How do we get the economy to boom for all in Dayton region?

When it comes to jobs, the Dayton of yesterday – a manufacturing mecca dominated by big automobile companies paying top wages – will never be the Dayton of tomorrow.

The nation’s long, steady economic recovery is bringing good economic news to our region, with the unemployment rate dropping and businesses hiring more workers.

But there are serious concerns that could keep the region from reaching its full potential. Businesses complain they’re leaving work on the table because they can’t find workers. Many local counties — including Montgomery County — haven’t fully recovered the job losses suffered during the Great Recession. And the high-paying, unionized factory jobs that once defined labor in the Midwest have been replaced in many cases by lower-paying jobs in factories, warehouses, stores, restaurants and the service industry.

“We are thrilled with the unemployment rate,” said Montgomery County Commissioner Debbie Lieberman. “But we also are aware that we need to continue to bring jobs here that are living wage jobs.”

Consider this: The average wage in Montgomery, Greene and Miami counties is less than it was in 2007, when the cost of living was much lower. Today, seven of the 10 most common jobs in those counties pay too little to feed a family of three, according to a study by Policy Matters Ohio using government data.

More than a third of Dayton residents live in poverty, according to the U.S. Census Bureau.

“People have actually lost ground,” said Hannah Halbert, project director of Policy Matters Ohio, a Cleveland-based non-profit, liberal-leaning think tank. “It’s not the kind of progress that you would expect to see.”

The result is a recovery that shows real progress but is leaving many people behind. And when our residents struggle financially, it impacts all of us — through the toll brought on by economic hardship and tax outlays for public assistance. It also dampens the recovery by making it harder for people to afford houses, cars and other consumer goods that fuel a robust economy.

That’s troubling for those of us who love the area and want it to thrive.

The desire to make this community the best it can possibly be is what drove the Dayton Daily News to launch The Path Forward, which is a focused effort on finding solutions to the region's most important problems. In addition to the economy, the team is investigating ways to tackle the addiction crisis and challenges facing Dayton schools.

As part of our efforts, we’ve formed a community advisory board, gathered data from multiple sources, interviewed experts both locally and nationally and engaged the region in a discussion of what is working, what isn’t working and what could work if we gave it a try.

There are no easy answers. Some of these problems are legacy issues with long coattails, such as poverty and family dysfunction. But while the problems are many, there also is no shortage of people wanting to help. This project is aimed at coordinating that effort and channeling some of those ideas into solutions that not only improve the community, but better the lives of those lucky enough to call this place home.

Strategies for growth

So, how can we get more and better jobs here?

Local economic leaders say there are several keys:

• Resolve workforce issues to better align skills with job openings and help people afford the training they need to advance.

• Protect and leverage Wright-Patterson Air Force Base, particularly if federal officials begin considering another round of base closures through a process known as BRAC.

• Focus retention and development efforts on aerospace and defense, advanced manufacturing, logistics and bioscience and advanced data management.

• Maximize job opportunities in the health care industry.

• Create an environment in which small businesses and entrepreneurs can flourish.

Jeff Hoagland, president and chief executive of the Dayton Development Coalition, said companies come to this area for a variety of reasons, including the location — putting them within 60 percent of the U.S. and Canadian population in a day — the availability of workers and the overall low cost of doing business. Education options and quality of life also play a role, and development officials are quick to point to the region’s inexpensive housing, thriving arts scene and robust parks system.

Businesses will always be guided by their own specific needs and financial issues, but local officials say they work to attract and keep companies here by being ready to help with challenges — from site selection to tax incentives to workforce training.

Chris Kershner, executive vice president of the Dayton Area Chamber of Commerce, said the region has emerged from an era when it was too dependent on the auto industry and is now much more diverse.

“What happened with Delphi and GM was a global economic crisis where automotive companies were divested,” he said. “We might have felt a little more pain than others, because we had a lot of eggs in that basket.”

One change development officials say is needed is more intangible than providing tax incentives or making infrastructure improvements. The region, said Hoagland, needs an image makeover.

“Misconceptions about the region are the most common reason companies don’t choose our community,” said Hoagland, whose coalition is the publicly funded western regional partner of the state’s privatized economic development arm, JobsOhio.

