Opinion and Taking Issue

KENNEDY: In Indy, it's still the economy, stupid

October 22, 2011

Sheila Suess KennedyMost of us remember James Carville’s admonition—the one that became the singular focus of the successful Bill Clinton presidential campaign—“It’s the economy, stupid!”

That laser-like focus on economic well-being was generally seen as a smart campaign tactic, which it was. But it was also smart policy.

Which brings us to the current campaign for mayor of Indianapolis.

Partisans have argued about the candidates’ respective visions—or lack thereof—and there have been the usual competing claims about public safety, neighborhood revitalization, tax increases and the consequences of selling off city assets. But addressing those issues—in fact, addressing virtually every single issue voters care about—depends upon the economic health of the city.

And that means good jobs.

It was Henry Ford who first recognized the importance of paying factory workers decent wages—not out of the goodness of his heart, or because he had some sort of humanitarian impulse (he wasn’t noted for either), but because he wanted them to be able to buy his cars. His logic—his recognition that success in business requires people with the means to buy your goods—seems to have escaped many of today’s officeholders.

The same logic applies to cities. You can’t create bike lanes, improve schools, hire police or pick up garbage without money. In Indiana, thanks to state-imposed tax caps that are starving units of local government, cities desperately need workers able to pay the taxes and fees we do impose. We also need to minimize the burden large numbers of jobless citizens place on municipal finances.

Which candidate is most likely to create the jobs we need? Indianapolis voters have a choice between a former deputy mayor for economic development and an incumbent with a jobs record we can examine.

So how has Ballard done?

According to the U.S. Bureau of Labor Statistics, 62,000 fewer people were working in Indianapolis this year than were working here in 2007. As IBJ reported in late August, “while Indianapolis was hardly alone in losing jobs during the recession … no other major Midwestern city has seen such a sharp decline.” Among Midwestern cities, Indianapolis lagged Pittsburgh, Nashville, Columbus, Milwaukee, Louisville, St. Louis, Cincinnati, Minneapolis, Kansas City and Chicago.

Those still working also lost ground; wages for private workers have declined 8.6 percent during the past four years.

This is stunningly bad performance.

To be fair, one reason for our pathetic showing is Gov. Daniels, who believes government should slash public employment to balance budgets—despite the loss of tax revenue and the added stress on social-service budgets that accompany such measures. Most economists believe such actions trigger a self-reinforcing downward spiral. If Ballard recognized the consequences of Daniels’ policy for Indianapolis, he certainly didn’t protest.

Indianapolis needs leaders who understand the connections between government actions and private-sector reactions—leaders who understand that employers don’t relocate their businesses just by comparing tax rates. (Don’t believe that? Look again at the list of cities outpacing us.) Businesses don’t move to places with bad public schools, troubling crime rates and other elements signaling a poor quality of life; they move to—or stay in—cities offering amenities like well-tended parks, efficient government agencies and convenient public transportation.

Given Indiana’s tax caps and other fiscal constraints, the only way the next mayor can do anything other than continue selling off public assets (and our children’s futures) is to create jobs and grow the tax base.

We aren’t stupid, and it really is the economy. Indianapolis—which used to lead—is lagging well behind our peer cities. Kennedy’s right—we can do better.•

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Kennedy is a professor of law and public policy at the School of Public and Environmental Affairs at IUPUI. Her column appears monthly. She blogs regularly at www.sheilakennedy.net. She can be reached at skennedy@ibj.com.

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