LIMA — The signs of a strong economy are here.
Unemployment is the lowest it has been in decades. Business confidence is up. People are earning, spending and investing money.
“They’re not hesitating to reinvest,” Bill Stolly, principal agent of Stolly Insurance Group, said. “I don’t know if the Trump tax change was like the ‘oh, my God’ type of thing, but it probably does contribute to some margin that some people are a little less scared.”
“Even consumers that are the lower end of (the buying) frequency, … they’re still willing to pull the trigger. Across the board, they not only know the credit is there, at least for now, it looks like it could stay there.”
Stolly Insurance Group, the 114-year-old business, has seen steady growth in the last few years, Stolly said. Hiring has been consistent, and today, they employ roughly 60 agents at five locations.
The signs of a weak economy are here.
Wages are stagnant for the majority of Allen County workers. The region’s population is leaking. Individuals don’t have the skills necessary to find opportunities or get hired. Couple that with concerns over increased costs in rent, food and other expenditures and that can create increased financial uncertainty.
Not everyone can hear the booming economy. While most residents in Lima and Allen County may notice the tell-tale signs of an economic upswing – orange barrels and construction crews — signs of stagnation — blight and rat infestations — remain in other neighborhoods.
There’s a reason why dollar stores (10 in Lima alone and two more planned) and cheap fast food joints (at least two more in the works) have sprung up alongside high-end eateries (five in recent years and at least one under construction) during this phase in the region’s economic history. There’s a market for both of them.
Unemployment has hit record lows, more people are leaving poverty levels and the welfare rolls are shrinking.
At the same time, for 73 percent of Allen County workers, median wages have failed to rise faster than inflation since the 2008 recession. According to Bureau of Labor Statistics numbers, rising living costs and volatile healthcare markets have squeezed both the middle class and working poor while stock markets roar.
Both data sets are true, and they explain why perceptions about Lima’s economic realities can vary so widely among its residents. The region’s economic experiences aren’t rising in tandem; they’re diverging.
In Allen County, young men coming from poor families on average will earn $10,000 less than the same individual coming from a family already in the top one percent, according to a 2015 Harvard study funded through the Equality of Opportunity Project. That gap doesn’t exist in Putnam or Auglaize counties, or any other county in Ohio. The sizable difference between young men coming from poor and rich families, that width of the income opportunity gap, is entirely unique to Allen County among Ohio counties.
“If you’re in a family that has not had success in prior educational efforts, that becomes the kind of culture of the family,” Mayor David Berger said. “It’s not about information, it’s about the confidence and sense of opportunity that the family has. And that can become just an incredibly difficult thing to overcome.”
The study suggests that generational poverty is often affected by a number of variables — income and race segregation, education, violent crime rates and social support.
Young men, compared to young women, typically see a wider opportunity gap. Such is the case in Allen County where $10,000 separates the average earning potential of young men and only $1,000 separates the average earning potential of young women.
Lonnie Rettig has met a lot of angry young men coming from poor families as the boxing coach of the South Side Spartans Boxing Gym. As he explained, many have little to no social support in their lives. In their spheres of influence, split families or single working parents are the norm. Their schools may not have provided the same educational opportunities as better-funded schools in other districts, and their fun and games as teenagers, such as staying up past curfew, have “turned into rap sheets.”
“They want to fight. They want to overcome something in their world,” Rettig said. “There’s something wrong with a young man who comes into my gym and wants to box.”
Rettig, 48, was in the same position as a young man. He grew up the son of an alcoholic father and working mother. Sports filled a niche of support in his life, so when it came to a point when he could provide the same to others, he opened his own gym. Now he teaches what he had to learn himself to young men going through some of the same challenges.
They “dwell in insecurity,” he said. And when opportunity is presented, they pull back instead of going forward.
“Your ability to mature is already against you,” Rettig said. “You’re going to lag because of self confidence. … What I find in the gym (is) they start boxing. They’re enthusiastic. They’re doing well. And then they get to a certain point when opportunity, success, is there. Then they take a backseat.”
Then there are what the United Way calls “Asset Limited, Income Constrained, Employed”, or ALICEs, who may be better off than they were a decade ago, but because of children or health problems, they find themselves struggling to make ends meet, working multiple jobs without any boosts to their wages while being squeezed from rising living costs and increases in insurance prices.
The United Way, which collects data on ALICEs, estimated in 2015 the percentage of working poor in Lima could be as high as 63 percent.
“There are good jobs. There are also jobs that are low-paying jobs, not just in retail, but also in manufacturing,” Berger said. “Folks who have little skill or folks who have little training or education are limited. They can find themselves stuck in low-wage jobs and often have to put together a couple of jobs to make ends meet.”
“When you’re in survival mode, you’re not thinking about what you can get to with a two-year degree. You’re worried about paying rent or putting food on the table, because you just don’t have the cash to do it,” Berger said.
Within the last three or four years, the focus of regional economic development shifted from job creation to workforce development. Greater Lima Region Inc. President/CEO Jeff Sprague said through OhioMeansJobs, much of the latest efforts to grow the region have centered on finding workers to fill job opportunities.
For newly-graduated, programs like MakerFest communicate what jobs might be available close by in order to retain the region’s younger skilled workers. Sprague said encouraging investments in housing, specifically for market-value apartments and lofts, can help combat some of the region’s brain drain, or the mass migration of young professionals to larger cities.
On the other side of the workforce formula are the working poor, and the Allen County Department of Job and Family Services, through OhioMeansJobs, has updated its programs to connect the underemployed with new skill sets. The agency’s training programs have even funded a percentage of training costs for businesses when they take on new employees.
“That agency has really put ‘jobs’ back into that title,” Sprague said. “They have a resource base of people who are in the system, and they have funding to partner with educational systems to provide access to that training.”
“ACJFS was never intended to be a safety pit. Once someone got in there, they could never get out. We’ve worked diligently to make sure it becomes a safety net, not a safety pit,” Sprague said.
Sprague pointed to reductions in the number of welfare recipients, a steady downward trend at least since 2012, as proof of the strategy’s success.
But while the agency has found some success, not everyone in the community seeks out the department for help. Many ALICEs don’t qualify for certain programs, and if they do, getting help can be a lengthy process. If someone is working 40+ hours per week while juggling the demands of children, educational training may just not be possible.
“There’s no question that for somebody mid-course in their adult working life, the need to both earn an income and up-skill really causes a strain. Going to school at the same time you’re trying to maintain a household budget can really be a challenge,” Berger said.
“There’s often a reluctance to go back to the classroom or there’s an intimidation factor or they might not have had good experiences recently,” Berger said. “So they’re overcoming that kind of hurdle.”
While having too many jobs is a fantastic problem to have, the lack of demand for them because of consistent generational poverty and cultural norms have spoiled wage increases for a majority of the population and stemmed the upward trends in economic data that normally rise alongside boosts in GDP. Numbers aren’t up across the board, but they should be.
“It’s not okay in this community, because there’s a division. There needs to be unity when it comes to it. When you know that there’s some bull— going on, there needs to be some unity. It needs to be conveyed civilly,” Rettig said.
“We do have, I think, institutions that are providing … from welding classes to truck driving classes, to Apollo and machining classes. I think some of what OhioMeansJobs is doing is about not just trying to place people in jobs but also getting individuals to think about planning and education and training so they can up-skill or move into position with higher wages and benefits,” Berger said. “Ultimately, that needs to happen, and it happens because individuals are engaged with others who are persuasive and caring in a way they describe those opportunities.”
Reach Josh Ellerbrock at 567-242-0398.