplemental Nutrition Assistance Program (SNAP, formerly “food stamps”). While SNAP gives a dollar allotment, WIC gives women a list of foods they are allowed to purchase, much like a rationing system. Women who receive WIC are given a card by the state that they can then use to purchase “authorized foods” and then are asked to refer to a pamphlet detailing these authorized foods when shopping.

The national baby formula shortage is exposing a flaw in the WIC program design. WIC accounts for about half of all formula purchases in the United States, but WIC vouchers generally only allow purchase of one brand of baby formula. This means that if that one provider of baby formula stops producing formula, millions of families across the country suddenly have nowhere to turn to for food for their infants.

Congress has acted quickly to fix this problem with the program and last weekend President Biden signed a bill to expand access to new types of formula. But why does it take an act of Congress for a key nutritional program to provide the most common source of nutrition for infants during a time of crisis?

If you haven’t picked up on this by now, there is a lot of handholding that comes with the WIC program. While WIC provides $140 million in funding for food and nutrition education per year for Ohio families, it also puts strict limits on what can be bought, with the good intention of delivering healthful foods to families.

Contrast this with the Child Tax Credit, a program that provides families with a cash stipend to buy whatever they need to support their family—no strings attached, no reporting.

While WIC is ostensibly the more direct way to support nutrition in families, it was not flexible enough to deal with a quite predictable nutrition problem—a formula shortage—without a Congressional redesign of the program. A recipient of the Child Tax Credit, on the other hand, could spend their dollars on new formula right away if one formula becomes more expensive or runs out.

The formula shortage is a national problem, but more individual problems are happening every day. A bus pass to get to a job across town. Fees for child care expenses. An overdue rent payment. These are all things WIC can’t buy.

This isn’t to say WIC is worse than the alternative of no program at all. But we run the risk of thinking we know more than we do about the future and plight of individual families when we design a program to be as prescriptive as WIC is. 

Maybe in the future we will have a safety net that trusts families to make their own decisions. Maybe then we will have a safety net that doesn’t require acts of cabinet-level state officials and congressional dealmaking to allow access to the basic resources needed for survival in the face of an all-too-predictable crisis.

This commentary first appeared in the Ohio Capital Journal.

An Energy Storage Roadmap for Appalachia

Earlier this month, the Energy Policy Center at Cleveland State University released an energy roadmap for northern Appalachia co-written by Scioto Analysis Principal Rob Moore.

The report catalogues sector assets for the energy storage industry in southeast Ohio, western Pennsylvania, and West Virginia. It also lays out a framework for growing the energy storage industry in northern Appalachia and includes recommendations for policymakers interested in encouraging growth in the energy storage supply chain in the area.

Based on the study team’s research of Northern Appalachian commercial enterprises engaged in the business of energy storage, at least 17,000 workers are employed across over 200 companies.

The study team also identified metropolitan areas in northern Appalachia with concentrations of certain engineering professions, finding a concentration of materials engineers in Erie and Pittsburgh, PA and Youngstown, OH, electrical and mechanical engineers in Pittsburgh and State College, PA, and chemical engineers in Charleston, WV. Northern Appalachia also enjoys a cost of living advantage, with eight metropolitan areas under the national cost of living.

The study also includes recommendations for development of the energy storage industry in Appalachia, including promoting grid and stationary storage in Northern Appalachia, promoting adoption of energy storage in the transportation sector, and funding market validation programs for energy storage startups.

New report finds a gap in high-paying tech jobs in rural America

The Center on Rural Innovation (CORI), with financial support from the Ascendium Education Group, announced the publication of a report on the state of tech employment in rural America earlier this month.

The report concludes a nearly year-long research project involving a national survey of rural adults, a regional survey of rural employers, economic analysis of relevant labor market data collected by EMSI Burning Glass, and more than 50 interviews with tech employers, training providers, workers, and learners. It offers a variety of key findings and strategies that can be useful for local, state, and federal leaders, employers, rural training providers and higher ed institutions, workforce development professionals, funders, and tech workers alike. The research reveals that:

• Rural America is home to half of the tech jobs — about 244,000 — that one would expect to find based on national tech employment patterns and more than 80,000 of the “missing” rural tech jobs are in core non-tech industries such as manufacturing, healthcare, government, and banking.

• Three-quarters of missing tech jobs in core non-tech industries are in roles such as software developers, computer systems analysts, and cybersecurity and systems engineers.

• Nearly 60% of rural Americans are interested in tech jobs and careers.

• Rural tech workers take a variety of paths into the field — half are self-taught, and less than 40% obtained their training via a four-year college or university.

• The two largest barriers to tech training for rural workers are cost and time commitment.

“This report helps to shine new light on the opportunities for rural America to fully participate in the tech economy,” said Mark Rembert, CORI’s director of research and knowledge. “Our research shows that a majority of rural Americans are eager to increase their tech skills, and that there are untapped opportunities for rural employers to create pathways into technology careers.”

