Eye on the Pie and Opinion and Government

MARCUS: State moves forward, with long way to go

January 1, 2011

Congratulations to Gov. Mitch Daniels and his administration on their development and implementation of the Indiana Transparency Portal. It’s a grand start to detailed information about state and local government activities.

My hope is that this effort will continue during and beyond this administration. It is not easy, inexpensive or comfortable for governments to expose their finances and operations to the public. A new administration could easily drop the good advances made by this administration in the past six years.

Before my friends in state government become too comfortable, let me suggest there is much they could do in the coming year that would improve our knowledge and understanding of our state: In addition to making public much more information than is now available (are you listening, Department of Revenue?), they could “work” the data they do release.

Take a simple example from the Indiana Department of Workforce Development—the source of most of the economic data about the state. We learn the unemployment rate for each county each month. How many counties are experiencing rising or falling rates, with plus or minus 0.1 percent considered as unchanged? Between November 2009 and the same month in 2010, 34 Indiana counties had rising unemployment rates, while 44 declined and 14 remained unchanged. This is basically good news.

The headlines reported, appropriately, that the state’s unemployment rate (not seasonally adjusted) was unchanged at 9.4 percent. But that hides the fact that the employment picture improved in almost half of the state’s 92 counties.

In 2009, the range between the highest unemployment rate (15.1 percent in Elkhart County) and the lowest (5.4 percent in Daviess) was 9.7 percentage points. That range narrowed in 2010 to 7.6 points, as Elkhart’s rate fell to 13.3 percent and Daviess’ rose to 5.7 percent.

Over the course of the business cycle to date, November 2007 to November 2010, Monroe County has been least affected, with a rise in its unemployment rate of just 2.7 percentage points; Elkhart, by contrast, was the hardest-hit, rising 8.7 points.

In a national perspective, our November 2010 unemployment rate ranked Indiana 12th-highest in the country, tied with Idaho and Tennessee. The same 9.4-percent rate, a year earlier, was 17th-highest in the United States. Over that one year, our unemployment rate remained unchanged, but our relative position worsened.

When the recent recession started in November 2007, the Hoosier unemployment rate was 4.3 percent, with the nation standing at 4.5 percent. In the latest November data, we were at 9.4 percent and the country sat at 9.3 percent. These small differences between Indiana and the United States make it look as though we and the nation are tracking along together. 

A deeper look tells a different story. In 2007, only 29 of Indiana’s 92 counties had unemployment rates greater than the national figure. Let’s call these 29 counties those with “high” unemployment rates because they were more than 0.1 percent above the national rate. By 2010, Indiana had 49 counties with “high” unemployment rates. Of these 49 counties, 26 were “high” also in 2007. Only Greene, Owen and Ohio counties escaped from the “high” group of 2007.

These simple descriptive statistics could be used by DWD regularly to tell the story of Indiana’s battle with unemployment. But there is a problem with knowing such data—someone might think the state has a responsibility to be aware of what’s happening and to do something about it. Such thinking and such expectations might disturb those who prefer “calm waters.”•

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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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