Ohio ranks among top ten states in the nation for number of companies on the 2010 Inc. 5000 list – but, since 2000, Ohio has lost over 588K private sector jobs - second only to Michigan.

Ohio is one of only two Midwest states that rank among the top ten in the 2010 Inc. 5000 list, sharing the spotlight with Illinois. Why then, since 2000, has Ohio lost over 588K private sector jobs - second only to Michigan?

The Ohio Business Development Coalition says the climate needed for business success is improving in Ohio; and as proof, points to the number of Ohio companies that appear on the 2010 Inc. 5000 list compiled by Inc. magazine. This year Ohio ranks among the annual list’s top ten states in the nation with 186 of the fastest-growing, private companies in America. The Coalition credits this recent success to Ohio’s purposeful redesign of its business climate, making the state an ideal location for businesses to compete in a 21st century global economy.

“Companies in Ohio are able to succeed because of one simple fact: Ohio is a great place to do business,” said Ohio Governor Ted Strickland. “We have reduced taxes and regulations, we have increased the skills and education of our workforce and the fact that Ohio continues to be recognized by some of the nation’s leading business publications is evidence that our economic development plan is working.”

Ohio is one of only two Midwest states that rank among the top ten, sharing the spotlight with Illinois, which had 222 companies features on the Inc. 5000 list. Ohio lawmakers believe that this is irrefutable proof that they have dramatically revamped the state’s tax structure, creating the lowest rates in the Midwest and an extremely profit-friendly business climate for companies that locate in Ohio.

“Ohio’s business redesign includes strategic tax reform that encourages global success and makes the state an ideal location to profitably compete from in the global marketplace,” said Ed Burghard, executive director of the Ohio Business Development Coalition. “This perfect balance translates into improved profit margin for Ohio based companies.”

BUT. Something’s amiss. Should fast growing businesses factor to loss of jobs?

According to Mary McCleary at the Buckeye Institute, “Since March 2000, Ohio has lost 588,600 private sector jobs (second only to Michigan).  Of these job losses, 137,000 occurred after ARRA went into effect. Ohio has lost 386,800 jobs since Governor Ted Strickland took over.”

It seems that if the redesign of its business climate coupled with “stimulus” spending isn’t helping Ohio create jobs for Ohioans, what will? The Buckeye Institute offers four needed reforms to bring jobs back to Ohio…

• Broad-base tax reform. – The Ohio Business Development Coalition tauts Ohio’s revamped tax system that now provides the lowest taxes in the Midwest. But nationwide, Ohio has the seventh highest state and local tax burden. High taxes hurt economic growth and give companies an incentive to locate to lower tax states.
• Regulatory reform. – The Ohio Business Development Coalition tauts an extremely profit-friendly business climate; a kinder, more gentle state for companies that locate here. But the facts are that Ohio’s burdensome environmental, employment, and workman’s compensation regulations dramatically increase the cost of doing business here over most other states. Just recently, Continental Plastics moved to Indiana to avoid an Ohio EPA regulation would have cost the company $500,000 in additional operating costs each year. The move cost Toledo over 200 jobs.  According to the Toledo Blade, since 2000, about 140 factories have closed in northwest Ohio with a majority relocating to the southern United States. In fact, 20 major companies over the last ten years have left Ohio for Atlanta, Georgia. (Note that these moves are being made to other U.S. states, not Mexico, China, or India. Ohioans are competing with other Americans for jobs – and we’re losing.)
• Right-to-work reform. – Ohio does not protect a worker’s freedom to choose whether or not to join a union to obtain employment. Over the last 20 years, right-to-work states have added and sustained jobs twice as fast as forced unionization states like Ohio – even after large housing-related job losses in Arizona, Florida, and Nevada. The 15 worst states for job growth since January 1990 are all forced unionization states, while 11 of the 15 top states are right-to-work states.  (In the 28 Non-Right-to-Work states including Ohio, it is legal for a union to require all workers covered by the union to pay the union dues as a condition of employment.  If the workers refuse to pay, the union can have them fired.) 
• Budget reform.  – Ohio currently faces an estimated $8.4 billion budget deficit. In a state already struggling, raising taxes is not a viable option for recovery. The budget must be realigned to fit the economic conditions of the time. To minimize the effect on our vulnerable populations, the compensation of government workers cannot be taken off the table. If state government worker compensation is realigned to match the private sector, the state could save over $2 billion dollars in the next budget.  

There is no doubt that Ohio lawmakers have made some strides to make Ohio more business friendly since 2005, just as they say; but we are still light years away from true reform. Columbus still has one foot in the past when Ohio workers didn’t have to compete with the world for jobs. Automakers and steel producers were our golden geese. Labor unions and Columbus could dictate their terms and company management had to accept because they had no choice. Today, they have choices aplenty, and Ohio is most often not one of them. Ohio’s golden goose has been carved and eaten – it’s time to clear the table and realize that profitability does not equal greed; profitibility equals jobs.

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