Unemployment

Good news, bad news in state employment report

March 17, 2014

Indiana’s unemployment rate is now the lowest it’s been since September 2008, but House Minority Leader Scott Pelath, D-Michigan City, said officials need to “take a longer look before gushing praise.”

According to the Department of Workforce Development in a report issued Monday, Indiana’s seasonally adjusted unemployment rate dropped 0.4 percentage points, to 6.4 percent, in January. That is lower than all neighboring states and 0.2 percentage points below the national average.

“Every Hoosier should be encouraged by today’s unemployment numbers, which show the largest one-month drop in unemployment in 20 years,” Gov. Mike Pence said in a prepared statement. “Indiana’s rate is now lower than the national average, and our labor force and population continue to grow.”

The Hoosier state added 4,600 jobs in the manufacturing sector in January, the most in the country. But Indiana also lost 7,100 private sector jobs, leaving the state at a net loss of 2,500 jobs for the month.

“While others may gush about ‘the largest one-month drop in unemployment in 20 years,’ I look at the report and find myself wondering many things,” Pelath said.

He noted all but one of the state’s metropolitan statistical areas – and 82 of the 92 counties – actually saw unemployment rise in January.

“These disparities only serve to heighten the concern that many of us have about the so-called ‘job creation’ engine that the governor, his administration, and his super-majorities like to tout so often,” Pelath said.

But Jerry Conover, director of the Indiana Business Research Center, said it is still too early to gauge the effectiveness of the recent administration’s job-creation strategies.

He said the Hoosier economy is closely tied to the national economy so these numbers may be result of the general economic upswing throughout the country.

But Conover also said Indiana has a “well-deserved” reputation as a business-friendly state. The legislature recently passed a bill that will give Indiana the lowest corporate tax rate in the country.

The lowering of the business personal property tax was one of the landmark items of the Pence agenda.

“With this legislative session’s accomplishments in cutting the corporate income tax rate, giving counties new tools for reforming the business personal property tax, and offering new opportunities for career education and retraining, we continue to work hard to ensure the future economic prosperity of our state,” Pence said.

The DWD – along with the U.S. Federal Reserve – cited January’s severe winter weather as one of the main reasons for a loss of jobs around the country.

Conover agreed with the assessment and noted that more than 9,000 jobs were lost in the areas of trade, transportation and utilities, and construction alone.

But that explanation was not enough for Pelath.

“People can talk about seasonal adjustments all they want, but I continue to be concerned about the raw employment and unemployment numbers,” he said. “Those tell me who has a job and who is able to take care of their family.”

Pence agreed that there is still more work to be done.

“Amidst this good news, we know that unemployment numbers are not a complete measure of the health of the economy,” he said. “Too many Hoosiers are still struggling, which is why we need to continue pushing to improve Indiana’s economic climate, to attract more jobs, and to make sure Hoosier workers have the skills they need for the jobs of the future."

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