Some of those who decide against locating in the Dayton region don’t understand how big and diverse it is, how skilled the workforce is and what a good place it is to live here, according to Hoagland.

“If they knew more about Dayton I believe they would choose to locate here,” he said.

Retired Air Force Col. Cassie Barlow chose to stay in the Dayton region after retiring in 2014 as 88th Air Base Wing Commander at Wright-Patterson Air Force Base. She believes the region needs to unite behind a targeted marketing effort to draw more residents to live and work here.

“I would argue that from a workforce standpoint if we are not attracting people and workforce with the same emphasis that we are using to attract businesses, what are people going to do when they get here? They’re not going to find the people they need,” said Barlow, chief operating officer of the Southwestern Ohio Council for Higher Education (SOCHE).

Barlow said it is time for us to stop being “humble Midwesterners,” get over the fact that we don’t have any mountains and oceans to tout and start bragging about what we do have in a targeted social media and marketing effort.

“Think about the power of all of our Miami Valley region counties coming together to attract and doing it together,” said Barlow, who sits on the newspaper’s advisory board. “That’s one area where we could get a lot better. If we could figure that out that would be a huge game changer.”

Making the most of what works

Part of the solution to building a better economy is leveraging what is working. In other words, build on the success stories and use them to mitigate setbacks, such as when Teradata this summer announced it would move its corporate headquarters — and more than 300 jobs — from Miami Twp. to San Diego.

There are plenty of success stories.

Our region has gained headquarters like Verso Corp. in Miamisburg and NDC Technologies in Huber Heights.

We’ve won new auto industry supply companies, including Fuyao Glass America, which employs 2,300 people in the former General Motors plant in Moraine and has plans to add 700 more in the next three years.

Credit: DaytonDailyNews

Topre America Ohio built on the site of a former International Harvester factory that closed in Springfield.

Whirlpool expanded its distribution center in Greenville and Airstream expanded its production facility in Jackson Center.

Partnerships with the University of Dayton brought two research centers — General Electric EPISCenter and the Emerson’s Helix Innovation Center — to Dayton.

The region’s largest employer and linchpin of aerospace and defense industry economic development efforts is Wright-Patterson Air Force Base, which employs 27,500 people, boasts an annual payroll of $2.23 billion and indirectly creates an estimated 34,560 additional jobs, according to the development coalition.

Although Premier Health decided to close Good Samaritan Hospital in northwest Dayton, health care job growth in general is red-hot. CareSource is adding jobs in downtown Dayton, and the major hospital systems — Premier and Kettering Health Network – are expanding their main campuses and satellite operations across the region.

The region as a whole has added jobs since the recession, thanks largely to Warren County, which gained 8,356 jobs between 2008 and 2017. Montgomery County lost 6,058 during that same time period, according to the U.S. Bureau of Labor Statistics.

Although wages overall are down, some commonly held jobs pay particularly well. Registered nurses rank as the second largest occupation in the Dayton metropolitan area, and their $65,260 median annual wage is the highest among the top 10 most common jobs, according to the Policy Matters Ohio study of 2017 data.

The Path Forward: Jobs and the economy

Steve Staub, co-owner of Staub Manufacturing Solutions of Dayton, credits the 2017 federal tax cut with jump-starting the economy.

“It really started last fall when the tax reform kept being talked about,” said Staub, whose company fabricates metal components using laser cutting machines. “And once the tax reform passed that was like rocket fuel for our industry.”

But others say they’ve yet to experience the economic upturn.

Khiry Veney, 26, of Fairborn, is saving money in hopes of returning to college and becoming a teacher. He has tried a variety of jobs — customer service, retail, restaurants, bar tending — in the six years since he left the Army National Guard. What those jobs have in common is the pay is often low and the hours part-time, allowing the companies to avoid paying health care costs.

Credit: Lynn Hulsey

“If sales are up, hours are up. If we’re not getting business, hours are down,” Veney said. “So it’s not reliable. I have to make money to survive.”

Where are the workers?

The brutal double-digit unemployment of the recession’s aftermath are behind us, and Ohio’s June jobless rate of 4.5 percent is a far cry from the 11.1 percent posted in January 2010. But Ohio’s June rate still tied for the 40th worst in the country. The national unemployment rate was 4 percent.

