IBJOpinion

MARCUS: Politicians have little influence over jobs

Morton Marcus
October 5, 2013
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Morton J. MarcusGovernors and mayors normally talk as if they are personally responsible for bringing jobs to their states and communities. This is nonsense.

Outside of jobs with the government itself, elected officials have little to do with employment decisions.

Tens of thousands of private-sector decision-makers are in control. The best elected officials can do is blow the horn for their home areas, as Gov. Pence is doing with his 15-second ads on a Times Square digital billboard.

It is, however, in the nature of things that politicians will pose and prance as if their programs were the decisive factors in increasing employment. None of them will admit the possibility that those same actions could be the reason for unemployment.

Let us then look at the size of the tasks our governor and mayors face: As of July, Indiana’s jobs (full- and part-time) numbered just 28,100 fewer than our July peak of 2007. That is less than 1 percent of the current number of jobs.

You could say Indiana is within easy reach of wiping out the job deficit of the Great Recession.

Three Indiana metro areas (Columbus, Indianapolis-Carmel and Lafayette) had more jobs in July 2013 than they did in July 2007, having reached historic peaks for that month. They are in the best shape among the 14 Hoosier metro areas defined by the U.S. Bureau of Labor Statistics.

The remaining 11 metros have job deficits off their peaks ranging from 2 percent in the Evansville metro to 20 percent in Anderson’s metro. The peak July for Evansville was reached in 2006, whereas Anderson , in a long-term down draft, last peaked in July 1995. No other metro has a longer period of struggling to regain its former level of jobs.

Elkhart-Goshen’s shortfall of 17,400 jobs is 15 percent of its current employment level, off a peak reached in 2006.

Kokomo’s metro and that of South Bend-Mishawaka had July peaks in 2005 and also (along with Michigan City-LaPorte) have deficits in the double digits (12 percent and 11 percent).

Lesser deficits are to be found in the Fort Wayne and Terre Haute metro areas (5 percent each) as well as in the Bloomington, Gary and Muncie areas (4 percent each).

While these latter figures are numerically small, they remain blotches on the shining face each mayor would have for his or her community.

Job growth is not really a local matter. In each community, businesses depend on the economic vitality of the region and the general health of the national economy.

Other than that, economic development as practiced by localities and states is a form of beggar-thy-neighbor.

Draw jobs from others by competing to have either the best of services or the lowest taxes. Make claims about the quality of your labor force while existing employers complain about the deficiencies of that same body of workers.

These are the tactics of job creation our leaders know best and employ the most.•

__________

Marcus taught economics for more than 30 years at Indiana University and is the former director of the university’s Indiana Business Research Center. Send comments on this column to ibjedit@ibj.com.

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