Crain’s Cleveland Business first published this opinion piece.

Recent energy policy and tax reforms give Ohio workers something to celebrate this Labor Day. The state and national economies face some headwinds and uncertainties, but Ohio is shaking off its Rust Belt image and emerging as a legitimate competitor in the digital age.

Ohio now boasts a higher labor market participation rate than the national average, and businesses that once fled the state for cheaper overseas labor have started to return. Data centers, advanced manufacturing plants and tech-heavy defense contractors have flocked to central Ohio, bringing low- and high-skill jobs and competitive wages with them. Across the state, private-sector job growth averaged 5,000 new jobs in the first six months of 2025 as high-tech companies hire construction workers, plumbers, electricians, drivers, administrators, engineers, data analysts, and scientists.

Manufacturing’s return to Ohio is no accident. State policymakers have taken strategic steps to attract new companies and encourage employment by creating a corporate, job-friendly environment.

Major energy policy reforms will increase Ohio’s supply of reliable, reasonably priced energy. These reforms will make it easier for companies to build electricity generators for their factories. The state has also provided energy producers with tax relief that will encourage additional investment and expansion. A stable, affordable energy supply remains vital to traditional and modern manufacturing, so Ohio has wisely worked to offer consumers dependable electricity that can keep plants and data centers running around the clock.

Gov. Mike DeWine and the General Assembly took another sound step this year in joining the growing list of states to adopt a single, flat-rate income tax. Ohio’s new 2.75% flat tax will be the second-lowest in the country and will help attract — and keep — talented workers.

Flat taxes reduce inefficiencies, increase fairness and transparency, and make tax liabilities easy to estimate. More importantly, low flat taxes spur economic growth and make states more competitive than their peers. So it is not surprising that, according to the Tax Foundation, most of the fastest growing states in the country have been southern and sunbelt states with either a low flat tax or no income taxes at all.

Ohio can build on these recent successes by continuing to pursue policies that will attract more workers and improve career opportunities. Training programs like Ohio’s successful TechCred, for example, offer win-win solutions for employees and their employers. Additional training gives workers new skills that help them earn higher wages, while providing companies with a higher-skilled workforce that can meet new challenges and consumer demands. Those higher earnings also yield more tax revenue, boost savings and investment, and will ultimately improve schools and communities. 
 
Fortunately, at the federal level, the Big Beautiful Bill will allow Pell grants to be used for short-term certificates.

Ohio should follow Washington’s lead and strengthen its community colleges and career technical centers, encouraging them to be nimble and responsive to the labor market and employer needs. Community colleges should tailor their programs to give students the skills needed to fill in-demand jobs. In return, Ohio should give community colleges their fair share of state funding and grant community college students the same access that four-year college students have to Ohio programs for some non-tuition expenses. Helping more high school graduates enter the workforce with community college or technical training will only improve Ohio’s labor pool, which is good for workers and for the companies that hire them.

Ohio workers and families have much to celebrate. Despite the state and national unemployment rate climbing, the state’s economy continues to rise and overcome broader challenges by embracing new technologies and attracting new and growing firms. Policymakers have pursued pro-growth energy and tax reforms that make Ohio more attractive to employers and more rewarding to employees.

More work remains to be done, but Ohio is still at the heart of it all.

Rea S. Hederman Jr. is vice president of policy at The Buckeye Institute.