Local officials say the labor market has tightened so much that companies complain they can’t find qualified workers.

“That’s the number one thing we’re hearing,” said Shannon Bryant, interim vice president for workforce development at Sinclair Community College.

Michael Bridges, founder and president of the cyber-solutions and engineering firm, Peerless Technologies Corp. in Fairborn, said his high-paying jobs are hard to fill because so many companies want workers with science, technology, engineering and math skills.

Meanwhile, as employers like Peerless, which specializes in federal government contracting, struggle to find skilled workers, Staub points to another problem: filling entry level jobs. Starting pay for jobs grinding metal in his shop is $15 an hour with full benefits, he said, but the company has had to work hard to fill those positions.

Some of that may be due to a community that is still reeling from an addiction crisis and a need for basic workplace training, what some refer to as “soft skills.”

"Now you've got to have a good attitude and you've got to be drug free and you've got to show up for work every day and be willing to learn," said Staub. "There's so many opportunities in the manufacturing industry to earn a good solid career and living to provide for your family."

Fuyao also grapples with attracting workers to the Chinese-owned automotive windshield plant, said President Jeff Liu. Starting pay for production workers at Fuyao is $14 an hour with full benefits, an 84 cent raise after they make probation and annual raises, Liu said. Most of the workers — about 20 percent of whom come from previous auto industry jobs — make about $17 hourly on average, he said, and white-collar jobs pay more.

Liu said he is working on ways to attract more employees — including offering subsidized lunches and possibly tuition reimbursement — and is also focusing on improving safety and relations between supervisors and workers in the wake of an unsuccessful organizing drive by the United Auto Workers last year.

“We’re going to make all of these changes, improvements,” Liu said. “We work together. We make a profit and we’re going to share the profits with all the employees.”

Wage stagnation persists

Some say there would be no worker shortage if companies offered better pay and benefits, gave people full-time work hours and didn’t rely on temporary staffing services to fill jobs.

“I see more and more changing of jobs, trying to find something better,” said Tom Ritchie Sr., president of the Miami Valley AFL-CIO. “They find a job that exists and they pray for an opportunity for promotion or a better job somewhere else.”

Added Michael Shields, a workforce researcher at Policy Matters Ohio: “We still have some lingering concerns, and one of the substantial concerns is that wages have not grown in tandem either with productivity or the growth of the state economy.”

The wage stagnation that has held down worker gains across the U.S. can be seen in the government data gleaned from this region. Average weekly earnings in the Dayton Metropolitan Statistical Area, which includes Montgomery, Greene and Miami counties, declined to $744 in 2017, down from $918 in 2007, according to inflation-adjusted data from the U.S. Bureau of Labor Statistics. That means the average worker brings home $174 less each week to pay for food, housing, heat, transportation and all the other costs that have gone up in the last 10 years.

Slight wage gains in May for Dayton area workers came with a much larger jump in average hours, indicating that people are making more by working more hours, not because they are getting a big raise, said Bill Adams, senior economist at PNC Financial Services Group.

“Wages have really been the missing ingredient for this long recovery, not just in Ohio but nationally,” Adams said.

“We are optimistic we will see more wage growth in the next few quarters because of the tight job market.”

The Path Forward

In launching The Path Forward, the newspaper is attempting to bring people together around a singular vision to help the community prosper.

To help reach that goal, experts say people need to have access to the type of training that will give them the skills they need to prepare them for the jobs that are already here and the ones that may be coming.

The effort, they said, should begin long before students graduate from high school, with more apprenticeship programs and internships needed to give youth workplace experience.

Several of those interviewed said they wished school guidance counselors and parents would push more kids into the trades rather than the more traditional college route.

College still is statistically the most likely path to a higher salary, but not everyone is cut out for it, and learning a skilled trade can be a less expensive alternative that can also lead to a lucrative salary.

Sinclair is working closely with businesses to determine their workforce needs — with degree programs, certificates for skills that don’t need a degree, and training of a company’s existing employees.

