State job-recruiting efforts are working well

Last month, economist Michael Hicks and the Ball State Center for Business and Economic Research released a study that is primarily focused on local economic development efforts. Yet several reports on the study, including IBJ’s “Ball State study: State too focused on landing ‘footloose’ jobs,” are clearly misguided.

In the study, Hicks notes “Indiana is not especially lavish with incentives when compared to other states.” And in a 2013 study, Hicks concluded Indiana’s largest incentive—EDGE credits—“provide a significant impact with respect to job creation.”

IBJ states Indiana reported providing $43,700 per job since 2010. This figure is from a separate study conducted by a non-academic organization, Good Jobs First, which Hicks notes is “not comprehensive.” These figures, moreover, encompass incentives committed from the state as well as local communities. Our year-to-date state incentives average $9,465 per job—just 21 percent of the $43,700 figure.

State incentives are performance-based. Companies cannot claim tax credits until they create jobs and support skills training for employees. We base incentives on new payroll rather than projected headcount to encourage increased wages.

IBJ states that we are too focused on attracting new business to Indiana, yet fails to mention the 47,701 new jobs that companies new to Indiana have committed to the IEDC since 2010. A majority—roughly 70 percent—of our agency’s efforts are focused on supporting the growth of our existing Hoosier businesses, and we’re still able to attract new jobs to Indiana.

IBJ ends with a conclusion from the CBER study, noting that “business location is much more dependent on quality of place than incentives” and fails to acknowledge that the state is already doing this through the Indiana Regional Cities Initiative. Hicks has praised this initiative and been complimentary of the efficacy of our agency overall.

Here at the IEDC, our strategy is working, with more Hoosiers now going to work than at any time in the state’s 200-year history.

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Jim Schellinger
Indiana Economic Development Corp. president