Welcome to a new year, fellow Hoosiers.
Given that 2016 will be an election year, Hoosiers will hear lots of rhetoric about Indiana’s economic performance, both from the incumbent administration and those seeking to replace it; a credible analysis of that performance is thus essential if we are to separate the wheat from the chaff.
Morton Marcus is an economist who spent nearly 40 years at IU’s Kelley School of Business, where he presided over a center that generated data about Indiana’s business climate. He is now retired (but by no means retiring), and he still writes a column carried by a number of newspapers around the state.
Let’s start with Real Gross Domestic Product (GDP), which Marcus defines as “the value (adjusted for inflation) of all the goods and services produced in a nation or a state, over the course of a year or a quarter of the year.” “
And how has the Hoosier state done by this measure?
The United States’ Real GDP has grown by about 13 percent in the last decade, while Indiana has added only 7 percent….If you look at the nation’s Real GDP each spring (the second quarter of the year), the progress made by Indiana every year since 2012 lags the growth of the nation. Indiana ranked 32nd with 2.8 percent compared with 5.8 percent for the U.S.
Then there is the question of jobs and wages.
The total of wages and salaries takes into account both how many people are working and what they make for their labors. Nationally, from the third quarter of 2005 to 2015 and after adjusting for price changes, wages and salaries grew by 13.2 percent. Here, in the Hoosier Holyland, the growth was 5.5 percent.
The news isn’t unremittingly negative: as Marcus tells us, “Non-durable goods were a winner; Indiana up one percent while nationally that sector was off by seven percent.”
But in durable goods, like autos, RVs and steel, the news was less cheery: “Indiana was down eight percent at the same time the country slipped six percent.”
All in all,
Over the past decade, the nation’s output and wages both grew by about 13 percent. In Indiana, however, they both trailed the U.S.; Hoosier output (Real GDP) grew by only 7.1 percent and wages by a mere 5.5 percent. Why aren’t Hoosier businesses and workers keeping pace?
As we head into 2016 and the inevitable political spin, it may be worth revisiting this analysis of actual economic performance—and considering whether we’d be better served by replacing our current Governor with someone less fixated on protecting retailers who want to refuse service to same-sex couples, and more committed to conventional economic development.