Central Indiana communities are seeing most of the population growth, and one reason perhaps, is smaller counties’ reliance on outdated economic growth measures geared toward luring jobs rather than luring people, according to Michael Hicks, director of the Center for Business and Economic Research at Ball State University.
This outdated model, Hicks said, focuses mainly on drawing “footloose” jobs, or jobs that can be based anywhere because their products ship outside their own community. This primarily includes the manufacturing industry, which has been reduced by 300,000 jobs since 1980 in Indiana.
“We’re chasing something that does not exist,” Hicks told members of the Marion Rotary Club Tuesday afternoon.
Grant, Delaware and similar counties continue this 20th century economic development policy, Hicks said, by providing financial incentives for manufacturing companies and corporate headquarters through the use of tax abatements and Tax Increment Financing (TIF).
The 21st century economic development policy, Hicks described, focuses on talent attraction and retention efforts, assuming jobs follow people, but that’s no longer the case.
While a significant number of people reported moving to a community for job-related purposes in the 1970s, that number has been largely insignificant since about 2000.
“The movement of jobs to people has now replaced the movement of people to jobs,” Hicks said. “People still move to places to get jobs, but it’s such a statistically small proportion of relocations today that it’s not detectable in the data.”
The state of Indiana has created almost 1.6 million jobs since 1970, nearly all of which are “non-footloose” jobs. Non-footloose jobs are population based and include jobs, such as police officers, teachers and grocery store and restaurant workers.
Once a large employer in the past, manufacturing companies continue to replace human workers with machine technology, Hicks said, and that effect is showcased in the fact that, despite dropping thousands of positions in the past several decades, manufacturing in Indiana saw a record year in production in 2015.
Schools and public services are now the number one relocation decision for households today, Hicks said.
He said though it may be “uncomfortable” for a community to hear that economic growth efforts from the past 20-40 years aren’t working anymore, the good news is state officials are beginning to understand this change.
The state’s Regional Cities Initiative, Stellar Communities grants and the Community Readiness Initiative are all efforts to help local communities improve their quality of life, all of which have been created within the last decade or two.
“My concern is that we’ve passed on a lot of quality of life initiatives,” said Rotary Club member Paul Kuczora, also president and CEO of Grant-Blackford Mental Health in Marion. “We weren’t selected for some others.”
The City of Marion did not participate in the Stellar Designation Program this year after five years of participating and never winning.
Another issue facing quality of life initiatives, Hicks said, is how a local government decides to spend its tax dollars.
Data shows that business attraction efforts are the second biggest receivers of taxpayer dollars, following schools, in Indiana. This means Indiana is spending more money on luring footloose jobs than on public safety at the local level.
The downfall of this way of spending is clear, Hicks said, citing Greensburg, Indiana, which “won” the 20th century economic development policy by attracting a Honda plant but failed in areas of school performance and local housing.
A stronger benefit for a community would be to have schools that are outperforming the state median, Hicks said.
Rotary Club member Doug Roorbach, also editor and publisher of The News Herald, said he has noticed local schools improving.
“I think our schools in the county are performing very well now, especially compared to where they were five years ago, and they have the data to back that up,” Roorbach said.
He said community members need to recognize this and support the local school systems. He also encouraged people engage in community clean-up efforts and other initiatives to improve the city’s appearance.
Meanwhile, Roorbach said the city needs to continue its efforts on infrastructure improvement, such as roadwork, and blight elimination. He said presentations like Hicks’s continue to help residents learn about the issues Grant County face in economic development.
“I think we’re starting to get the picture,” Roorbach said.