Recession Causes Suffering

More than One Fifth of Ohio’s Preschool Children Poor

     The Ohio Association of Community Action Agencies (OACAA) released in January a new statistical analysis documenting that the recession is causing widespread human suffering in the state of Ohio. In its fourth annual State of Poverty report, OACAA reported that over one-fifth of Ohio’s preschool children are poor, with this fraction rising because of continuing job losses. It can only be deduced that the total number of poor children exceeds 20%, since all Ohio counties have poor families who receive no public assistance.

     The analysis was conducted by George Zeller, senior researcher for the Council for Economic Opportunities in Greater Cleveland (CEOGC), the community action agency serving Cuyahoga County. Zeller points out that income inequality is still rising in Ohio. Incomes rapidly soared during the last 14 years among every one of Ohio’s 15 richest communities where average incomes range between $85,000 and $208,0000. Conversely, incomes fell at the same time in 14 of the state’s 15 poorest communities, where average incomes range between $21, 000 and $27,0000.

     Despite the good 1990’s economy prior to the current recession, the average taxpayer’s income fell during the last 14 years in almost all of Ohio’s urban centers, including Lima, Toledo, Cleveland, Dayton, Mansfield, Youngstown, Warren, Springfield, Akron, Zanesville, Lorain, Canton, Elyria, Middlefield, and Hamilton. Income increases of 8.6% in Cincinnati and 1.0% in Columbus were the only positive exceptions. Incomes stood still in Steubenville.

     In addition to growing inequality, for the first time in history Ohio’s economy suffered from job growth below the national average for six consecutive years between 1991 and 2001. Ohio’s slow job growth rate is now worsening as the economy rapidly shrinks. New claims for unemployment insurance soared in Ohio counties during 2001 by 44%, the fastest rate of worker layoffs the state has experienced since 1980.

Ohio’s economy was in a recession and the state lost jobs throughout 2001. Several sections of Ohio entered the recession during the latter months of 2000, with six counties losing jobs throughout 2000 and 2001. Virtually the entire state is suffering from economic decline.

Cash welfare caseloads declined sharply during all months of the recession in Ohio. Poor families on public assistance lost their cash benefits even as their communities lost jobs. Statewide in Ohio, 72% of all poor children on public assistance no longer receive even a penny of cash assistance.

According to Phil Cole, executive director of the Ohio Association of Community Action Agencies (OACAA), "The best way out of poverty for a family is a good job that pays a living wage. It clearly is alarming that instead of employment growth we are now seeing huge jumps in unemployment claims, job losses, and recession. This means that poverty is growing as incomes fall in our state. It is time for us to assist the victims of the recession, who are suffering today."

Other key findings include:

  ¨ For the first time since World War II, Ohio’s poor face a dramatically negative economy without a safety net. Ohio’s three-year time limits for cash welfare expired in October for most recipients, just as the economic recession gathered steam.

  ¨ Ohio’s official monthly measures of employment completely missed the impact of the recession, and will be downwardly revised early this year to reflect an additional unmeasured loss of 100,000 Ohio jobs. Ohio’s official unemployment figures, which changed little during most of 2001 despite zooming unemployment claims, also failed to detect the recession in a timely manner.

   ¨ The report notes that public policy should begin assisting low-income victims of the current recession. Steps normally taken to assist the jobless during recessions have not been implemented. The state has been in recession for over a year without such policy responses.

Copyright NEOCH published 2002 Issue 53