The goal is to not only help the traditional early-20s college student get trained but to help those already in the workforce “skill up so they can earn greater wages,” said Scott Markland, vice president of student development at Sinclair.

Jennifer Duff, 43, of Beavercreek is one of those trying to “skill up” by enrolling in Sinclair’s manufacturing management and apprenticeship certificate program. She currently makes $13.50 hourly as a third-shift production worker at Pratt Industries in Lewisburg, and wants to move into a supervisory position.

“I want to make at least $18 and above,” Duff said. “It would take a financial burden off, that’s for sure.”

One of the challenges for adults who want to improve themselves is finding the money to afford schooling and carving out the time to do it.

Amanda Crooks of Dayton is a 29-year-old married mother of three who works in management part-time at a local restaurant and is a freshman at Sinclair Community College. Her husband works full-time and goes to school full-time.

As a working mom with bills to pay, she finds the hurdles are much higher than for someone just out of high school.

“There are day care costs and all your other costs. It’s just crazy. You want to excel and do all these things, but you only have 24 hours a day,” Crooks said. “There’s not enough time in the day.”

Crooks said she sees the stories about the economic boom.

“I’m still looking for a piece of that action,” Crooks said. “Every time I read that I’m like, ‘Where? I don’t see it.’”

Joe Tuss, who is in his final month as Montgomery County administrator after serving more than three decades in local government, said he is troubled by the number of local residents who feel left out of the economic recovery, and he’s hoping that the social services safety net doesn’t become more frayed as federal officials consider cutting food stamps and Medicaid.

Even so, Tuss said he is optimistic about the future.

“The diversity we’ve got in the economy right now is good. It’s a strength,” he said. “Now the question is how do you build on that?”

See Part Two of this series: Barriers to employment.

By the numbers

5.1: Percentage unemployment rate in Dayton MSA June 2018, up from 4.9 percent in June 2017.

34.5: Percentage poverty rate in Dayton in 2017.

$744: Average weekly earnings in Dayton MSA in 2017, down from $918 in 2007.

70,251: Average monthly food stamp recipients in Montgomery County in 2017.

371,600: Employed civilian workforce in Dayton MSA in June 2018.

*Dayton Metropolitan Statistical area includes Montgomery, Greene & Miami counties. June data is not seasonally adjusted.

Sources: U.S. Bureau of Labor Statistics & U.S. Census

10 top occupations with the most area job ads

These are among 15,554 job openings posted for the 12-county West JobsOhio region.

Drivers of heavy duty trucks: 1,042

Registered nurses: 666

Retail salespersons: 431

Retail sales supervisors: 354

Software applications developers: 288

General maintenance and repair workers: 268

Production and operating worker supervisors: 219

Customer service representatives: 217

Industrial engineers: 203

Drivers of light duty or delivery trucks: 195

Source: OhioMeansJobs.com

Median household income in Montgomery County*

2016 $47,936

2006 $50,047

Declined by 4 percent between 2006-2016

Decline for whites was 3.25 percent

Decline for blacks was 8 percent

*Adjusted for inflation

Source: Compiled by Richard Stock, director University of Dayton Business Research Group, using most recent U.S. Census data

THE PATH FORWARD

Like all of you, we care deeply about our community, and want it to be the best it can be. There is much to celebrate in the Dayton region, but we also face serious challenges. If we don’t find solutions to them, our community will never be its best.

We have formed a new team to dig into the most pressing issues facing the Miami Valley. We want to engage you and others in the community to move toward a stronger and better future. We’ve begun a project we are calling The Path Forward in which, with your help and that of a new 16-member community advisory board, we will seek solutions to issues readers told us they were most concerned about.

In June, we began the project by examining the current state of the opioid epidemic, asking what a recovered community would look like. A few weeks ago, we began an examination of Dayton Public Schools. Today, we explore why the local economy is booming for some people, while others continue to struggle.

Follow the project on our Facebook pages and at DaytonDailyNews/PathForward, and share your ideas.

Contact Lynn Hulsey at (937) 225-7455 or Lynn.Hulsey@coxinc.com and follow her on Twitter and Facebook @LynnHulseyDDN

JOIN our Facebook group - The Path Forward: Dayton - Dayton & the Economy

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