Indiana jobs situation improving, but is economy better?

Jul 18, 2010 — The Times

Jul. 18, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- Strudel Morceaux, a junior journalist, asked, "Is it true that Indiana's economy has turned around?"

"I cannot answer that question," I said.

"What?" Morceaux said. "You're the economist and you don't know what's happening with Indiana's economy?"

"What," I asked, "is Indiana's economy?"

"Now you're playing mind games," Morceaux said.

I replied: "Indiana's economy is measured in different ways and judged in still other ways. For many people, an economy is doing well if it is adding jobs. For others, an economy's performance is judged by its unemployment rate. Those are only two of many measures."

"Enough," Morceaux said, beginning to flake.

"Indiana's latest unemployment rate was 10 percent for the second consecutive month," I said. "That's not satisfactory but better than the 10.6 percent of a year ago. The decline in the number of persons employed that lasted 23 months seems over. From February 2008 through December 2009, Indiana had a decline of 284,500 workers holding jobs.

"Then, in the first five months of 2010, Indiana enjoyed an increase of 23,100 persons employed. This represents just an 8 percent recovery -- not quite enough to set off firecrackers."

"So," Morceaux said confidently, "we've hit bottom and the turnaround is in progress."

"There is reason to say that," I said. "When we look at jobs, rather than employed persons ..."

"Hold it," Morceaux said. "Every job is filled by a person."

"Yes," I agreed, "but many people hold more than one job. Jobs are not equal to the number of persons working. Plus, some Hoosiers work outside Indiana and some Indiana jobs are held by people living beyond the Hoosier frontiers."

"Piffle," Morceaux said, dismissing the distinction.

"Possibly piffle," I said. "Yet it explains why the number of jobs and number of employed persons are different. Nonetheless, let me continue.

"Every month from March '08 to April this year, the number of jobs in Indiana was less than in the same month a year earlier. You might say we hit bottom in June '09 when the number of jobs fell to 201,400 fewer than in June '08. Since then that difference has been shrinking. Now, in May this year, for the first time in 27 months, the number of Hoosier jobs exceeded the level a year earlier.

"The truly good news is that for 22 months, stretching back to spring '08, the number of jobs in Indiana fell by 229,400. Since the start of this year, we've added 53,200 jobs, a recovery of 23 percent of our lost jobs."

"Then you'll agree that we're on the road back," Morceaux said triumphantly.

"No," I said. "I want to know that average wages are rising for Hoosiers. I want evidence that government revenues are increasing and that more money is being spent on the necessities of life, things like education, transportation, communications and public health. It won't do us any good to meet the usual demand for Halloween costumes if we're not investing in our future."

"You just won't accept the good news, will you?" Morceaux said angrily.

"Right," I said. "We have a long-term deficit of responsible spending in this state. The restoration of things as they were will not lead to a productive, competitive economy tomorrow. Patting ourselves on the back because we moved part way back from a business-cycle low is deceptive and cynical; it might be acceptable from a political candidate, but not appropriate from you as a serious observer of our state's economy."

"I'm sorry I asked," Morceaux said. "I was just looking for a quick quote."

Opinions are solely the writer's. Morton Marcus is an economist, author and speaker formerly at the Kelley School of Business, Indiana University. He can be reached at mortonjmarcus@yahoo.com.

Newstex ID: KRTB-0129-47057403