11/09/2011 03:35 pm ET Updated Jan 09, 2012

Ohio's Collective Bargaining Key to Becoming America's Heartland Again

Having grown up in small town Kidron, Ohio, tucked between the Smucker's plant in Orrville, the Rubbermaid plant in Wooster, and the Hoover plant in North Canton, I can attest to the depressed wages and flagging industry plaguing Ohio.

Thanks to the U.S. tax, trade and labor policies of the last 30 years, the American heartland has suffered tremendously. Only now, in response to this month's Congressional Budget Office report (and recent reports by the UN Human Development Index and U.S. Census office, all showing America's increasing income inequality), is Washington realizing how those policies have made it very difficult for most of America to simply "get by".

Ohio's policymakers, furthermore, are making it even more difficult for Ohio's residents, by continuing to pursue budget cuts that ultimately eat away at education, health care, basic services or economic opportunity. The state government in Columbus would do well to reconsider.

Why, because Ohio's ability to provide for its population in these areas dramatically increases its capacity to lower its levels of violence. We know from the 2011 U.S. Peace Index, produced by the Institute for Economics and Peace, that the more Ohio (or any state) graduates its students, insures its residents, provides basic services, prevents pregnancy and infant mortality, and lowers poverty and inequality rates, the less prevalent and pervasive violent crime, homicide, incarceration, policing and small arms trafficking will be.

That ability is worth its weight in gold. For Ohio, a 25 percent reduction in violence would save it more than $3.6 billion annually, a 50 percent reduction in violence would save it over $7.2 billion annually. These monies would do wonders for Ohio's wage and industry growth.

So what should Ohio do now? First, in the short-term, it should pay heed to Jared Bernstein's assessment on the origins of the Occupying movement, which is also relevant for Ohio. The former chief economist to Vice President Biden recently noted that, "stagnant middle-class incomes, weak job and wage growth, health and retirement insecurity, and the average person's reduced ability to bargain for a fair share of growth are problems that developed way before the Great Recession, and they're blocking the opportunities of a large share of households." Bernstein's prescription: "Address these imbalances through, among other things, a stronger voice for workers to boost their bargaining power and, in turn, produce a fairer distribution of productivity gains; a higher minimum wage; strong wage subsidies so adults in low-productivity jobs can earn a living wage; direct job-creation measures to put people to work (to help address infrastructure deficit); and a Federal Reserve that gives full weight to the employment side of its mandate." This directly addresses Ohio's collective bargaining issue.

Second, in the long-term, for Ohio and America more generally, a report published this month by the Institute for Economics and Peace, titled "Structures of Peace", cites eight foci on which America should focus: well-functioning government, sound business environment, equitable distribution of resources, acceptance of the rights of others, good neighborly relations, free flow of information, high levels of education and low levels of corruption. Performing well brings high per-capita incomes and more peaceful, business-friendly, cohesive, trusting, equitable environments. It also brings greater resilience against external shocks -- economic, geopolitical, or natural -- and helps states like Ohio adapt quickly. Resilience is particularly important amidst financial instability, rising poverty and increasingly frequent and violent natural disasters.

Take a look at 'government effectiveness', for example, measured by quality of public services, civil service, policy formulation and implementation, and the credibility of the government's commitment to such policies. With US Congress's (and even Ohio Governor Kasich's) approval at historic lows, tax, labor and trade policies must better serve all Americans. Similarly, 'equitable distribution of resources' requires that states like Ohio make it easier for its residents to get ahead, get insured, get educated and get a job. And on 'high levels of education', the case needs to be made to taxpayers why education is key to sustained economic competitiveness. Beyond efficacy, equity and education, there is much work to be done on the remaining factors. But small steps will garner gains: a more peaceful America (at Canada's levels for example) yields $361 billion in annual savings and economic activity, making America financially sustainable in the short term and resilient in the long term.

Do this, and Ohio has a fighting chance at restoring that which first made it the "American heartland".

Michael Shank is US Vice President at the Institute for Economics and Peace. Follow Michael on Twitter. Follow the Institute for Economics and Peace on Twitter and Facebook.