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Thursday, December 5, 2019 2:55 PM

How’s business? “Wonderful,” is the answer you’ll probably get from those who only know the stock market continues to rise. 

How is business in Indiana or in your sector of the economy? That answer is often hard to find. 

  • INDIANAPOLIS – Here are the facts about Hoosier earnings, with comparisons to the nation, in the years of 1999 and 2019. These years were chosen to bracket two decades dominated by the internet and telecommunications revolution, while avoiding the Covid year of 2020. The data are from the U.S. Bureau of Economic Analysis. No adjustment for price changes were made because those changes themselves incorporate information about changes in demand and conditions of supply. Interpretations are left to the readers who object regularly to those supplied by the author. Some observations are in order, however. First, of 87 industries with complete data for both years, the U.S. had 81 (93%) with higher total earnings in 2019 than in 1999; Indiana had 75 (86%). Growing earnings will be observed if more workers are employed, and/or workers are employed at higher wages, and/or workers are putting in more hours than previously.
  • INDIANAPOLIS – The minimum wage discussion is remarkably complex. The Biden administration has proposed a gradual increase from the current federal minimum of $7.25 to $15 an hour. The word gradual has been ignored by critics who would have us believe that a radical, sudden move is being made to $15. A few facts: Nationally, there were only 392,000 persons in 2019 earning the $7.25 minimum. That was a tiny 0.47% of the 82.3 million wage and salary workers. The minimum wage is the lowest rung on the wage ladder. The lowest 10% of private sector workers earned $10.06/hr or less in 2019. The median private sector worker earned $17.64/hr and the top 10% were up at $46.64 or more. The minimum wage is $7.25 in 21 of our 50 states. Indiana and Kentucky are included, but not neighboring Ohio ($8.80), Michigan ($9.65) nor Illinois ($11.00). Washington State ($13.69) has the top minimum wage. In all, 29 states exceed the federal minimum.
  • INDIANAPOLIS –  When new population data concerning Indiana become available, the cry goes out in the Statehouse, “Better call B&P!” Bluff & Puff is the public relations department for the State. Their latest triumph was to note that Indiana’s population growth rate from 2010 to 2020 was greater than that of any of our four neighboring states. B&P would have us think this superiority over our neighbors is something new, something worth a trophy. Yet, for the past three decades (1990 to 2020), Indiana’s growth rate has exceeded that of our four neighboring states. B&P didn’t say Indiana’s 4.7% increase in population was well below the nation’s 7.4% growth rate. In addition, they were silent about the 2019 data which foreshadows the 2020 results to be released later this year.
  • INDIANAPOLIS – Gross assessed value may be the best indicator of economic progress for a neighborhood, city, county, or state. We don’t have good numbers on the market value of real estate. Sales disclosure forms may not do the trick, if they are not audited. The gross valuations of county assessors can be challenged by property owners. No one challenges when the assessments are too low. So these gross assessments are a minimal statement of value. The GAV of the property we own is listed with our property tax bills. It changes as the market value of homes in our neighborhoods change, if there are a minimal number of home sales in the neighborhood. Assessors follow a manual from the Indiana Department of Local Government Finance (DLGF), so there should be statewide uniformity.
  • INDIANAPOLIS – When did it all start? Who can say? Not I. My earliest recollection was of a sugary breakfast cereal for children advertising the radio broadcasts of the Brooklyn Dodgers. Up to that time, Gem razors and Shaefer beer, along with Abe Stark’s clothing store, were acceptable commercial elements in my life. This past weekend, as I watched both the Chicago Cubs and the Cincinnati Reds emerge victorious from conflict, I could not escape intrusive advertising. At one time, commercials were reserved for periods between innings. Then, following the fashion of professional football, commercials were inserted when play stopped for other reasons. Now commercials are dribbled into baseball broadcasts and present in most shots on TV. It might be a Nike swoop silent on a uniform. Ads appear on the backdrop behind the batters as they await the next pitch. At the home of the Reds, there is now a changing ad superimposed on the edge of the pitching mound.
