The Economy of Ohio compared to the economy of Franklin County

When comparing two separate regions in terms of economy, it becomes quite complex as to what is a clear indicator. While in most instances, certain indicators provide straightforward comparisons – for example, unemployment and Per Capita Income (PCI) – there are several that are less than certain. Unemployment is a clear indicator, as an economy can only be healthy if people are employed. PCI is also usually a good indicator, as the average wealth of the populace indicates the average wealth of the territory. A somewhat less straightforward indicator is the Gross Domestic Product (GDP) of a region; GDP indicates the market for a region’s production, which shows the economic prowess of the area. Another often unclear indicator is the percentage of households that are below the poverty line. Though this latter coincides well with PCI, the poverty line reveals the economic conditions of whole families that reside within the state. Using these four indicators, I examine and compare the economies of Franklin County with those of the State of Ohio in the years between 1970 and 2008.

Unemployment is one of the clearest indicators of the economic health of a region. By looking at the total populace with jobs, one can determine the movement of monies in the area and how healthy the buying power is. In the decade between 1970 and 1980, the overall unemployment rate in Ohio doubled, from 3.2 percent to 6.6 percent¹. Meanwhile, over the same period, the unemployment rate in Franklin County increased by a much smaller percentage, from 1.7 percent to 2.8 percent². Though both the state and the country were following the general trends, Franklin County, which had fewer automotive jobs, was able to stay below the state average unemployment.

From 1980 to 1990, however, Ohio’s unemployment rate actually dropped, from 6.6 percent to 5.8 percent³. This trend directly corresponded with the national trend as the country took off on a short recovery. Franklin County, however, did not follow the trend, as the employment rate stagnated at roughly 3.6 percent⁴. The following decade, 1990-2000, Ohio continues to follow the trend of the rest of the country, as the unemployment rate dropped 1.8 percent⁵ over those ten years. Columbus unemployment followed suit and dropped, though at a lesser rate, to 3.2 percent⁶. Both Ohio and Franklin County continued this decline in unemployment due to a strong economy and the survival of manufacturing jobs. Both the state and the county were below the national average in gaining jobs, as the dot-com cycle occurred in neither.

Over the last decade, Ohio’s unemployment rate turned around and started rising, with the unemployment more than doubling, from 4 percent to 9.4 percent⁷. This coincided with the national trend as a weak dollar, a failed presidency, and the loss of thousands of manufacturing jobs tore through the American employment system. Franklin County unemployment, on the other hand, went up by only 2.5 percent⁸, as the manufacturing job loss was not felt nearly as hard in Central Ohio.

It is clear, by following the percentage changes of Franklin County unemployment compared to those in the overall State of Ohio, that Franklin County is more immune to employment changes than the rest of the state. Though this may be due to random factors, it is most likely due to the fact that Franklin County has governmental, educational, and technological jobs. These sorts of jobs are in constant supply and provide good employment. The majority of Ohio, however, has agricultural and manufacturing jobs, both of which are dependent on the economic climate at the time.

Though the employment rate is a primary indicator of the economic health of a region, it is not the only one. Another clear indicator of the economic health of a region is the PCI of the citizens. If the citizens have a high PCI, then they are able to purchase, exchange money, and generally assist the economy in any way they can. Between 1970 and 1980, the PCI of Ohio rose $6,000 to $10,000⁹. During the same time, Franklin County’s PCI rose by almost the exact same amount, reaching roughly $10,000 as well¹⁰. In both Ohio and Franklin County, the PCI growth paralleled that of the country.

In the decade between 1980 and 1990, the PCI of both Ohio and Franklin County went hand-in-hand, as both doubled to nearly $20,000¹¹¹². As there was both a growth in governmental and educational jobs (Franklin), and a growth in manufacturing and agricultural jobs (Ohio), this similar jump is perfectly logical. During the following decade, however, Franklin County’s PCI grew only $6,000¹³, while Ohio’s grew roughly $9,000¹⁴. This discrepancy can be explained by the greater drop in unemployment in Ohio overall than what happened in Franklin County.

Between 2000 and 2008, Ohio’s PCI grew another $10,000¹⁵, which seems to indicate a specific pattern; an increase of $10,000 per decade. Though Franklin’s PCI grew by about $12,000¹⁶ over this decade, it is clear that it grew at a much larger percent. As Franklin started out a smaller number than Ohio, this $2,000 extra meant that the county was succeeding economically more than the rest of the state. This could be caused by the decrease in manufacturing jobs outside of Franklin County, and the increase in technological inside the county.

An interesting thing to note is the correlation between the unemployment rate and the PCI of a county or state. Where Ohio gained in employment compared to Franklin, they also gained in PCI. The same is true in reverse. It is also clear that with an increase in technological and educational job demands, the PCI of Franklin County will only continue to increase. As demand for agricultural and manufacturing declines, the PCI of Ohio overall will decrease until Ohio establishes itself a new economic base.

Though it is not as clear of an indicator, another good indicator of the economic climate of a specific area is the GDP of the region. If the GDP is high, then the region clearly has a good infrastructure, good spending power, and good manufacturing power. All three of these combined reveal a strong economy. Between 1970 and 1980, the GDP of Ohio rose roughly 75 percent¹⁷, from 75 billion dollars to 125 billion dollars. Franklin County’s GDP followed suit, jumping roughly 60 percent¹⁸.

