Editor's note
Sheila Kennedy, author, attorney, and political observer offers her take on current issues on this week’s Who Gets What? podcast, easily available at mortonjohn.libsyn.com.
Just because certain federal appointees are unfamiliar with the use of factual material does not mean the rest of us need be so handicapped. Thus the scare media, which is not exclusively left or right, D or R, are playing fast and loose with the news. How important are the personnel cuts that have been, or will be made by the federal government to the economy of the United States and the separate states?

(OK, I hear the critics. Yes, I excluded the rest of the world where children will starve, the ill will die, and some may not play football (soccer) again. My focus is on a limited set of economic factors and does not include other significant data including jobs lost, indirect and income induced effects that hype the numbers, homes burnt, gallons of water polluted, children deformed by radiation, to say nothing of the unmeasured deliberate intellectual dishonesty of the U.S. Congress.)

Let the truth be known. What is being done by the current administration is merely an intensification of processes that date back decades. In 2003, federal civilian wages and salaries constituted almost 3% of all wages and salaries in the nation. By 2023, the figure was 2.5%.

The compensation of the swamp dwellers has not keep pace with all the “good” folk who did not work for the federal government.

In only 8 states between 2003 and 2023 did the share of wages and salaries earned by deep state workers (as we Musk call our civilian federal employees) increase. Everywhere else, that share fell. As expected, in 2003, the District of Columbia had 33% of all wages and salaries originating in federal employment. That fell to 28% by 2023. Who gained? Mostly Virginia and Maryland.

Indiana’s federal civilian workers had a small decline of 0.16%, tied with Mississippi. Indiana’s federal civilian wages and salaries went from 1.8% to 1.7%. of all wages and salaries.

But what you will hear is that Hoosiers depend on federal civilian jobs for more than $3 billion. What you won’t hear is that the total of Hoosier wages and salaries exceeds $202 billion. That loss would be hardly enough to make a ripple in the flow of income unless they are all are dismissed.

Want to get excited about Indiana’s economy? Ask the folks who have been our champions for the past 20+ years why we went from 2% of the nation’s wages and salaries to 1.7%. Is it population loss? Retirement of older workers? Are our workers not as good as they used to be? Are we losing out to other states in attracting and keeping folks with better earnings potential because of our schools? Or is it the switch from Central Time to Eastern Time for most of the state for most of the year?

Remember to keep your Eye on the Pie, and don’t worry about the crumbs.
Morton J. Marcus is an economist formerly with the Kelley School of Business at Indiana University. His column appears in Indiana newspapers, and his views can be followed his podcast.

© 2025 Morton J. Marcus

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