By Morton J. Marcus, an economist formerly with the Kelley School of Business, Indiana University
A fine jewel can be enjoyed from many angles. The same is true with economic statistics. As we approach the next legislative session, it is important that the General Assembly and the people of Indiana understand what’s going on in our economy.
But to understand, we need to do some work, to dig into some numbers.
How is Indiana’s economy doing? In May of 2000, we had 3,013,800 jobs in the state, an all-time high. This number bottomed in July 2003 at 2,885,100 (a loss of 128,700 or 4.3 percent).
In September 2005, we had 2,968,800 jobs, a gain of 83,700 jobs or 65 percent of what we lost earlier. But we are still 45,000 jobs (1.5 percent) short of our previous high.
Or you could say we still have 35 percent of what we lost to recover. At our current rate of job formation it could take another 18 months or more to exceed three million jobs once more.
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 first quarter in 2001. Here we find some disturbing facts. There are fewer jobs in 61 of our 92 counties in 2005 than in 2001.
The greatest numbers of jobs were lost in Marion (down 14,800), followed by Allen, Delaware, Lake and Madison. In percentage terms, job losses were greatest in Switzerland and White counties (down 17 percent), followed by Fayette, Delaware and Benton.
The winners in the jobs derby: Hamilton (up 13,600), Elkhart (up 9,600), and Hendricks (up 8,800). In percentage terms, 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.
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 by $1.8 billion (up 5.8 percent).
But, after adjustment for inflation, the disturbing truth is that quarterly wages in Indiana in 2005 were $721 million (up 3.1 percent) less than in 2001.
At the county 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 by $119, in Gibson County it was an $89 increase (up 62 percent). But in Ripley County the real decline was $130 while it dropped $94 in Posey County.
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?