Oxford News

WEST CHESTER TWP. — Price inflation, high tax rates and work force concerns were among the issues most troubling to businesses as discussed by a panel of four area business leaders during the Regional Development Forum in West Chester Twp.

AK Steel Corp. chairman and CEO Jim Wainscott, LCNB Corp. chairman and CEO Steve Wilson, Miami University economics professor Tom Hall and Miller-Valentine Group CEO and senior partner Bill Krul discussed how the slumping economy, employment issues, education and the housing market have impacted the way residents should expect to do business.

Increases in almost every market, including education, raw materials and construction, are raising concerns about unchecked inflation, the panelists said.

"The biggest factor affecting our industry is the dramatic rise in cost in everything we consume to produce finished steel," Wainscott said.

He cited a 90 percent increase in iron ore — a key component in making steel — as the price has tripled over the past three years. As BRIC (Brazil, Russian, India and China) countries develop they increase their demand for the staples of a developed society, such as raw manufacturing materials and fossil fuels, spiking the price globally, he said.

While inflation may be helping the Miller-Valentine Group collect more for its rental properties, Krul said it's also increasing their construction costs for new ones.

"The key is making sure you have highly trained people who can move on a dime when the market says move," he said.

In higher education, tuition has risen seven times faster than the Consumer Price Index, with colleges passing everything from employment to new facility costs off to their students, Hall said.

Soon, schools will have to take responsibility for their costs as their student base is depleted.

"We're about to have a (tapering) off of young people to be college students," he said. "So they can't keep raising tuition over the price index."

While the Federal Reserve has been cutting interest rates to give consumers a break, Wilson said they should be raising them to combat inflation.

"Instead of focusing on the short term this year, we need to be a lot more concerned about inflation in the long term."

Otherwise, he said consumers can expect many more increases in their food, health care and energy costs, he said.

It's been especially hard in Ohio over the past several years, Hall said.

"Ohio's economy has been weakened over the past several years relative to the rest of the country," he said.

For a family with an average annual income of $45,000, they will lose 46.55 percent through taxes. Overall, he said, Ohio has moved from the 30th lowest-tax state to the top 10.

With over 100,000 manufacturing jobs lost, there's a high rate of unemployment, but not necessarily a pool of viable employees for businesses to choose from, Hall said.

Companies on limited budgets need employees with very specific skills to fill vacancies. In those cases, training, education and a clean background are key, Wilson said.

"You would think in an economic downturn you would have a great selection, but it's difficult," he said.

The Cincinnati Business Courier and Dayton Business Journal collaborated on the event, hosted at the Savannah Center.

Contact this reporter at (513) 705-2843 or jheffner@coxohio.com.