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Thursday, September 23, 2021
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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 – Where are all these new people coming from? Throughout Indiana, folks are asking this question. Now we have answers covering the last half-decade (2015-19) from the American Community Survey. After gathering data from 17.7 million (15%) of 120.7 million households nationwide, the Census Bureau offers the following information: 1. Of the 6.6 million Hoosiers one year and older, during the years 2015 to 2019, 85% (5.6 million) were living in the same house as a year earlier. Of those who did move to a different house, one-third stayed in the same county. That means 91% of the people living in Indiana did not change counties in that five-year period. 2. With only 9% of resident Hoosiers (416,300) moving across county lines, where did they come from? Turns out 59% of them (244,400) were intrastate movers, already Hoosiers from other counties. Thus, only 171,900 new people were crossing our state borders. Of these,145,500 were from the remaining 49 states, the District of Columbia (DC) and Puerto Rico (PR). The final 26,400 were from abroad. 3. Alert, foreigners! What kind of foreigners are we talking about? These were people who lived the year before in a foreign county, with half of them in Asia. Nearly 4,000 lived in Europe, and 3,000 each in Africa or Central America. Some may have been Americans return home after a stint abroad.
  • INDIANAPOLIS – My phone buzzed. “Hello,” he said. “I’ll write your column this week.” “You call up and expect me to abandon my pulpit.” I objected. “You don’t know me?” he said. “I’m Donnie Daze, TV ethicist, guide to millions who seek a self-righteous path.” “A TV evangelist!” I laughed. “What dogma do you preach?” “TV Ethicist!” he insisted. “ I don’t preach. I teach from first principles about human nature.” “What first principles?” I asked. “Survival via self-interest,” Donnie answered. “the foundation of rational thought, the heart of social responsibility, the essence of the social contract.” I felt uncomfortable. 
  • INDIANAPOLIS –  The 2020 Census tells us Marion and Hamilton counties accounted for 40% of the state’s population growth of persons 18 years and older, with 37% of Indiana’s increase in occupied dwelling units from 2010. Meanwhile, over the last decade, Delaware and Grant counties led the state in both lost population 18+ and a decline in the number of occupied dwellings. Vacancy rates can be difficult to interpret. A housing unit may be vacant because it has been abandoned or is unsuitable for occupancy yet is still standing. It may be awaiting sale or rental. Or it may be a second home or a seasonal dwelling. In 2020, Indiana’s vacancy rates were lower in 83 of 92 counties. They ranged from less than 5% in the suburban Indianapolis metro area (Hancock, Hendricks, Hamilton and Johnson counties), to more than 20% in four counties.
  • INDIANAPOLIS – The Census Bureau’s Aug. 12 release of 2020 data gives us a small window into changes in the Hoosier housing market. While Indiana gained 301,700 (4.7%) in population from 2010, our stock of housing units grew by 127,600 (4.6%). But those numbers hide much of what was going on. To start, changes in the number of persons, as well as the composition of the population, have important implications for housing. From 2010 to 2020, the growth in Indiana’s population was composed of an increase of 317,000 (6.5%) persons 18 and older, with a decline of 15,300 (-1.0%) in the population under age 18. Fewer children reduces the number of bedrooms a family desires and allows an older population to spread out in existing homes. Nonetheless, many older persons seek smaller quarters, if they are able to downsize and give up excessive memorabilia.
  • INDIANAPOLIS – Freedom of the press goes beyond banning oppressive government interference with the media. It also means not allowing monopolistic private forces to overwhelm the independence of local media. Please note, the term media goes beyond the newspapers and flyers of the 18th Century that are no longer the sole means of providing description and interpretation of events. Gossip and word of mouth, wisdom of the ages and oral tradition have been with us forever. Media, however, connotes a more disciplined (professional, if you will) approach to the transmission of information. We do not require certification or licensing of media personnel as we do of doctors, lawyers, plumbers and barbers. Anyone can run a blog, send a distortion of reality in an email chain, or publish a book with disruptive concepts.
  • INDIANAPOLIS – In 2010, the General Assembly, inspired by Gov. Daniels, offered voters an amendment to the State Constitution that capped property taxes as a percent of gross assessed value. Hoosiers rose to the bait. Of the 1.56 million who voted, 72% approved the measure. They believed lower property taxes were a good idea. They didn’t think through the consequences of lower local property taxes and the shift of power they granted to the General Assembly. The property tax starts with a local assessment of value. If you think the assessment is wrong, you can discuss the matter with your county or township assessor. Or you can appeal the assessment though a local board and even arouse your neighbors to protest inappropriate assessments. If your property taxes are included with your mortgage, you might be totally ignorant of your property taxes; the mortgage company pays those taxes in May and November.