In the decade between 1980 and 1990, the GDP of Ohio followed the economic and employment statistics of the country as a whole, as it gained about 50 percent¹⁹. Franklin County, on the other hand, grew at a slower rate, and rose only about 35 percent²⁰. This is probably due to the increase in employment and other economic indicators in overall Ohio, versus the smaller increase in employment in Franklin County. Between 1990 and 2000, however, the GDP of Ohio gained about 75 percent²¹ compared to the 125 percent²² of Franklin County. Though this balanced the two out (between 1970 and 2000 they gained roughly the same percentage), the technological jobs in Franklin County out-paid the manufacturing jobs in the rest of the state.

Between 2000 and 2007 (there are no complied statistics for 2008), Ohio’s GDP gained another 35 percent²³, ending at roughly 461 billion dollars. This means that if Ohio was a country they would have the 17^th highest GDP and be an economic powerhouse. Franklin County, on the other hand, increased GDP by over 100 percent²⁴, as the economic climate, population increase, inflation, and technological jobs in central Ohio greatly increased the pay.

It is apparent that the GDP of Franklin County is highly tied to the PCI of the county and the existence of technological, educational, and governmental jobs. On the other hand, Ohio’s GDP seems more tied to the unemployment rate. As Ohio jobs are more manufacturing and agricultural than Central Ohio, the actual GDP of the two regions correlate directly to the demand for their respective specialties.

A fourth indicator of the economic health of a region is the number of families living below the poverty line; this indicator clearly shows the spending power that a populace has. The higher a region’s spending power, the better the economy is, as it increases the GDP and the savings/taxing allowances. In 1970, the percentage of Ohio families below the poverty line (FBPL) was at 12.5 percent²⁵. Over the following decade, the FBPL rose 2.5 percent to be roughly 15 percent of the population²⁶. Over the same period, Franklin County’s FBPL rose from 10.5 percent to 12.5 percent²⁷. This does not seem to coincide with changes in GDP or PCI rates, but does correlate weekly with the unemployment rate. The dollar amount that defines the poverty line shifted during these times, which could account for a weak-seeming relationship.

Between 1980 and 1990, the FBPL in Ohio rose another 4 percent, reaching 19 percent²⁸.. Over the same time, Franklin County’s FBPL rose only 2 percent, putting it at 14.5 percent²⁹. This pattern upward followed the national trend, though it did not follow the GDP or PCI trends in either Ohio or Franklin County. With a higher demand for governmental jobs, the reason Franklin did better is obvious. Between 1990 and 2000, however, the FBPL in Ohio dropped from 19 percent to 14 percent³⁰., as agricultural and manufacturing jobs increased. Over the same period, the FBPL in Franklin County dropped from 14.5 percent to 13.5 percent³¹.

In the following decade, between 2000 and 2008, the FBPL of Ohio went from 14 percent to 13.1 percent³², which is quite surprising given the economic turmoil that hit the rest of the country in terms of manufacturing and agricultural job losses. Franklin County’s FBPL, on the other hand, rose from 13.5 percent to 16.2 percent³³. Given the increase in GDP and PCI at the time, I can only explain the increase in FBPL by a disparity how the money in the region was distributed. In other words, there was money in Franklin County, but most of the money was held by a very few people.

While it is obvious that the FBPL is an indicator of the general economic health of a region, it is also clear that it does not correlate well to other trends. Sometimes following unemployment, PCI, and GDP, sometimes not, the FBPL percentage seems to stand on its own. While this might make it seem as though it is not a good indicator, it is clear that it still is one; instead of seeing how the economy is as a whole, the FBPL shows the money distribution patterns.

Over 40 years, the unemployment rate in Ohio rose 6.2 percent compared to 4 percent for Franklin County. It is clear that the loss of agricultural and manufacturing jobs cost Ohio in this regard. Even with the higher loss of jobs, Ohio and Franklin County were roughly equal in the PCI gains; the PCI of Ohio rose $35,000 while the PCI of Franklin County rose $34,000.

Over the same 40 year, Ohio’s GDP rose 235 percent compared to Franklin County’s 320 percent. The difference is dramatic, showing that the GDP of Ohio was closely linked to the manufacturing and agriculture communities, whereas Franklin County’s economic base was more technological and educational.

From 1970 to 2008, the FBPL of Ohio rose only .6 percent while the FBPL of Franklin County rose 6.5 percent. This difference, on the order of 10 magnitude in a time of increased GDP, clearly shows that wealth was unequally distributed at a greater rate in Franklin County than in Ohio.

Looking at these numbers, it is clear that the unemployment rate and the GDP are closely tied together. In both, Franklin County beat Ohio by roughly the same percentage. It is also clear that both are not as closely tied to the PCI of the region, as Ohio and Franklin County rose be roughly the same PCI rates. Finally, it is clear that using all of these indicators together can tell you how dispersed a region’s wealth is.

Overall, it seems as though the economy of Franklin County has been running parallel, if not slightly better, to the economy of the State of Ohio. Franklin County had a higher GDP growth and employment rate. Both of these factors are strong indicators of the economy and show that the county system is doing better. Along the same lines, Franklin County and Ohio both had the same PCI rate and growth, which indicates a strong link between the two. Finally, the FBPL being higher in Franklin County does not indicate an economic problem; rather, it indicates a large gap in the income levels of the families. In the end, it appears that all data indicates that while Ohio and Franklin County are closely linked, Franklin County is in better economic health than the state of Ohio.