State winners, losers in jobs, income

By Morton Marcus

Last week we reported on the poor performance of Indiana in terms of adding jobs (47th in the nation) and advancing incomes (48th). This week we’ll go down to the county level and see where there are bright spots and where conditions are dismal.

The rate of change in the number of jobs is a measure of economic success the press and politicos have identified as important. The U.S. Bureau of Economic Analysis reports, from 2005 to 2015, jobs in the nation grew, by 5.9 percent. Through that recession and recovery, Indiana jobs increased by just 2.3 percent. Yet 16 Indiana counties surpassed that national rate.

Of those 16 counties, four (Bartholomew, Decatur, Sullivan and White) stand out because they also saw average compensation for jobs grow faster than the nation’s 9.0 percent. These four are the superstars of a difficult decade.

(When we talk about jobs and wages in a county, we mean jobs located there, not necessarily the jobs and wages of people residing in that county.)

More puzzling are the seven counties (including Jackson and Newton) where compensation per job increased faster than the nation, but the number of jobs declined. In contrast, a different set of 16 counties (including Blackford, Dubois, Jay, Lake, and Vanderburgh) also saw declining numbers of jobs, with wages advancing faster than the state as a whole (2.3 percent).

The economic experiences of our counties are quite diverse. We have counties adding jobs very rapidly with very different results. Boone, Gibson, Hamilton and Hendricks counties were the leaders in the rate of job growth, each exceeding 25 percent in the 2005-15 decade. In Hamilton, the growth in average wages was barely greater than the state’s; Boone’s average compensation was a weak 1.6 percent, while in both Gibson and Hendricks average compensation fell.

In all, 80 of our 92 Hoosier counties saw real (adjusted for inflation) wages per job rise. By contrast, 56 counties lost jobs. On balance, only 33 counties had positive results in both measures of economic success.

In only a dozen counties did average wages fall. Of these, nine (including Henry, Howard and Fayette) saw both compensation per job and the number of jobs decline.

Do these nine counties deserve greater attention from state government? Is the past a rationale for compensatory action? This presumes the state has or should have a policy about where companies locate and which companies to assist in their expansions.

For decades no policy about the location of firms has seemed evident in Indiana. Let the firms decide where to locate. We’ll do as other states do: invest in whatever infrastructure is necessary for a particular company, train whatever workers are needed, reduce taxes, and remove other barriers to get whatever jobs are available. We even believed changing time zones would be a job creator.

We grow hardwood in Indiana. We make steel in Indiana. Where do we grow or make backbones?

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