The business costs of a community impact its attractiveness for economic activity. Business Costs include the wage rates needed to be paid for workers in the relevant industry, home prices and other major expenses and transportation costs including lost time in traffic congestion.
Employee wage rates for a given industry have a substantial impact on the cost of doing business in a given market. Unless the company is engaged in an energy intensive industry, worker wages are the number one expense a company faces. Likely due to recent growth, small supply and skills required, information technology workers are highly paid and sought after. The average salary of an American worker is $17 an hour constituting $35,360 annually. For all the targeted regional markets, IT workers in those regions make more than double the average American salary.
From a logistics and distribution workforce standpoint, Ohio has a strong base of logistics and transportation workers. Central Ohio has a large base of logistics and transportation workers but also has the highest annual mean wage for these workers. Employment of transportation and material moving occupations is projected to grow 6% from 2016 to 2026, about as fast as the average for all occupations, adding 634,300 new jobs. Material moving workers are expected to be needed to move materials in nearly all sectors of the economy. Additionally, the economy depends on truck drivers to transport freight and keep supply chains moving.The national median annual wage for transportation and material moving occupations was $31,600 in May 2017, below the median for all occupations of $37,690.
Ohio’s cost for workers in the transportation and material movers category is well above the national average and the wage for the average American workers.
The cost of housing is another important factor when a company is considering locating in a region. What looks like a high-salary for desparately needed skilled labor can be wiped away by million dollar average home prices, aka “Silicon Valley.” The chart below outlining the median home value and median gross rent in competitive markets illustrates how the cost of housing the targeted regions.
State Tax Analysis
With the growth in Ohio state government spending, the upcoming Fiscal Year (FY) 2020-22 operating budget is anticipated to be a challenge awaiting a new Governor and the 132nd Ohio General Assembly that will include a new Speaker of the Ohio House. A review of the state’s exemption list for the sales tax is a worthy topic. For an in-depth 8-page report on the Ohio Taxes, contact Nate Green ([email protected]) or attend the review of the Ohio Competitiveness Report on October 2.