Ohio Hit Hard By Economy

More than 100,000 Ohio jobs were lost this year, a result of the nation's economic crisis and, more specifically, a suffering auto industry. Ohio's unemployment rate of 7.2 percent, one of the highest in the country, has leaders in the Midwestern state asking Washington for help. Lt. Gov. Lee Fisher explains the extent of Ohio's labor crisis.

MICHEL MARTIN, host:

I'm Michele Martin, and this is Tell Me More from NPR News. Coming up, a story that will not be a surprise to those of you who live in certain neighborhoods across the country. Murders and other violent crimes are actually on the wane across the country, except for one group - young, black males - for whom the homicide rate has actually surged in recent years. The author of a new study will talk about why black teenage males are at such risk.

But first, we want to talk about another kind of loss, the loss of work for thousands of people across the country. Few places have been hit as hard as Ohio. In recent weeks, companies like GM and DHL have all announced plant closings and layoffs, adding to the more than 100,000 jobs already lost over the past year. Ohio now has one of the highest unemployment rates in the country at 7.2 percent, and that has led state government leaders to look to Washington for a lifeline. Joining us now to talk about all this is Lieutenant Governor Lee Fisher. Mr. Fisher, thanks so much for speaking with us.

Lieutenant Governor LEE FISHER (Director of Development; Democrat, Ohio): Hi, Michel. Good to be with you.

MARTIN: Now, in addition to being lieutenant governor, you're also director of development. I'd like to go back a little bit, if we can, and I'd like to ask you, when did you realize that Ohio was going to be in for a rough ride? I'm guessing it was probably before a lot of other people around the country did.

Lt. Gov. FISHER: I think it's fair to say that we knew almost the moment that Governor Strickland and I took office two years ago that there may very well be an economic perfect storm headed to America, and it usually settles over the Midwest first. MARTIN: What's the key factor here, though? I mean, the troubles in the auto industry have gotten a lot of attention. Is that what's driving this in Ohio?

Lt. Gov. FISHER: Well, I think it's a lot of things. I think certainly the auto industry is one. It's also because we're the third largest manufacturing state in the country. And even though we have done a very good job in diversifying our economic portfolio, we still depend very heavily on manufacturing, and that's been hit very hard during the last two years, and in fact, really, more the last 10 years.

MARTIN: So, is it my understanding that Governor Ted Strickland has actually picked up the phone and called the Obama - President-elect Obama's transition team. Is that so?

Lt. Gov. FISHER: That's very true. Governor Strickland has talked to President Obama. He's - President-elect Obama; he's talked to Rahm Emanuel; he's probably talked to about at least a dozen U.S. senators. He's been very aggressive around the country, talking about the fact that when you help the auto industry, you're helping America; you're not just helping one or two particular states.

MARTIN: But I understand that this - the conversations go beyond simply a bailout for the auto industry. As I understand it, there are three key areas where state officials are hoping for some help from Washington. I want to go through them and ask you what each of those three things would do to help. First an...

Lt. Gov. FISHER: Sure.

MARTIN: Increase in federal payments for Food Stamp and for Medicaid. Now, why is that?

Lt. Gov. FISHER: Well, I think it's fair to say that the economy of this country depends largely upon what happens on streets, block by block, neighborhood by neighborhood. We can't just focus on businesses - large, small and medium - we also have to focus on the workers. Why? Because having an educated, skilled, productive workforce is the game changer in global economic development today. And therefore, it's - you don't really look at it as having a safety net; look at it as having economic elevators in each of our communities. So, making sure that people can survive and then eventually thrive is absolutely key to economic development in our state and our country.

MARTIN: I think you're talking about two things at once here. One is, you're talking about an increase in some funding for education and also for Food Stamp and Medicaid. One of the things - what I'm trying to understand is, do you have an immediate need for additional support for Food Stamp and Medicaid now because the states are running out of money? Or is it that you're hoping for increases in these budgets just because the funding levels are too low, period?

Lt. Gov. FISHER: Well, I think it's both, Michel. I think that there's no question that the funding levels are too low, but at the same time, given how hard communities and families at all income levels - but particularly the lowest - have been hit, making sure we have food stamps and other kinds of help for the most vulnerable populations is absolutely key to making sure that Ohio, and for that matter, our country, stay strong.

MARTIN: Now, talk to me about this request by a group of Democratic governors for $250 billion for education. Now, this has not gotten a lot of attention. I think it's kind of been overshadowed by the bailout requests for the auto industry. What would that money do? What would it go toward?

Lt. Gov. FISHER: Well, Michel, during this global economic crisis, we have to focus on the short term and the long term simultaneously. We don't have the luxury of doing it sequentially. So, even though we have to have a short-term stimulus that produces jobs tomorrow, if we're not also building a long-term infrastructure, we're in trouble. And that infrastructure isn't just roads and bridges; it's the human capital as well, which is why investing in early childhood - primary, secondary and higher education - is just as important as the short-term jobs that'll be produced by the physical capital that we're going to invest in with roads and bridges.

MARTIN: But what exactly would that money go towards? What would it do? Would it increase faculty salaries? Would it offer up new areas of training for people?

Lt. Gov. FISHER: Hopefully, it'll be done in such a way that the governors have some measure of discretion. But I think it's fair to say that, at least Governor Strickland and I believe, that whenever you're looking at reforming schools, you have to do two things simultaneously: You have to improve what's happening inside the classroom. That often means, for example, having smaller schools where the teacher-student ratios are much smaller and so students are getting more individualized attention. But it also means, hopefully using federal resources, to be able to increase the share of funding that comes from the state, so we rely less on local property taxes.

