RG Steel layoffs raise jobless rate in Valley to 8%

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By Burton Speakman



The jobless rate is rising for the first time this year in the Mahoning Valley, but overall the economy appears to be a of mix of good and bad.

The layoffs at RG Steel in Warren increased the unemployment figures for not only Trumbull County but Mahoning County and to an extent Columbiana County, said George Zeller, a Cleveland-based economist. Before the layoffs, RG Steel had 1,135 employees.

“I’ve been saying for the last few months that the Youngstown area was the fastest growing economically in the state,” Zeller said. “That hasn’t been true the last few weeks.”

The unemployment rates are based on where someone lives and not where they work, meaning that RG Steel layoffs would impact multiple counties, Zeller said.

The unemployment rate would probably be higher, at least in Trumbull County, if the rates were seasonally adjusted, he said.

The nonseasonal adjusted unemployment rate for the Mahoning Valley is 8 percent for June. It is up from the 7.4 percent rate from May but is lower than the 10 percent rate for the Valley in June 2011,

according to data from the Ohio Department of Job and Family Services.

The county and city data for joblessness though are likely to be skewed due to the large number of seasonal employees in June, Zeller said. The month has one of the highest seasonal adjustments each year.

A positive sign in the figures is the number of people employed in both Trumbull and Mahoning counties is up, said Tod Porter, professor of economics at Youngstown State University.

“The overall trends from the last few months are positive, but I would say that with one caveat. It makes sense to me the RG Steel layoffs are not shown in the [current] figures,” he said.

Zeller agreed that the full number of RG Steel layoffs probably did not appear in June jobless figures.

The increase in the labor force is likely due to an increased number of high school graduates entering the work force and possible some formerly discouraged workers who might have re-entered the labor force, he said.

“The increase in the unemployment rate is not what you want,” Porter said. “There are times during a recovery when you might have an increase in unemployment rate as previously discouraged workers are pulled back into the workforce.”

There are issues other than seasonal employment that make analyzing employment figures on a statewide level difficult. Ohio reported the second-largest increase in the number of jobs created with more than 18,000 while simultaneously stating there was an increase of more than 12,000 in the number of people unemployed, Zeller said. Ohio also reported a decrease of more than 18,000 in the state’s overall workforce.

“These things cannot all occur. The problems are technical and based on how the information is collected,” Zeller said. The figures will be adjusted later as better information becomes available, he added.

“It’s difficult to put a lot of stock in any one month’s numbers. Unemployment figures are notoriously flaky,” Porter added.

In Youngstown, the unemployment rate increased to 10 percent in June, up from 9.5 percent in May but down from 12.9 percent in June 2011.

Among the state’s 88 counties, the June 2012 unemployment rates ranged from a low of 4.6 percent in Mercer County to a high of 13.0 percent in Pike County. Rates increased in 85 of the 88 counties.

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