OPINION: Indiana seen through clear lenses

Morton J. Marcus is an economist formerly with the Kelley School of Business at Indiana University. His column appears in Indiana newspapers.

Again the phone call from the Weekly Swine and Whine featured a voice I could not identify by gender. “Didn’t you call here in mid-October?” I asked.
“No,” was the answer. “I just got this job last week, but my editor said I should talk to you to find out how Indiana’s economy is doing.”

“Here we go again,” I said to myself. “Wonderful,” I said to him/her. “Let’s start with Real Gross Domestic Product (GDP).”

“OK,” s/he said. “What’s that?”

“It’s 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,” I answered. “The United States’ Real GDP has grown by about 13 percent in the last decade, while Indiana has added only 7 percent.”

“You mean Indiana’s economy is not keeping up with the nation?” s/he blurted. “Haven’t we been outperforming the nation lately?

“No,” I said flatly. “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 32^nd with 2.8 percent compared with 5.8 percent for the U.S.”

“Can I write that?” s/he asked.

“Yes, you can, if your editor allows you to do so,” I said. “Some editors use only state press releases but not data mined by private researchers from reliable federal sources.

“From the second quarter of 2014 to the same time this year,” I continued, “Indiana and Michigan just about tied for 37^th place in growth of Real GDP, ahead of Wisconsin, but behind Illinois, Ohio and Kentucky.”

“But we’re busting all records with our job growth?” S/he turned a declarative sentence into a question.

“Jobs are good,” I said. “Pay is even better. 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.

“In a few sectors,” I went on, “Indiana did better than the nation. 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, Indiana was down eight percent at the same time the country slipped six percent.”

“Yet,” I told her/him, “if you get none of what I said, remember this:  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?”

“That’s a story?” s/he said.  I hung up the phone.