Eye on the Pie and Opinion

MARCUS: Where are 108,000 missing Hoosiers?

December 12, 2009

In my fantasy world, the country singer asks, “Are you ready for some data, some labor market data, for the nation, for the states, and for Indiana counties?” Now those are words that stir the blood and stimulate the imagination.

If you are ready, here we go. During the two years from October 2007 to the same month this year, the number of people employed in the United States fell 7.7 million. At the same time, the number of people unemployed increased 7.8 million. That seems logical. In a simplified world, where there are no part-time jobs, a person loses a job and becomes one of those who are unemployed. The number unemployed is larger than the number of job losers because population growth adds to the labor force.

When we come down, however, from the celestial to the mundane, from the nation to the states or counties, the story is more complicated. During the same 24 months, Indiana saw the number of employed people drop 267,000, while the number of unemployed rose only 159,000.

Remember, labor force = employed + unemployed. If the number of employed goes down 267,000 and unemployment rises 159,000, this leaves a decrease of 108,000 in the labor force. Should the Legislature investigate what happened to these 108,000 Hoosiers?

Did they die? Did they retire or go back to school? Did they move somewhere else to seek employment? Those people represent 41 percent of the decline in Indiana’s employment. Twenty of the 50 states had decreases in the size of their labor forces. Our decline of 3.4 percent was the third-highest, behind Kansas and Alabama.

It might be that many of those who disappeared statistically from Indiana moved to South Carolina, Rhode Island and Texas. Only those three states gained in the number employed. Of course, this is just speculation. The data do not reveal where the missing 108,000 are to be found, but they’re not all on vacation at Disney World.

At the county level, where the state had a decrease of 8.6 percent in the number employed, Elkhart County ranked first, with a decrease of 18.6 percent. But 48 percent of Elkhart County residents who lost their jobs disappeared from the labor force.

Where are these missing workers? In Gibson County, 67 percent of those who lost employment went where? In Monroe, Sullivan and Vanderburgh counties, more than half of unemployed people also disappeared from the labor force.

We are not trying to be alarmist. But according to the statistics, in 87 of our 92 counties, there have been employment declines that have not been offset by unemployment increases. Therefore, their labor force figures fell.

The answer must be people leaving the state, since no Indiana counties realized an increase in employment in those two years. In addition, only five Hoosier counties had labor-force increases, and these totaled a mere 760 people.

Why should we be concerned about these numbers? They determine the unemployment rates that are used to allocate federal funds. If they are far off base, maybe your county is being shortchanged. No doubt the good people who put together these data for the U.S. Department of Labor will explain the points I don’t understand. I look forward to hearing from them.•

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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. He can be reached at mmarcus@ibj.com.

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