Four years after the creation of publicly funded economic development agency JobsOhio, Ohio’s job growth has taken a nosedive.
As JobsOhio has awarded hundreds of millions of dollars in targeted loans, grants and tax credits funded with state liquor tax receipts, the state’s private-sector job growth has dropped from above the national average to far below the national average.
Based on seasonally adjusted U.S. Department of Labor data for all 50 states, Ohio’s rate of private-sector job growth from January 2011 through July ranked 28th. Ohio’s labor force shrank by 60,832 during the same period.
Through July, Ohio had gained only 9,500 private-sector jobs this year — a growth rate ranking 41st of the 50 states.
JobsOhio, a quasi-private restructuring of the Ohio Department of Development, has been the centerpiece of Gov. John Kasich’s economic policy since he took office in 2011. Free-market think tank Opportunity Ohio says it’s not working.
In a recent white paper, Opportunity Ohio president Matt Mayer pointed out JobsOhio projections of jobs added or retained through the agency have often exceeded the whole state’s actual employment growth.
“Once you strip away the fancy rhetoric and unprovable claims, JobsOhio is little more than a taxpayer-funded gambling operation that hopes its method of corporate cronyism hits the jackpot enough to hide the bad bets it makes,” Mayer wrote.
The governor’s office did not respond to questions from Ohio Watchdog about JobsOhio, the Opportunity Ohio paper or Ohio’s job creation rate.
While the Kasich administration emphasizes individual JobsOhio success stories in bringing businesses to the state or keeping existing employers from leaving, Department of Labor data show Ohio’s overall economy losing steam after a promising 2011.
Absent a sudden turnaround, 2015 will be Ohio’s worst year since the recession, with fewer jobs created than in 2010 under former governor Ted Strickland.
In March, Kasich noted Ohio had finally reached the break-even point after a net loss of 346,200 jobs during Strickland’s tenure. By July, net private-sector job creation since January 2011 had dropped to 328,200.
JobsOhio, Mayer said in an email to Ohio Watchdog, is fundamentally “no different than every other economic development entity that has or will exist.”
“Government planners will never be good at picking winners and losers no matter how smart or hardworking they might be,” Mayer opined. “Only markets can determine which companies succeed or fail.”
Kasich, a Republican, points to Ohio’s job losses under Strickland, a Democrat, as proof Ohioans should grade on a curve when it comes to the state’s economic recovery.
Strickland “was clearly in over his head, but he was hit by a global tsunami,” Mayer said, calling it “disingenuous” for Kasich’s allies to applaud better job numbers than Strickland’s when Ohio still trails the national average.
Mayer said JobsOhio’s funding would be better directed at infrastructure, education or tax cuts, but he does not expect the Republican-controlled Ohio General Assembly to back away from Kasich’s signature jobs program.
Kasich has ferociously defended JobsOhio for the past four years. In January 2013, Kasich called left-wing activist group ProgressOhio and the libertarian 1851 Center for Constitutional Law “nihilists” for criticizing JobsOhio.
ProgressOhio’s Ohio Supreme Court case against JobsOhio — a taxpayer-funded nonprofit with less transparency than a traditional government agency — was “an effort to destroy jobs in this state,” Kasich said.
Months later, Kasich’s spokesman said Ohio Auditor Dave Yost’s attempts to examine JobsOhio’s books would “kill JobsOhio and its job creation efforts.” Soon after, the General Assembly passed legislation limiting the auditor’s access to JobsOhio records.
On the presidential campaign trail, Kasich has been critical of politicians wooing employers with targeted incentives.
In a Chicago Tribune interview in September, Kasich said Chicago “can’t keep keeping jobs here by passing little sweetheart deals to Sears and anybody else so they don’t leave. This has to be structurally improved.”
A 2012 Dayton Daily News investigation found that JobsOhio approved business incentives totaling almost $500 million in its first year alone.