From the email, I sensed a profound need by Hoosiers to find joy in the problems of Illinois. Our neighbors to the west are fighting their way through a mess of their own making. They have forced themselves to raise taxes and cut services to correct, in part, their failure to fund their state and local pension plans.
Illinois’ difficulties prompted Indiana’s leaders to hunt like vultures for carrion on the other side of the border. We celebrate every family or firm that moves from the Land of Lincoln to the Hoosier state. Are there no Hoosiers moving to Illinois?
Readers of this column urged me to compare the economic records of the two states and thereby prove that our policies are superior to those of our embarrassed neighbors.
When it comes to private-sector jobs, Indiana has outperformed Illinois. We had a 1.7 percent decline in jobs from 2007 to 2013; Illinois fell by 3.2 percent over that period. We ranked 24th among the states in private job growth, while Illinois ranked 35th in the nation.
Neglected, however, by those who would clog dance to this news, is that the nation saw a decline in private-sector jobs of just 1 percent during those six years. Yes, Indiana did better than Illinois, but we did not do well.
We didn’t go down in manufacturing jobs as much as Illinois (14.2 percent) or the U.S. (13.5 percent); our fall was limited to 10.6 percent. Whereas, Illinois fell by 30 percent in the construction sector and the U.S. fell by 24 percent, Indiana managed a drop of “only” 18 percent.
Everybody wants to see more jobs in professional, scientific and technical areas. Across the nation, the number of such jobs grew by 6.1 percent; Indiana by 5.3 percent and Illinois by 3 percent. Should the Hoosier heart be warmed by outpacing Illinois while failing to exceed mediocrity?
Now let’s look at what people were paid for working in these two states. In 2007, private-sector workers in Illinois averaged $856 per week, $31 more than the average American worker. That same year, Hoosier workers averaged $766 per week, $90 short of the average Illinois worker, and $59 below the U.S. average.
Yes, earnings improved. Hoosier workers saw average weekly earnings climb by $58 over six years (8.2 percent), but Illinois had a $67 increase (8.5 percent); and, for the country, average earnings advanced by $101 per week (nearly 14 percent). In manufacturing, touted as the engine of our state’s economy, average weekly earnings rose by 16 percent nationally, 12 percent in Illinois and a measly 5 percent in Indiana.
Since inflation totaled 12 percent in this period, neither Hoosiers nor Illini had real gains in buying power.
Thus, we did less poorly than Illinois in job growth.
But workers in Indiana did worse than workers in Illinois in the money paid for their labors. Are our state’s policies responsible for this?
Morton Marcus is an economist, formerly with the Indiana University Kelley School of Business. Send comments to email@example.com.