Dayton and Springfield are among the 15 percent of U.S. metro areas that are expected to take more than a decade to regain the jobs lost during the economic downturn, according to a recent report.
About one-quarter of U.S. metro areas have already recouped the jobs obliterated during the recession that began in 2007, and about half should reach that benchmark by the middle of 2015, according to a report commissioned by the U.S. Conference of Mayors.
Payrolls in Columbus have bounced back and surpassed pre-recession levels, and employment in the Cincinnati-Middletown metro is expected to fully rebound within the next two and a half years.
But Dayton, Springfield and six other Ohio metro areas face a much longer road to economic recovery, and some experts fear the local jobs regained may not match the quality of the jobs eliminated.
Still, the local economy is growing again, reversing many years of declines, and some economists said the region may prove more resilient than projections suggest.
“My favorite philosopher, Yogi Berra, said, ‘Predictions are hard, especially about the future,’” said Jim Brock, economics professor with Miami University. “This doesn’t mean (Dayton’s) economy is doomed.”
There are about 363 metro areas across the United States, and by the first quarter of 2013, almost 100 of them had recouped the jobs they lost during the downturn, according to the report by IHS Global Insight prepared for the U.S. Conference of Mayors.
Some metro areas rebounded even quicker than that: Employment in the Columbus metro area returned to its pre-recession peak in the first quarter of 2012 and has climbed even higher since then.
Other metros in the state are making progress, but still have further to go.
Employment in the Cincinnati-Middletown metro is expected to return to pre-recession heights by the end of 2015, and Akron and Canton-Massillon metros are expected to get there by the third quarter of 2016.
Employment in the Cleveland metro area is expected to fully rebound by the fourth quarter of 2018.
But employment in 55 metro areas is not anticipated to return to peak pre-recession levels until 2024 or later, the report said.
Among this group are Dayton and Springfield, but also Lima, Mansfield, Sandusky, Steubenville, Toledo and Youngstown.
The Dayton metro area includes Greene, Miami, Montgomery and Preble counties. The Springfield area includes Clark County.
Growth in state’s epicenter
Dayton and Springfield will not recover as quickly as other areas because their economies are still rooted in traditional industries that were decimated by the downturn, some economists said.
Columbus, for instance, has thrived because it has a more diversified economy than Dayton, which includes state government, Ohio State University and various corporate headquarters, said Greg Lawson, policy analyst with the Buckeye Institute in Columbus.
“I think Columbus has done well because, quite candidly, it is a little more white-collar and more service-oriented and government-orientated,” he said.
The manufacturing and automotive sectors were in caught in a downward employment spiral even before the recession, but the economic collapse accelerated the pace of decline, said Karl Kuykendall, economist with IHS Global Insight.
“A lot of the manufacturing-intensive metros in Ohio have been struggling since the early 2000s, because of the contraction in manufacturing activities,” he said.
The Dayton area’s heavily reliance on manufacturing contributed to the area losing jobs for 10 consecutive years, starting in 2001.
Losses locally included Delphi closing multiple auto parts factories, NCR relocating its headquarters from Dayton to Georgia and General Motors closing its Moraine assembly plant.
But the Dayton and Springfield metro areas are finally adding jobs again, and local unemployment rates have been falling.
“We are now in a positive economic growth cycle that is realizing business investments and job growth throughout the entire Dayton region,” said Chris Kershner, vice president of public policy and economic development with the Dayton Area Chamber of Commerce.
The region still has a long ways to go.
The Dayton metro area has regained less than one-third of the jobs it lost during the downturn, and Springfield has regained less than one-quarter, according to federal labor data.
To return to pre-recession employment levels, the Dayton area would need payrolls to grow by about 26,600 workers, and Springfield area would need to add 3,200 workers, according to IHS.
Long-term weakness in the region’s labor market unfortunately will put downward pressure on local wages, benefits and overall job quality, said Heidi Shierholz, a labor economist with the Economic Policy Institute in Washington, D.C.
“It makes your position worse, because your employer knows they are all you have,” she said.
The recession wiped out many high-paying jobs, and the recovery continues to create too many jobs with lower pay and lesser benefits, she said.
But the future remains very unclear and cities that years ago were thought to be on the verge of extinction have reinvented their economies and have come roaring back to life, such as Pittsburgh and Omaha, Neb., said Brock, with Miami University
“I’m very skeptical of long-range projections,” Brock said. “And a city like Dayton, which despite its problems and challenges, still has some incredible assets.”
Assets include Wright-Patterson Air Force Base, a massive employer, and the area’s central location at the intersection of two major highways, he said.
The local metros also may not return to pre-recession employment levels anytime soon partly because they are not growing.
The Dayton metro area is expected to lose 3 percent of its population by 2025, and Springfield is expected to lose 4 percent, according to projections by Ohio’s Development Services Agency.
It is difficult to grow employment when the population is headed in the opposite direction, experts said.