Indiana failing to maintain mediocrity

By Morton Marcus

“Shocking, is what I call it,” Sensation Shome, the radical activist said. “Did you realize there are 77 Indiana counties where the average compensation of employees is below the 2015 state average of $55,159? Only three counties (Kosciusko, Martin and Posey) exceed the national average of $65,569.”

“Well, this isn’t Lake Woebegone where all the children can be above average,” I replied. “Somebody’s got to be below average.”

“An irresponsible answer,” Sensa retorted. “You’d expect the state average to be close to the middle of all the counties. This way only 15 counties are above that average. Instead of something close to 50-50, we’ve got an 84-16 distribution. Don’t you think somebody should do something about that?”

“Who do you think can do something about it?” I asked.

“Well,” she said, “if the state legislature and the governor’s office can’t, then it’s up to the economic development people in each county. That means the local business communities, which have the most to gain, better get their acts into gear.”

“And how are they supposed to do that?” I said.

“How did farmers become so productive?” Sensa asked and then answered, “They tried new approaches to farming. They learned from each other, from their local extension agents, from visiting salesmen, reading about what was new and visiting exhibitions.”

“Don’t you think today’s business people do the same thing?” I said.

“Not from what I’ve seen in the Hoosier business community,” she answered. “There’s a lot of handwringing about the evils and dangers of change. Small business contentment with being small is an epidemic in this state.

“Worse yet,” Sensa continued, “Economic development is too focused on bringing in new businesses rather than getting existing businesses to grow. Many economic developers are ‘meeters and greeters’ rather than people with knowledge of how to guide and inspire an owner or manager toward growth.”

“Just look at the record,” she rolled on. “We talk about jobs and more jobs, but in this young century, the average compensation of Hoosier employees has grown by 2.5 percent a year while the nation has advanced by 2.9 percent annually.”

“We’re supposed to get excited about a 0.4 percent deficit in our annual growth of compensation?” I smiled my ironic smile.

“Yes,” Sensa chastised me. “We started out, in 2001, 10.8 percent behind the nation in average compensation; by 2015 we slipped to 15.9 percent lower than the U.S. figure. Do you realize what that meant for the average Hoosier employee?”

She didn’t give me time to develop a snappy answer. “In 2015, just keeping pace with the nation, still 10.8 below the national average, meant an extra $3,300 for that average job. Over the past decade that amount balloons to $24,000 in foregone earnings per Hoosier job.”

I had to admit, Hoosier workers, businesses and communities are missing out by failing to be as mediocre as they used to be.

Morton Marcus is an economist, formerly with the Indiana University Kelley School of Business. Send comments to letters@dailyjournal.net.