Patrick M. Barkey, Director, Economic and Policy Studies, Miller College of Business, Ball State University
Fifteen years ago, a well known economist who was also president of the American Economic Association published a study that said something amazing. Of all of the things that the American economy produced, less than 20 percent were physical goods that could be weighed and measured.
You can bet that percentage is even lower today. But many of us, especially here in the industrial Midwest, can’t quite accept the idea that you can build a prosperous economy without having humming assembly lines and rolling railroad cars, making and shipping products to put on shelves.
Consider the announcement that Sallie Mae, a leading provider of student loans, will operate a 700 worker debt collection facility in Muncie, as part of our education. No smokestacks, no fork lift trucks, and no railroad terminals will likely sprout from its new building, nor will its work force likely operate anything noisier than a laser printer or a fax machine. Yet its operations will give a much-needed spark to the local economy just the same.
Sallie Mae’s payroll, its purchases of goods and services from local vendors, and its tax support will add to the local economic pie just as any other new employer would. And since its customer base is national, the new jobs the company creates here won’t come at the expense of payroll in other locally based companies. That makes its recruitment a solid win for the entire region, and those who helped bring this result about deserve our thanks and praise.
But the jobs themselves promise to be quite different. Those who anticipate working in an environment where tasks and hours are standardized, with flat rate compensation, and where raises and promotions accrue with seniority may be in for surprise. The white collar workplace more closely resembles what factory workers might call “piece work,” with pay and promotion very closely tied to performance, and where work continues until the job is done.
And the skills required to achieve those targets may also be new and unfamiliar to some. Communications and analytical skills will be absolutely vital. Can you write a set of detailed instructions that others can understand? Can you identify and prioritize tasks based on changing situations? Or even, can you get along with people and work as a team?
The expansion of Sallie Mae’s Indiana operations into Muncie is a much needed shot in the arm for a entire region that has been on a downward employment trajectory since the mid-1990’s. The 11-county region stretching from Marion down to Richmond, including Anderson, Muncie, and Connersville, has 14,700 fewer jobs today than existed in 1990. By contrast, over this same period the rest of Indiana has added 386,900 more payroll jobs.
And more troubling developments may lie ahead. Auto parts employment nationally is a third lower today than it was in 2000, and the Big Three’s shrinking share of the domestic motor vehicle market is not finished sending shock waves that threaten our region’s most prominent manufacturing employers.
That’s why it is so vital, and so timely, that we plant this flag in the less familiar land of the services economy that has become the driving force behind national economic growth. And if you are skeptical that services employment can support households, or even an economy, perhaps cashing a few paychecks will bring you around.