Eye on the Pie and NEWS TOPICS and Opinion and Banking & Finance and Economic Development

Commuting shifts $87 billion in Indiana

April 6, 2009

My excitement must have been evident to everyone on the street. I was being pulled in a rickshaw though the Indianapolis streets that Mayor Ballard had designated as the local Chinatown. There was a bicyclist providing the muscle power. He was about my age, an older fellow who needed the job, probably to supplement his diminished pension.

This particular job, as I understood matters, had been arranged for him by his medical insurance company in one of those public-private partnerships that are so popular. The company said that the exercise would do him good and that meeting people would lift his spirits. This would lower his insurance rates.

If not, the exercise would kill him and help keep insurance rates low for everyone else. It's what they call a win-win situation in health care. One way or another, the insurance company benefits and passes the gains onto others. Or so I'm told.

However, the rickshaw ride was not the source of my delight that day. I was reading the spreadsheet I made from my latest downloading of data from the U.S. Bureau of Economic Analysis. It was making my skin tingle with delight. I decided to share my glee with the bicyclist.

"Did you know," I said, "that Marion County gets only 20 cents back for every dollar that flows out with commuters? In total, this county sent out $13.3 billion in 2006 and got back just $2.6 billion. That's a net outflow of $10.7 billion."

I expected a gasp of astonishment, but my words must have overwhelmed him.

"Yes," I continued, "only two other counties have a worse return from our open-county borders: Howard (Kokomo) and Martin (Crane).

"At the other end of the spectrum is sweet ol' Brown County, where they see $12.45 flow in from commuting (not tourism) for every dollar flowing out. Furthermore, there's Washington (Salem), Morgan (Martinsville) and Parke (Rockville), which are also up there with high ratios of inflows to outflows of earnings (what people make by working for themselves or someone else).

"Now you might think that I'd call them parasite counties, because they seem to be sucking the blood out of some nearby urban area, but I'm not doing that. It would be impolite. After all, some places have nothing to offer other than residential services in exchange for jobs. And there's nothing wrong with specializing in housing people and giving them and their families a quality of life they may not be able to get in the urban setting."

My listener did not seem to be listening. Yet I had to believe that he was as enchanted as I by the data. Thus, I proceeded to whet his appetite.

"Indeed," I intoned, "fully 40 of our 92 counties derived more than half of their earnings from commuters bringing back their compensation from somewhere else. By contrast, only four counties (Martin, Gibson, Ripley and Ohio) had more than half of the earnings generated within their borders leaking out to other places"

I watched closely, but he just kept pedaling in a rhythmic fashion. Not to let the matter go, I said, "You know I have the data for each of our 92 counties right here. I could tell you about any one or several that might interest you."

He pedaled on, ignoring my offer. Exasperated, I waited until we were stopped at a traffic light and then hopped down from the rickshaw. Seeing me on the ground, he said, "Four dollars."

As I paid him, I saw the sign, "Deaf driver—please do not distract with attempts at conversation." I knew he wasn't indifferent to those data. Who could be?
___

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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