Regular readers will recall that just a week ago I expounded on the latest annual personal-income data for Ethereal Andiron, who had trouble sleeping. Lo and behold, I received a similar call this week.
“Mr. Marcus,” she said, “you don’t know me, but I heard that you have mysterious powers to help the sleepless find a pathway to slumber.”
“No,” I started to reply, but was interrupted.
“Please,” she entreated, “do for me what you did last week for Ethereal? She told me all about it and I’d like to try it.”
“No,” I stated firmly. “Economic data are not a means for escaping consciousness.”
“I’m prepared to be very generous,” she said with a suggestive intonation that made me nervous.
“Just a sample,” she cooed, like one of Neil Simon’s Pigeon sisters.
“OK, a sample, on the phone only, with no conversation,” I stipulated. Settling-in sounds came over the phone line.
“The U.S. Bureau of Economic Analysis,” I began, “has just released quarterly personal-income data through the second quarter of 2010. They show Indiana in third place among the 50 states—third from the bottom—for income growth during April, May and June.
“Indiana’s average quarterly growth rate over the past two years, after adjustment for inflation, was a sad -0.25 percent, 36th down from the national leader, West Virginia, which grew 0.48 percent.”
I heard only heavy breathing from the other end of the phone line.
“It’s fairly clear why Indiana did worse than the nation,” I continued. “In each of the three major components of income, we trailed the nation over the past two years. Hoosier earnings from work fell 3.5 percent, compared to a national decline of 2.8 percent. The returns on capital (dividends, interest, and rent) dropped 7.3 percent in Indiana, more than the 4.8-percent national setback. Finally, our government transfer payments (mainly Social Security and unemployment compensation) rose 16.6 percent—1.7 percentage points below the national increase.
“The story goes on: Business owners [proprietors] saw their earning fall 10.6 percent in Indiana, while the national decline was only half that much. Ironically, Indiana’s state and local government employees received 6.1 percent more in earnings in the second quarter of 2010 than in second-quarter 2008, compared to a less generous 3.8-percent increase nationwide. This does not mean that individual workers got pay increases. It could be that we just expanded government employment.
“Did that do what you wanted?” I asked my unknown caller.
“Hardly,” she whispered. “It was all so exciting.”
“Well,” I admitted, “it does paint a picture different from that being shown to voters around the state by various administration officials. Although I cannot fault their numbers, I don’t think that the number of jobs is really more important than the income generated by those jobs. In 2009, ordinary Hoosier workers were paid $6.8 billion less than they received in 2008. Think about how many hamburgers or haircuts can be bought with $6.8 billion.”
I’m thinking and thinking,” she panted.
“Didn’t put you to sleep?” I asked.
“No, I’m going to toss and turn all night,” she said provocatively.
I hung up the phone very quietly, but very quickly. Frankly, I get uneasy when numbers stimulate anything below the neck.•
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 [email protected].