MARTIN: If you're just joining us, this is Tell Me More from NPR News. I'm speaking with Lee Fisher; he's the lieutenant governor of Ohio. Finally, a number of governors have asked for money for so-called shovel-ready projects, infrastructure-improvement projects. But a lot of those projects will be funded by gas-tax receipts, which is, of course, you know, are way off. How - what would you do with that money, and how do you think it can actually be paid for?

Lt. Gov. FISHER: Well, first of all, I think - one of the reasons I think it's so important to have money going into our physical infrastructure is that, these days, distribution and logistics is absolutely key. If you don't have ways to transport goods and people quickly and efficiently, you just simply can't compete with other states, or for that matter, other countries. It also means that short-term jobs are produced almost immediately, and that involves stimulating the economy. I think it's fair to say there is no quick fix here - whether its education, whether it's physical infrastructure, whether it's helping the most vulnerable - we have to do all these things during this economic crisis. We can't afford to do just one of them.

MARTIN: Can I ask you how - just what it's like for you and the governor day to day. I mean, a downturn like this doesn't just put stress on individual budgets; it puts stress on the state budget. So, I'm just going to - what are some of the stressors you're seeing in the state budget, and how are you prioritizing them? As I understand it, you have a huge - you're facing a huge shortfall, in about the $7 billion range.

Lt. Gov. FISHER: That's exactly right. We have a projected deficit over the next two years of, about $7.3 billion, and our economy has been hit very, very hard, and it's all - and I mean, all - because of what's happening on the national scene. For example, Michel, we're projected to see a reduction in wage and salary incomes for the first time ever in Ohio. Until this fiscal year, there was no time in the past half century when our general-revenue-fund tax revenues declined two years in a row. Our tax revenues for the next two years will be less than the revenues the state had seven years ago. So, we are in some very difficult time, and frankly, without federal help, it's going to be very difficult. The difference, however, between the states and the United States is that we must balance our budget. It's not optional, which means that if we don't get that federal stimulus, we're going to be cutting well into the muscle on the bone.

MARTIN: Can I just ask you what it's like for you, though? I mean, do people stop you at the grocery store, and...?

(Soundbite of laughter)

MICHEL: What's it like?

Lt. Gov. FISHER: Well, first of all, when I - when the governor and I were elected, and the governor asked me to be in charge of economic development, we knew what we were signing up for. So, there is no self pity here whatsoever. Having said that, is it stressful? Oh, of course it is, but it's not nearly as stressful for the people of Ohio who are losing their jobs, whose incomes have gone down. So, I think it's fair to say that the governor and I always see the silver lining. We always are optimistic, and it's not just because we're Pollyannas. It's because we see the state's assets; we see the short-term and long-term investments that we're making.

And we believe that there are two different kinds of states. One states hunker down, close their eyes, and pray for a better day. And the other states, like ours, hunker down and certainly live within our means, but at the same time, we invest in what matters. We're making, for example, an investment of $1.5 billion here in Ohio. We didn't wait for the federal stimulus; we passed our own. And we're putting money into advanced and alternative energy, into biosciences, into distribution and logistics, into college internships, the point being that every single day when I wake up, despite the challenges, I am determined, I'm resilient, and I'm optimistic. And Governor Strickland is part of the reason for that. He's a great leader and a great governor.

MARTIN: I understand that that's what you do when you wake up, but what's keeping you up at night?

Lt. Gov. FISHER: (Laughing) Well, I think it's fair to say that I'm going to bed late and getting up early, but I'm sleeping through the night because I know that there are a lot of people who are depending on the governor and I and our administration to turn around the state's economy. And the good news is we're going to do it. It's not going to happen as quickly as I would have liked because of national forces beyond our control, but we can control some things, and those things are the investments we make and how well we live within our means. And by the way, we passed, Michel, last year, the slowest growth state budget in 42 years. And then, when we saw the economic perfect storm headed directly to Ohio, the governor and I voluntarily cut an additional $1.3 billion from our budget. Now, even after that, we have a projected deficit of 7.3 billion, but the point is we are absolutely living within our means and still making unprecedented investments in higher education and in targeted industries of growth.

MARTIN: Some corporate executives are taking pay cuts to demonstrate solidarity, if you will, with the employees who are similarly being asked to sacrifice. Are you and the governor doing the same?

Lt. Gov. FISHER: Well, I think it's fair to say that everything's on the table, but I think it's not quite comparable, given the fact that government salaries at all levels, whether it's governor or anyone else, are pretty low compared to the private sector. We're not so much into symbolic gestures as we are into things that actually make a difference.

MARTIN: We only have about a half a minute left, but I'm wondering, if you and I were to speak at this time next year, what kind of conversation would we be having?

Lt. Gov. FISHER: Well, I think we'd be saying that 2009 was tough, particularly during the first half. But because of the Obama administration's help to the states and some of the states' creative efforts on their own, we started to see a turn around late summer, early fall of 2009. And I think we'd be saying that although we're not out of it yet, we can see the light at the end of the tunnel, and we're feeling good about where our country and where the Midwest, and in our case Ohio, is headed into 2010 and '11.

MARTIN: Well, let's keep that date next year and see what the conversation actually is like.

Lt. Gov. FISHER: I can't wait to have you tell me more and maybe me tell you more.

MARTIN: All right. Well, thank you. Lee Fisher is the lieutenant governor of Ohio. He is also the director of development. He was kind enough to join us from Cleveland. I'll say Happy New Year. I hope that's in order, given our conversation, but thank you for speaking with us.

Lt. Gov. FISHER: Yes. Thank you very much.

(Soundbite of music)

MARTIN: In a moment, minding your investments. The promise of high returns can be alluring in these tough times, but...

ALVIN HALL: If it sounds too good to be true, it is. No one can deliver those high gains without taking incredibly high risks.

MARTIN: Our personal-financial experts are here next on Tell Me More from NPR News. I'm Michel Martin.

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