EYE ON THE PIE: Are big counties getting all the goodies?

August 13, 2007

Are the most-populated counties of the northeast and southwest corners of Indiana improving their economies faster than their regional neighbors? Indiana is very sensitive to this issue.

Throughout the state, people resent the presumed primacy of Indianapolis, which serves as the center of Hoosier government and business. Those outside Marion County claim that all the goodies go to Indianapolis and the rest of the state gets only the leftovers. Are the carpers right, or are they deluded by a residual anti-urban hostility from our more agrarian past?

Between 1995 and 2005, personal income and population were both growing more slowly in Marion County than in the state as a whole. The difference was very small for personal income, but for population, the difference was much greater.

With the slow growth in population, Marion County's per-capita personal income (PCPI) grew more than the state's. Already having PCPI 12 percent above the state average, Marion County's advantage grew to 16 percent above the state. Thus, while failing to keep pace with the state, Marion County's key measure of well-being improved.

On the employment side, compared with the state, Marion County showed superior growth in total earnings and earnings per job (EPJ), while failing to meet the state's rise in jobs. Of every $1,000 earned in the state, $231 were earning in Marion County in 1995. That figure rose to $244 by 2005. Of every 1,000 jobs in Indiana, there were 193 in Marion County in '95 but only 184 in '05. Clearly, what Marion County lacks in growth of raw numbers, it makes up in the important indicators of economic performance.

Does this condition exist in other parts of the state? Let's look at two geographic extremes: the northeast focused on Allen County (Fort Wayne) and the southwest centered on Vanderburgh County (Evansville). Each region has nine counties.

Allen County's personal income grew less rapidly than its surrounding region, while its population grew at a faster rate than the region. The result was Allen's PCPI was the slowest-growing in the region, 31.6 percent, versus 33.2 percent for the region.

Allen ranked as the second-slowest county in earnings growth and just average within its region in employment percentage gains. The result was that Allen County had an increase of 33 percent in EPJ, while its region grew by 36 percent. The evidence suggests that Allen is even weaker than its poorly performing region.

Vanderburgh County, at 1.7 percent, was below its region's population growth rate of 3.1 percent. Likewise, Vanderburgh did not match its regional personal income growth rate. But in each case the difference between Vanderburgh and the region was slight.

Vanderburgh outperformed the state in EPJ, but came in virtually tied with the region's 55.4 percent.

Thus, while Marion County continues to advance relative to the state, there seems to be no evidence that Allen and Vanderburgh counties are doing better than their respective regions.

Marcus taught economics for more than 30 years at Indiana University and is the former director of IU's Business Research Center. His column appears weekly. To comment on this column, send e-mail to mortonjmarcus@yahoo.com.
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