  • INDIANAPOLIS – Round two of COVID relief funds have been allocated and billions have been sent out already. Did you get $1,400 for each person in your household? Unless you had less than $80,000 in income ($160,000 for a couple), you didn’t see those checks. “I don’t need that money,” says a friend in Elkhart over our statewide Zoom connection. He’s right. But what harm is that money doing? If he doesn’t spend it or give it away, the money won’t just sit in his bank. The bank will lend to people, businesses, or state and local governments to spend according to their opportunities and needs.“Won’t the U.S. have to raise taxes to pay off this new debt?” demands a college student in New Albany. “We’re going to have to pay it back, with interest, some day. It’s putting a future burden on my back.” Pay it back to whom, when? From whom was this money borrowed? No foreign country or domestic investor lent this money to the US Treasury.
  • INDIANAPOLIS – Last week, the U.S. Bureau of Economic Analysis gave us a first look at the three closing months of 2020. Indiana did well in the final quarter of 2020. Our Gross Domestic Product, after adjustment for inflation, (Real GDP) advanced at an annual rate of 5.1% compared with a 4.3% increase for the nation. A bit of chest thumping should be heard about now from state officials, although they probably can take but little credit for our economy. Perhaps it would be more accurate to say that, despite our lachrymose Legislature, Indiana’s private sector managed to respond well to the federal stimulus program and sustained the momentum of recovery from the COVID shock of earlier in the year. The year 2020 was composed of two very different halves. As usual, Indiana rode a more exciting rollercoaster than did the nation. The first and second quarters felt the full force of the pandemic. During those first six months, Indiana’s Real GDP declined at an annual rate of 20.3% with the nation going down by 19.2%.
  • INDIANAPOLIS – U.S. Senator Lamar Alexander (R-TN) has retired after 18 years of service. On leaving the Senate, he said, “Lately, the Senate has been like joining the Grand Ole Opry and not being allowed to sing.” His record in the Senate, and previously as governor of Tennessee (1979-87), was informed by walking 1,022 miles across the state in his 1978 campaign for governor. He saw that poverty was related to dreadful road conditions. If getting somewhere is a chore and getting services and visitors to your town is difficult, poverty is reinforced by the highways. He proposed linking each of the state’s 95 county seats by four-lane highways to the nearest Interstate. It’s a thought that ought to be considered by Indiana’s moribund legislature. It took generations to get U.S. 31 from Indianapolis to South Bend upgraded to four lanes and only recently has partial, additional modernization been completed.
  • INDIANAPOLIS – The Indiana General Assembly, which gets its share of bruises, is getting close to doing something very beneficial for some very sick children, their parents and their siblings. Hoosiers are fortunate to have the Riley Hospital for Children located in Indianapolis. It is nationally ranked in 10 children specialties. However, it is in Indianapolis. That’s not a bad thing, except if you are poor and live in a corner of the state. Imagine your family on Medicaid. Not Medicare, which is primarily for the older population, but Medicaid, the stepchild of health care in the United States. The federal and state governments share Medicaid costs with the states anteing up 34% of the fees paid to health care providers.
           
  • INDIANAPOLIS – Poverty is a human issue with many dimensions including race, gender, occupation, and geography. Its elimination is also multi-dimensional. When not battling with minority members, the dominate Republicans in the Indiana House of Representatives might attend to the plight of 868,000 Hoosiers (13.4%) below the poverty threshold. In the event it did not strike you, 868,000 persons in 2019 was about the same as the population of 43 Indiana counties combined. Before we go further, consider those poverty thresholds which include numerous benefits such as Medicare, Medicaid, SNAP, Social Security, pensions, etc. For a single person under age 65, the threshold is income of $13,064. A college student, working half-time at $12.56/hr., fits that description. Thus, Monroe and Delaware counties, with their relatively large college populations, lead the state with poverty rates in excess of 20%. Vigo and Tippecanoe are similarly college-impacted counties with large numbers of young, part-time workers.