“Rural workers are poised to fill tech roles in the fast-growing digital economy,” said Kirstin Yeado, a program officer at Ascendium. “CORI’s research provides employers and rural postsecondary education and workforce development leaders with a resource that illustrates how and why they must work together to help more rural workers – especially those from low-income backgrounds – gain the skills needed to transition to employment in the digital workforce.”

Scioto Analysis consulted on this study, providing feedback as a firm working on economic and public policy development at the state and local level in the United States.

The report is available here.

Ohio economists agree abortion prohibition will decrease women's educational attainment, labor force participation, earnings

In a survey published by Scioto Analysis this morning, 22 of 24 Ohio economists agreed abortion prohibition in Ohio would decrease women’s educational attainment and earnings.

Of the 22 who agreed abortion prohibition would decrease educational attainment, some said the impact would be small, but many cited the literature on the connection between abortion access and educational attainment. Others commented on the tradeoff women face between having children and earning degrees in secondary and higher education. Economists also commented on how low-income women would be affected more directly by a prohibition.

Of the 22 who agreed abortion prohibition would decrease wages, economists commented on the tradeoff women have between working and parenting. They also commented on how much more likely the prohibition would be to impact low-income women’s wages than higher-income women’s wages.

For reasons similar to the other two questions, 20 economists agreed abortion prohibition would decrease women’s labor force participation. Some economists talked about the impact of policy on this relationship, in particular talking about how the lack of access to child care could decrease labor force participation and income support programs with work requirements could increase it.

The Ohio Economic Experts Panel is a panel of over 40 Ohio Economists from over 30 Ohio higher educational institutions conducted by Scioto Analysis. The goal of the Ohio Economic Experts Panel is to promote better policy outcomes by providing policymakers, policy influencers, and the public with the informed opinions of Ohio’s leading economists.

What does the research say on abortion access?

The world shook last week when Politico releases a draft opinion suggesting Roe v. Wade would soon be overturned. Since President Trump installed three new Supreme Court justices on the bench, court watchers have thought the right to privacy and bodily autonomy were at risk. Now we may see a world where protection of that right is no longer guaranteed.

Ohio’s legislative leaders have been especially hostile to abortion rights, instituting restrictions such as mandatory waiting periods, insurance restrictions, mandatory ultrasounds, a 20-week ban, limitation of reasons someone can seek an abortion, and unnecessary physical plant restrictions designed to reduce access to safe and legal abortion. One legislator in Ohio has even put a bill that would authorize any resident of Ohio to act as a “paid bounty hunter,” receiving a guaranteed $10,000 for hunting down and suing doctors providing abortion.

Abortion access is important because of fundamental rights of privacy and bodily autonomy. It also is important because of the measurable impact it has on women’s lives. A brief to the Supreme Court last year signed by 154 economists details the evidence of these impacts.

Abortion legalization gives access to an important form of contraceptive. A seminal study used pre-Roe legalization and trends before and after the Roe v Wade decision to study the impact of Roe on birth. It estimated that a complete national recriminalization of abortion would lead to 440,000 new unwanted pregnancies annually, though the impact would be blunted if some states kept the procedure legal.

Abortion legalization was most crucial for young women and Black women. Even controlling for cultural trends, abortion legalization and guarantee of freedom from parental consent reduced teen motherhood by 34% and teen motherhood by 20%. Black women experienced a 28-40% reduction in maternal mortality due to abortion legalization with better access to quality abortion care.

Abortion legalization improved educational outcomes for women. Black women graduated high school and attended college at rates 22-27% higher due to abortion legalization. Abortion allowed more women to enter the workforce, do more jobs, and earn more as well, especially Black women.

Abortion legalization is important in the face of lack of access to reliable, universally-available contraceptives. Contraceptives are expensive and often not full proof. Often abortion is the last resort option for contraceptive care when all others fail.

Lack of parental leave policy gives women little chance to care for themselves and their family in the case of a pregnancy. Parental leave is scarcely provided for throughout Ohio, especially for lower-income women who are less likely to have access to other forms of contraceptive in the first place.

Abortion legalization is especially key for women in dire economic circumstances. One in two women seeking an abortion are in poverty and three in four are low income. Over half already have children and over half are dealing with disruptive events such as death of a close friend or family member, job loss, end of a relationship with a partner, or mounting rent or mortgage payments.

Abortion legalization is important for access. Making abortion illegal will make it harder for women to obtain necessary care, with mainly only more well-off women having the means to travel for abortion care.

We don’t know exactly what will happen if Roe v. Wade is overturned. But we do have a pretty good idea of what happened after it was put into place. If many in the legislature get their way and make abortion illegal in the state, Ohio’s women will be worse for it.

This commentary first appeared in the Ohio Capital Journal.