House Bill 235 Makes Hiring and Doing Business in Ohio More Expensive » Blog » The Buckeye Institute
This opinion piece originally appeared in The news from Lima.
A bill pending in the General Assembly threatens to make it harder to hire workers at Cenovus in Lima and other Ohio oil refineries, potentially driving gas prices even higher . The proposed bill is misguided and ill-chosen.
The High Hazard Training Certification Act (House Bill 235) would replace flexible business discretion at Ohio’s four oil refineries with the harsh, heavy hand of the government, forcing them to hire 80% of their contract construction workers or contractors from apprenticeship programs by 2024. the legislation is a de facto hiring quota that requires an unnecessary solution looking for a problem.
Ohio has struggled to adapt to changing economic conditions and equip its workforce with modern skills for decades. Thriving economies need talented labor pools and the flexibility to adapt to rapidly changing markets. House Bill 235, unfortunately, would deprive Ohio oil refineries of both.
Under the guise of worker safety, the proposal tells employers how to train new employees and which employees to hire. These are decisions best left to companies who know the industry and the market, and the incentives aligned to achieve efficiency, safety and long-term success in the workplace. Government regulators lack this knowledge and incentive, and state-mandated employee training will not ensure safety. Ohio’s oil industry is already subject to state and federal safety regulations that could fill a phone book, and an aggressive bar of plaintiffs eager to sue “Big Oil” whenever it breaks the rules.
While doing little to promote worker safety, bureaucracy-enforced hiring quotas would make it even more difficult to train and acquire the required skills for new employees. And such quotas seem superfluous at best. Ohio already has over 20,000 active apprentices and 960 active apprenticeship programs, not because the government told them to, but mainly because Ohio employers and employees voluntarily decided that these apprenticeships provided valuable training.
And Bill’s timing, of course, couldn’t be worse. Like most countries, Ohio is suffering from a statewide labor shortage, and the coronavirus pandemic has widened existing gaps between employer needs and employee skills, making more difficult for companies to find qualified employees. Government mandates like House Bill 235 will reduce the available labor pool, making it more expensive for refineries like Cenovus to hire, and thereby increasing operating costs that will inevitably be passed on to drivers who have already struggling to pay the high gas prices at the pump.
Instead of telling private companies how and who to hire, state lawmakers should look for more market-based ways to make training workers easier and more affordable. Ohio’s TechCred program, for example, has successfully offered financial assistance to companies looking to invest in their employees. Rather than forcing companies to hire specific workers, this program helps them find the best person for the job and provides resources to help employers equip new hires with more skills. House Bill 235 replaces this flexibility and empowerment with rigid quotas and unfunded mandates.
With Ohio already lagging the rest of the country in terms of dynamism, innovation, and competitiveness, state policymakers should look for ways to make the workforce more flexible and responsive to market changes, Not less. However, the pending General Assembly proposal does neither. Instead, it will only make hiring more expensive and risk driving up consumer prices in the future.
Logan Kolas is an economic policy analyst at the Center for Economic Research at the Buckeye Institute and author of “Policy Solutions for More Innovation: Modernizing Ohio’s Policies to Sixteen New Economic Opportunities.” His column does not necessarily reflect the opinion of The Lima News editorial board or AIM Media, owner of The Lima News.