  • INDIANAPOLIS – “I abhor the idea, but it must be given an airing,” she said. She in this case was the very proper Representative Roberta Righteous speaking to a small gathering of constituents via Zoom. “It’s nothing I could endorse, but my colleagues in the Indiana General Assembly entertain many more outrageous and vile ideas in each session,” she continued. “In Indiana, we maintain an image of wholesomeness, despite little supporting evidence. It’s time to drop that veil and present ourselves for who we are.” None of the Zoomers interjected a comment and Rep. Righteous went on. “Speaking plainly, Indiana needs to take some risk in economic development. Our state is rotting out while the core is absorbing the wealth, the prestige, and the power of a surging economy and an expanding population.
  • INDIANAPOLIS – “It’s cold out here,” Sorethroat complains. “Why are we under the east stairs of the Capitol building?” “Because I can’t go into the Statehouse as casually as I’d like since the legislative gators started their security checks,” I tell him. “Well, what do you want to talk about? Be quick!” he shivers with the cold. “We have several good folks from both parties in the General Assembly, yet when one senator proposes a cockeyed bill preventing Indianapolis and other cities from ever changing their names, the Senate approves it 36 to 11. Why?” I ask. “Oh, that’s just Jack. Grandstanding. He’s stirring up some bluster about Native Americans objecting to derogatory names beyond sports teams,” Sorethroat says, taking another drag on his mini-cigar.
  • INDIANAPOLIS – For a decade now, ever since the Great Recession, we’ve heard how Indiana is a great place to do business. It’s a story that workers hear and that legislators hear. And it might be true, if you are a business. But is it true, if you are a worker? Well, let me tell you why it is and is not true. Between 2010, when the economy was just coming out of the Great Recession, and 2019, when the economy was about to experience the Great Pandemic of 2020, earnings per job in Indiana grew faster than in the United States as a whole. That’s right, if you take the earnings of those on wages and salaries, plus net income of proprietors (farm and non-farm) and then divide that number by the number of jobs, the result is average earnings per job. For the U.S., those earnings per job grew by a 23.0% while Hoosiers racked up a gain of 23.7%.
  • INDIANAPOLIS – “This legacy is at risk” wrote Campbell MacDonald, principal clarinetist of the Fort Wayne Philharmonic and chair of the Philharmonic Players’ Association, last week in the Journal Gazette. That legacy of the 77-year-old orchestra is now endangered by COVID and the resulting dispute between management and its 65 musicians. We all know many restaurants have closed. In some cases it is like losing a valued friend. How do those closings compare with the loss of a symphony orchestra? Many community leaders are now realizing Indiana’s chief economic problem is a scarcity of cultural assets; Indiana’s 26 orchestras are among our vital community assets. They might be impossible to rebuild once gone. Assembling even a decent orchestra, let alone one of established character, is a virtuoso task.
  • INDIANAPOLIS – The “normal” economy of 2019 is our launching pad for the post-pandemic world. We’ll be able to measure changes with the U.S. Bureau of Labor Statistics (BLS) data on wages for 725 occupations in each of the 50 states.In 2019, the average (mean) annual wage in Indiana, for all occupations, was $46,770. The median wage was $36,960, which tells us half of Indiana’s  workers made less than half more than that amount. In 2019, our average wage was 27% ($9,810) higher than the state’s $36,960 median wage. The average wage is almost always higher than the median wage. A few high paid executives and managers can boost the average wage way over the median. Many companies boast of their average wages giving the impression they pay their workers well. Indiana’s average wage in 2019 was 9.7% ($5,004) below the average for all states; our median wage was 8.2% ($3,320) below the median for all states.
  • INDIANAPOLIS – The COVID-19 pandemic inflicted sustained pain and hardship on too many for too long. The effect on our economy, however, is mixed. The shock to the economy occurred in March and April of 2020. In the United States, 24.7 million persons lost their jobs. Of these, 16.3 million (66%) were added to the numbers unemployed and 8.4 million left the labor force. During this recovery, through November 2020, 16.9 million persons have found new jobs or returned to previous positions. The number unemployed declined by 12.2 million and 4.6 million have come back into the labor force. (Don’t fret about the rounding problem with the numbers.) This partial recovery leaves us 7.8 million shy of the February employment numbers, distributed as 4.0 million unemployed and 3.8 million out of the labor force.
