COLUMBUS – Lower unemployment has not helped Ohio’s poor escape poverty.
READ MORE: In The Columbus Dispatch
Ohio’s unemployment rate fell 0.3 percent in August to 4.7 percent, the lowest since September 2001 according to figures released Friday morning by the Ohio Department of Job and Family Services.
Employers added 14,600 jobs, led by gains in construction and the service sector, which added 16,500 jobs. Those were offset slightly by losses in manufacturing and government.
According to the state’s data, Ohio added 58,600 over the preceding 12 months, but 26,000 people dropped out of labor force during that period, a trend economists have pointed to as a sign that the state’s recovery is still sluggish, despite the declining jobless rate.
“The drop in the unemployment rate is also good news for the state, but the numbers mask continuing weakness in the labor market. The labor force continues to shrink in Ohio, meaning there are fewer people working or looking for work,” said Hannah Halbert, researcher with Policy Matters Ohio, who says the past year’s growth rate is about half that of the nation.
Ohio remained below the national unemployment rate, which was 5.1 percent last month.
While the state’s unemployment rate sank to 5 percent in July, the poverty rate of 15.8 percent last year was higher than the national rate of 15.5 percent, according to new estimates released on Thursday by the U.S. Census Bureau. For a household of three, the poverty threshold is about $20,000 a year.
The rate of poverty in Ohio in 2014 down slightly from 16 percent in 2013.
Nevertheless, nearly 1.8 million Ohioans lived in households with incomes at or below the federal poverty rate last year. That included nearly 1 in 4 Ohio children — 580,000 youngsters — 36th among states.
That was unchanged since 2013 while, nationally, child poverty declined slightly in 2014, from 21.5 percent in 2013 to 21.1 percent.
Advocates for the poor said at a Statehouse news conference Thursday that low-wage jobs and underemployment were to blame.
“There are several policy tools the state could wield to combat low wages and inequality, and support families in need of opportunity,” said Hannah Halbert, researcher with Policy Matters Ohio. “Raising the minimum wage and supporting collective bargaining can raise too-low wages, and help workers share in our state’s productivity.”
Halbert thinks Congress should make the federal Earned Income Tax Credit and the Child Tax Credit reforms of 2008 and 2009 permanent.
“The data continues to show the struggles of Ohio’s families with rising costs and stagnant wages,” said Phil Cole, executive director of the Ohio Association of Community Action Agencies.
The household median wage in Ohio was $49,308, up from $48,807 in 2013. The national median was $53,657 with Ohio ranked 36th among states.
The poverty rate among African American families in Ohio has increased from 29.3 percent in the depths of the Great Recession to 34.7 percent in 2014. The poverty rate for black children in Ohio is the fifth highest in the nation.
The median African American income was less than 51 percent that whites while the median income for Latinos was about 73 percent.