But to understand, we need to do some work, to dig into some numbers.
How is Indiana’s economy doing? In May 2000, we had 3.01 million jobs in the state, an all-time high, according to the Indiana Department of Work Force Development. This number bottomed out in July 2003 at 2.89 million (a loss of 4.3 percent). This September, we had 2.97 million jobs, so we had regained 65 percent of what we had lost. But we are still 45,000 jobs short of our high. At our current rate of job formation, it could take another 18 months or more to exceed 3 million jobs once again.
Now, just for the sport of it, let’s dig deeper and look at the county level. The latest county data are for the first quarter of 2005. We’ll compare them with the same quarter in 2001. Here we find some disturbing facts. There are fewer jobs in 61 of our 92 counties in 2005 than in 2001.
In percentage terms, job losses were greatest in Switzerland and White counties (down 17 percent), followed by Fayette, Delaware, and Benton. The big winners were Hendricks (up 30 percent), Gibson (up 29 percent; can you say Toyota?), and the Indianapolis triplets: Hamilton, Hancock, and Boone at up 17 percent each. Check out the accompanying chart for more details.
Jobs are not the only way to measure the economy. We can also look at the payroll generated by those jobs. If you just look at the numbers offered by the U.S. Bureau of Labor Statistics, quarterly wages for Hoosiers rose 5.8 percent. But, after adjustment for inflation, the disturbing truth is that quarterly wages in Indiana in 2005 were 3.1 percent less than in 2001.
At the local level, 25 counties saw a nominal decline in total payrolls, but the inflation-adjusted payroll dropped in 65 counties. Naturally, as the largest county, Marion had the greatest real-dollar decline (nearly $400 million), but Fayette, White, Delaware and Randolph suffered the greatest percentage real declines.
When the total payroll is divided by the number of jobs, we get the average wage per job. That’s an important number for politicians who could be fooled by the fact that nominal (unadjusted) wages per job went up in 84 of Indiana’s 92 counties. But when we bring in inflation, average wages climbed in only 33 counties. In 59 of our 92 counties, real average wages per job declined.
Kosciusko County’s average real wage rose $119, but in Ripley County the real decline was $130.
How do these disparities fit into the state’s economic programs? Is your legislator thinking about this as he/she prepares for the election of 2006?
Marcus taught economics more than 30 years at Indiana University and is the former director of IU’s Business Research Center. His column appears weekly. To comment on this column, go to IBJ Forum at www.ibj.comor send e-mail to email@example.com.