  • INDIANAPOLIS – Yes, this is the third column on townships. Be patient; the end to this series is in sight. Originally, townships were to be perfect squares of six miles in each direction, or 36 square miles. They were to maintain public roads, provide public education, provide relief for the poor, and help maintain public safety. Today, the average Indiana township has 35.5 square miles of land area. That fact would make the surveyors who laid out our townships pretty happy. However, Union Twp. in Montgomery County. is the largest at 111.6 square miles, while Albion Twp. in Noble County has but 3.8 square miles. Why? Because the Indiana legislature in the 19th century was inclined to go along with what local folks wanted. In the 1800s, many elected officials didn’t care whether counties and townships fit what some Easterners thought would be best back in 1787. Ask your neighbors or your representatives in today’s General Assembly, “What do townships do?” They may tell you those governmental units provide poor relief. This is almost perfectly true.
  • INDIANAPOLIS – If you missed last week’s column, it was an introduction to Indiana townships. That topic is continued this week and will appear several more times before the year ends. “Why?” is a very good question. For years, decades in fact, thoughtful people as well as ignorant people, have said, “It’s time to get rid of townships.” I feel it is reasonable for us to know something more about the subject before we consider any action. Hence, it’s time you knew the 35,826 square miles of land in our Hoosier state are divided, not only into 92 counties, but also into 1005 townships, four cities and towns which have replaced townships in Boone and Delaware counties, and one small military training facility (Camp Atterbury in Bartholomew County). We will refer to all 1010 units as townships for our purposes. LaPorte County in Northwest Indiana hosts 21 townships followed by Allen County with 20 and Jasper County with 17. These three counties are also the state’s three largest counties in land area. It makes sense since each county and its townships were set out according to plan based on the Northwest Ordinance of 1787.
  • INDIANAPOLIS – Readers have petitioned for columns that ignore our dysfunctional politics, disrupted economy, and medical calamity. I am compelled to comply. What could be more neutral, more emotionally void, and more sleep-inducing than a focus on Indiana’s townships? In truth, I must alert you to the fact we have lost three townships since the 2010 Census. Their departure was not widely broadcast beyond the borders of their two counties, Boone and Delaware. No sympathy cards are expected. In Boone County, as you might have heard, has seen considerable growth. Whitestown and Zionsville engaged in very suburban competition for present and future tax base. This is what passes for foresight in suburbs. In the process Eagle and Union Townships were absorbed.
  • INDIANAPOLIS – President-elect Biden has selected his COVID-19 Task Force. It is peopled by medical, scientific and health practitioners and administrators. Unencumbered by disbelief and gross incompetence, they can provide the best approach at this stage of the pandemic. In the parlance of sports, this task force will devise a game plan. But, as they and we know, a game plan requires execution and adaptability to both anticipated as well as unanticipated conditions. From my standpoint, a second task force is needed. It is not sufficient to know what needs to be done. How do we get compliance with what needs to be done? We have been told to wear face masks that cover our mouths and noses. This is a primary means of protecting ourselves and others from the virus. Many businesses post signs saying, “Masks are required to enter here.” To what extent is that requirement enforced? We have all sorts of useful data on the pandemic, but I’ve not seen compliance data.
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  • Mayor McDermott eyes challenge to Sen. Young
    "To me, when we are attacked, our nation's capital is attacked — it was — and the Republican Party is refusing to even open an investigation into it, it's a disgrace. It's about loyalty to our country, and I think that's missing right now in America. I'm troubled by where we are in America. I think that people like Todd Young should have been pulling people together and trying to work across the aisle, and I don't really see that. And Sen. Young knows better. He knows what the right thing to do about the Jan. 6 insurrection is. He knows what the right thing to do is, he knows what the political thing to do is, and he chose political. And it's not a patriotic vote." - Hammond Mayor Thomas McDermott Jr., on his "Left of Center" podcast saying he is considering a challenge to U.S. Sen. Todd Young in 2022 McDermott is a five-term mayor and also a former Lake County Democratic chairman. He lost a 1st CD primary race to U.S. Rep. Frank Mrvan in 2020.
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