Recession still felt across rural Ohio

If you live in rural America, chances are you’re still feeling pangs from the great recession.

According to an analysis recently released from the Department of Agriculture, rural areas are still struggling to attain pre-recession employment levels while urban areas already have outpaced their 2007 selves.

Rural employment in mid-2015 was still 3.2 percent below its pre-recession peak in 2007, according to “Rural America at a Glance.” While the report didn't look at specific states, rural Ohio has had the same troubles, said Appalachian Partnership for Economic Growth CEO John Molinaro.

"Part of it is that rural areas don't generally have the same resources to apply to economic development as their urban counterparts ... We (rural areas) simply don't have the same degree of staffing or budget to work on economic development," said Molinaro, who has worked in rural economic development for more than 20 years.

Appalachia's unemployment is consistently at least a point higher than the rest of the state and close to two points higher than the Columbus area, which has seen some of the state's fastest growth. In October, the most recent rates available, unemployment for Ohio's 32 Appalachian counties was 5.2 percent while the rate was 4 percent for the remaining 56 counties. Unemployment for the Columbus metropolitan area, which includes Franklin County and nine surrounding counties, was even lower at 3.6 percent.

Money for economic development often comes down to local government coffers and major corporation investment. However, some states have developed a more steady funding stream to even the playing field. Molinaro pointed to Texas where counties can put on a local sales tax and those funds can only be used for economic development.

Although money continues to be an issue, JobsOhio, a private non-profit corporation funded with state liquor profits to drive job creation and new capital investment in Ohio, has divided the state into six regions and aligned with regional economic development partners to target employer recruitment. The approach means there are areas of Ohio, especially rural ones, where for the first time, someone is actively reaching out to employers to locate in the area, Molinaro said.

There is some indication that rural job growth may be picking up the pace. Employment grew more than 1 percent during the year that ended after the second quarter of 2015; a “marked improvement,” according to the USDA report.

Despite slow job growth in rural America, its unemployment rates have dropped alongside urban areas. That’s because the population and labor force has stayed flat, according to the report. However, in urban areas, job growth has been fast enough to recover and make up for increased demand from jobs with a growing population and labor force.

Ohio’s job picture moving into the final months of this year are promising. In October, the private sector added 36,300 new jobs, making it the largest one-month jump in more than 17 years, according to the Buckeye Institute, a conservative, nonpartisan think-tank.

Ohio’s unemployment also fell to 4.4 percent in October, the lowest in 14 years. And although 38 counties had been chasing pre-recession unemployment rates in 2014, as of October, unemployment rates in all 88 counties were better than they saw in 2007, according to data from the Bureau of Labor Statistics.

“These numbers warrant cautious optimism,” said Joe Nichols, a fellow at The Buckeye Institute. “The October report is encouraging, of course, but will only be meaningful if it indicates a larger trend, which has failed to materialize in 2015.”

Appalachia continues to struggle the most in Ohio. It's had the least amount of new job growth so far this year, with 478 new jobs reported by Molinaro's group, which was a 44 percent decrease from the first three quarters of 2014. While job growth is slower in Appalachia, capital investments of $2.2 billion in all of 2014 outpaced all other regions and continues to be strong this year with $943 million so far.

According to Molinaro, the biggest disadvantage in Appalachia is the lack of development sites that have capacity for water and other utilities and, sometimes even an existing building. Strip mined areas also often need extra work to stabilize the soil for construction. As such, making moves to the area can be more costly for a business.

However, Ohio is well-positioned for manufacturing growth as companies reassess where they are making their products, weighing labor costs against transportation costs, Molinaro said. For example, it's not necessarily economically beneficial anymore to harvest logs from Ohio that are shipped to China where they are made into products that are just shipped back to America, he added.

Ohio is geographically positioned to help keep transportation costs low — it's within a one-day drive of 60 percent of the north American market and also has rail and barge transportation available. For Molinaro, when you couple the transportation amenities with Ohio's experienced manufacturing workforce, it makes for a great sales pitch when recruiting companies.