After unprecedented losses in the labor market in April, the Dayton region has regained jobs at a faster pace than most of Ohio’s major metro areas.
But some researchers and local leaders say trouble could lie ahead for the state and regional labor markets because the loss of federal financial assistance might lead to a significant reduction in consumer spending.
Many small businesses are on the edge of collapse, and the recent expiration of the enhanced unemployment benefits (the $600 weekly add-on payments for jobless workers) and the end of the Paycheck Protection Program are going to have a large local impact, Dayton Mayor Nan Whaley said.
“It is going to be worse than April to August because of the lack of action by the federal government,” Whaley said.
Payrolls in the Dayton metro area grew 1.5% in July, after increasing 3.6% in June and 2.4% in May, according to the bureau’s labor data.
Employment in the metro area ― which consists of Montgomery, Miami and Greene counties ― declined 11.6% in April and 0.4% in March, after large parts of the state’s economy were shut down due to the pandemic.
April’s losses far exceeded any other month on record, and the Dayton region lost a combined 46,900 jobs in March and April.
Since May, the region has added back 26,100 jobs, or nearly 56% of the total wiped out the preceding two months. The Dayton region has fared better than other parts of the state in this respect.
The state has regained only 44.4% of the jobs that were lost in April and March, according to this newspaper’s analysis of federal labor data, while Cleveland and Columbus recovered 30.2% and 33.5% of the jobs they lost, respectively.
Youngstown regained 34.4% of its job losses; Akron, 41.3%; Canton, 41.4%; and Cincinnati, 52.7%. Toledo has done the best of the large metros by managing to build back nearly 58% of its job losses.
April’s job losses were catastrophic and were the largest ever in a single month, said George Zeller, an economic research analyst in Cleveland.
The state’s economy is recovering, but Zeller said it’s happening at an “alarmingly” slow pace.
Ohio’s job losses were so disastrous in April that even fairly strong growth will not bring employment back to pre-COVID-19 levels, said Zach Schiller, research director with liberal-leaning Policy Matters Ohio.
“While nobody knows for sure what the trajectory of the recovery will be, it seems pretty clear it will be a long one,” Schiller said.
But the good news is that the Dayton region’s employment decline in April (-11.6%) was the least severe of all metro areas in the state, meaning local employment has had a smaller hole to climb out of.
In April, payrolls shrank between 13.4% to 17.5% in Akron, Canton, Cincinnati, Cleveland, Columbus, Toledo and Youngstown. Statewide, employment contracted by more than 15% that month.
Even though Ohio’s cities, the state and the nation saw massive job losses in the early months of the outbreak, consumer spending did not plunge in the following months because of funding assistance approved by federal lawmakers, Schiller said, including enhanced jobless benefits and the Paycheck Protection Program.
But those programs have ended and there could be a large decrease in consumer spending that has the potential to lead to more layoffs and economic troubles, Schiller said.
Consumer spending accounts for about 70% of the U.S. economy, researchers said.
“I anticipate that with the reduced federal assistance that job growth, at the very least, will slow, because this has a macro-economic affect,” Schiller said.
More than 452,000 jobless Ohioans received continued unemployment benefits in the second to last week of July, according to state data, which means the $600 in additional unemployment benefits put more than $271 million that week into people’s pockets and the state economy.
Schiller, however, cautioned against reading too much into the labor data because the estimates undergo significant revisions and are bound to change.
The rapid economic recovery has definitely slowed in the second half of summer, said Rea Hederman Jr., executive director of the Economic Research Center and vice president of policy at the Buckeye Institute, a conservative-leaning think tank.
While it’s encouraging that many of the jobs lost during the height of the pandemic have returned in a few months, it is going to take longer to return to full employment, he said.
“What we’re seeing now is that some temporary layoffs have become permanent as some businesses have closed or have had to operate at a reduced capacity with fewer employees,” Hederman said.
Major urban areas that greater rely on tourism, recreation and business travel will take longer to recover, Hederman said.
The leisure and hospitality sector lost over half its jobs in Ohio, he said, but Dayton has fewer workers in that sector compared to the Cleveland, Columbus and Cincinnati, which is one reason Dayton has bounced back quickly.
“Since Dayton has had a smaller share of workers in that sector, it has not been hit as hard as some other parts of Ohio,” he said.
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