Sunday, August 29, 2004

The Ohio unemployment rate crept up a notch last month to 5.9 percent — a politically grim statistic that could hand that battleground state to the Democrats in November.

It’s possible the Republicans can win the presidency without carrying Ohio (by taking Wisconsin and Minnesota), though it would be a steeper challenge. In 2000, President Bush narrowly won the state over Al Gore, and, despite the nearly 6 percent jobless rate, the race there is in a dead heat.

Still, the economy and jobs (not Vietnam or Iraq) remain the top issue for Ohio voters, senior Republican officials told me last week. John Kerry has been relentlessly attacking Mr. Bush on every visit on the outsourcing of jobs overseas, poorly paying jobs here at home and a weakening economy, with a lot of reinforcement from Democratic fat-cats who are bankrolling 527-funded ads across the state.

For his part, Mr. Kerry is demagoguing and distorting each one of these issues. Outsourcing, a small share of the labor market, is exaggerated. Jobs are being created at all income levels.

But enough unemployed people are hurting in Ohio to buy into Mr. Kerry’s economic offensive and, frankly, Mr. Bush hasn’t made a strong enough case to show why the Massachusetts liberal is wrong on all counts.

“This state is a toss-up,” says Jim Trakas, Cuyahoga County Republican chairman. “The economy is the biggest issue by far and Kerry has beaten up Bush pretty badly here on off-shoring jobs, and [Mr. Bush] needs to address it.”

Someone in the White House ought to talk to Heritage Foundation chief Ed Feulner, who ticks off facts that shoot holes in all of Mr. Kerry’s economic charges.

What the president ought to be saying is ” ‘outsourcing’ is actually far overshadowed by something we hear much less about, ‘insourcing,’ ” Mr. Feulner says. “That’s the process by which foreign firms hire workers here, including Honda workers in Ohio and BMW employees in South Carolina.”

Feulner cites a recent study by the Organization for International Investment, which found 6.4 million jobs in the United States in which the employer is a foreign company.

“The study also showed insourced jobs are growing at an annual rate of 5.5 percent, while manufacturing outsourced jobs grew at an annual rate of only 1.5 percent,” he said. In other words, “more companies are moving jobs here than are shipping them elsewhere.”

While Ohio is still struggling economically (a task made all the harder by the state’s sales tax increase), job growth has been impressive elsewhere. Not only are more Americans working than ever before in our history, 139 million, according to the Labor Department’s household survey, state-by-state payroll data show jobless rates have dropped considerably (though you won’t see this reported on the nightly news).

While key battleground states like Ohio and Michigan saw their jobless rates creep up in July, other states saw their rates fall as a result of much stronger economic growth fueled by the Bush tax cuts.

Pennsylvania’s unemployment rate fell from 5.6 percent to a low of 5.3 percent. Wisconsin’s rate dropped from 5 percent to 4.7 percent. Florida’s number declined even further, from 4.8 percent to 4.4 percent.

Other pivotal states are still at similarly lower jobless rates. Nevada: 4.4 percent; New Mexico: 5.3 percent; Minnesota: 4.4 percent; New Hampshire: 3.9 percent; Iowa: 4.4 percent.

OK, say Mr. Bush’s Democratic critics, but the jobs being created in these and other states are lower-paying jobs. Not true, according to Associated Press economics reporter Adam Geller. In a revealing investigative piece on jobs and pay scales, he found better-paying jobs are being created at every level.

Yes, many of the biggest new jobs producers are employers that pay below average — restaurants and administration services such as temp jobs, call centers or janitorial work. Even so, “the administration and its allies have a valid point when they hail the economy as adding numerous new opportunities, many of them well paid,” Geller reports.

“If you set aside industries that continue cutting jobs and look only at those that are hiring, the mix between low- and high-paying jobs appears more balanced. About 53 percent of net new jobs are in lower-paying industries, with nearly 47 percent higher paid,” he says.

Nevertheless, the situation on the ground in Ohio remains problematic for the Bush campaign. “The Ohio economy is hurting,” says Republican state chairman Bob Bennett, who still thinks Mr. Bush will carry it in the end.

But Mr. Bennett and other state Republican officials want the president to sharpen his economic message and wage a far more forceful rebuttal on the jobs front. The economic growth arguments are there for the GOP to use, they just need make them much more effectively than they’ve been doing thus far.

Donald Lambro, chief political correspondent of The Washington Times, is a nationally syndicated columnist.

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