A skeptic would say, “Small potatoes when compared to the nearly 3 million jobs Indiana currently has.”
Let’s put 22,600 jobs in perspective. That number exceeds the number of jobs added in Indiana in 2007 when job growth (December-to-December) was 5,800. It also exceeds job growth in 2006, which was 13,400. The reader proficient in arithmetic will immediately recognize that 22,600 jobs are more than those gained by Indiana in 2006 and 2007 combined.
IEDC added that, since January 2005 (incidentally, when Gov. Mitch Daniels took office), “nearly 500 companies have committed to create more than 60,000 jobs in Indiana.” That number is more than twice Indiana’s average gain in jobs (27,800) between 1990 and 2007.
No one expects all those new jobs to be added in a single year. But the aggregate number is impressive. The Hoosier state has gained more than 60,000 jobs in only four years between 1990 and 2007.
The announcement by IEDC is particularly promising because it seeks high-paying jobs in growing sectors of the economy with firms that are well-established.
Coming as it does at the end of 2007, the IEDC report is most welcome because Indiana’s gain of 5,800 jobs in the past year gave us a job-growth rate of just 0.2 percent, the fourth-worst among the states. Only Minnesota, Ohio and Michigan posted lower job growth.
Since 1990, Indiana has averaged a 1.0-percent job-growth rate. This earned our state 39th place among all states, behind leaders Nevada, Arizona and Utah. The nation saw an average job growth rate of 1.4 percent.
Perception of growth depends not only on the rate of growth, but also on the volatility of those growth rates. If we had a boom-or-bust economy, that would be high volatility, leaving businesses and their workers with a great sense of uncertainty. Michigan, New York and Connecticut led the nation in such volatility, while Montana, Idaho and Wyoming enjoyed more tranquil years. Indiana ranked 12th in volatility, between Maine and New Jersey.
On the positive side, in 15 of the past 17 years we had job growth and in only two years did the state lose jobs. But those two down years were right in a row, 2000 and 2001, when we lost 104,400 jobs from our peak of 3.0 million in December 1999. To date, Indiana’s December employment has not regained that high level; in 2007, our number of jobs was still 17,000 below that peak.
Thus, it is with considerable hope that we greet the most agreeable news provided by IEDC of its expectations. But, cautious Hoosiers will ask, will those expectations be met? What does it mean that “nearly 500 companies have committed to create more than 60,000 jobs in Indiana”? What constitutes a commitment?
The time frame for IEDC extends to 2012, when a second Daniels term would expire. Are there any assurances that those 60,000 jobs will materialize? What happens if they do not? One of the firms on the list, the German company Getrag (1,400 automotive jobs promised for Tipton County), suspended construction recently. Of course, it is just a temporary glitch, something like a market correction, but what if … ?
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 firstname.lastname@example.org.