Morton J. Marcus is an economist formerly with the Kelley School of Business, Indiana University. His column appears in Indiana newspapers.
What’s important to watch in the economy? If you listen to the politicians, it’s the monthly number of jobs nationally, statewide or locally. They generally try to take credit for all the gains and avoid comment about any losses.
If you pay attention to the media, it’s the Dow Jones Industrial Average that’s important. This daily stock market figure is often inconsequential and understood by fewer people than ordinarily attend IU football games.
Yet the political season is upon us again (did it ever leave us?), so let’s talk Hoosier jobs.
The number of jobs in Indiana for 2014 was 20,000 shy of three million. Several pols and their pundit pals were ecstatic about being so close to Indiana’s peak jobs number reached back in 2000 at 3,003,500.
With the hot temperatures of the season, we prefer not to chill the enthusiasm of Hoosiers in heat. Nevertheless, it should be noted that in 2000 there were 6,080,000 residents of Indiana. At that time, the number of jobs equaled 49.4 percent of the total population. If that same percentage is applied to the 2014 population, then our state “needed” 3,259,000 jobs, or 278,000 more than we actually realized in 2014.
We don’t want any politician traveling around declaring Indiana has a “shortage” of 278,000 jobs. But let’s not hear that we’re close to our all time high number of jobs. That previous peak may be meaningless in an economy where major changes have taken place in the intervening 15 years.
It is true that, by 2014, Indiana added 189,000 jobs (6.8 percent) from its 2009 low. But this achievement is merely the rebound from the employment decline (200,000 jobs) we call the “Great Recession.”
This bust and boom was clearly evident in the Elkhart-Goshen metro area. Here was the highest percentage job gain in the state (26 percent) from the 2009 low. Yet, while adding 25,800 jobs in the recovery, Elkhart-Goshen workers will not forget the loss of 34,400 jobs from the 2006 peak to that low point in 2009.
Columbus placed second in the recovery with a 20 percent rise in number of jobs, followed by the Kokomo metro area where the rebound was 15 percent. The Indianapolis mega-metro had a nine percent increase from its 2009 level.
In all the joy exuded by our political leadership about the state’s recovery, you might have missed the fact that three Hoosier metro areas in 2014 had fewer jobs than they did in 2009. Terre Haute was short 2,400 jobs (down 3.3 percent), Michigan City-La Porte was off 1,400 jobs (-3.2 percent), while Bloomington had an insignificant shortfall of just 200 jobs or 0.3 percent lower than its 2009 level.
Yes, it’s good to be encouraged by signs of improvement in our economic condition. However, the euphoria pouring from the Statehouse over the past months has been excessive. But what else do they have to trumpet?