  • INDIANAPOLIS – This week, we break new ground. The conclusion of this column will precede the data supporting it. But don’t consider this a permanent feature. We’ll return to slugging through the data soon enough. Indiana workers, like their brothers and sisters nationwide, find their compensation declining as a share of GDP (the value all goods and services). The details may not make the nightly news on Fox or MSNBC, it might even escape attention on NPR, the fact is of long duration and widespread. The issue is a progressive transition of income from workers to business owners and managers. That may sound Marxist, but it is very much consistent with the most admired attributes of capitalism.
  • INDIANAPOLIS – As you probably heard, Indiana is looking for people. Not just any kind of people, but the right kind of people. Educated, skilled, mobile folks. We may not really know what they want, but maybe we could figure out how to find them. From what we believe to be true, educated and skilled people are highly mobile, moving to the growing places where there are opportunities. Remember, our efforts must be “data driven” to satisfy what the state is asking of regions seeking part of that tempting half-billion-dollar bucket This suggests we look where large numbers of people have been moving from other states. Sadly, we’ll have to wait for the 2020 Census in its full, great detail, state-by-state, even metro area-by-metro area. That’s two, maybe three, years away. But we do have the 2019 American Community Survey (ACS) which might be a good proxy for our purposes. Nationally, 7.4 million Americans moved from one state to another between 2018 and 2019. As you expected, Florida, Texas and California pulled in the most people, each over 480,000 persons. (Indiana attracted 151,400).
  • INDIANAPOLIS – Some people say Hoosier education is a failure. That’s probably false. Others report Hoosiers are poorly educated. That’s true, if we measure education by degrees earned or years of schooling completed. In 2019, before the COVID crisis, the U.S. Census Bureau estimated 33.1% of Americans 25 years and older in the United States had a bachelor’s degree and/or a professional or graduate degree. Indiana ranked 42nd among the 50 states at 26.9%. We were between New Mexico (27.7%) and Alabama (26.3%). Massachusetts (45%) led the nation; West Virginia (21.1%) trailed all states. With college degrees now frequently expected, younger adults are more likely to hold the necessary degrees than their older relatives. Nationally, 37% of persons 25 to 34 years old have such degrees. Only 31% of Hoosiers in that age range do. At the other end of the age scale, 29% of Americans 65 years and older hold bachelor and higher degrees, compared with 22% of senior Hoosiers.
  • INDIANAPOLIS – My homily last week may have disturbed some loyal Hoosiers. Here was a foreigner, one who did not attend an Indiana high school, challenging a $500 million program which openly admits all is not perfect in Indiana. READI (the Regional Economic Acceleration + Development Initiative)  is an open acknowledgement that most places throughout Indiana are not attractive to talented, skilled workers whether native or foreign born, as in Ohio or Michigan. Yes, an Indiana governor and his cantankerous legislative accomplices have endorsed a program designed to make our state a more desirable place to live. My chief objection to READI is that the IEDC (the Indiana Economic Development Corporation) made the essential decisions about a massive and important program without giving it sufficient thought. The project proposals being sought were to be based on geographic rather than substantive considerations.
  • INDIANAPOLIS – On May 3, Gov. Holcomb launched READI, the Regional Economic Acceleration and Development Initiative. It’s a $500 million program for Indiana regions to attract and retain talent (people) who value “quality of place and quality of life, innovation, and entrepreneurship.” That’s all very with-it, stylish, and in keeping with the thoughts of today’s thought leaders. But there can be no claim Indiana is thinking outside the box. The program was placed in the hands of the IEDC (the Indiana Economic Development Corporation). By the time of the launch, the expectations had been set, the course charted. First order of business: Multi-jurisdictional regions were to draw their boundaries by July 1. The regions needed to form teams of private and public entities which would develop lists of long-term (five to 10 years) initiatives to meet the objectives of attracting and retaining talent. Those projects would be funded by a match of four public or private dollars for every dollar of state money.
  • INDIANAPOLIS – In 2019, Indiana had 140,000 households headed by women without a spouse, living with their children under age 18, according to the Census Bureau. Some readers may see these women as victims of their own mistakes. Others will see them as heroines who have overcome the challenges life has provided. In both cases, the absent fathers are generally, if not universally, vilified. Our society terms men who do not and/or cannot provide financial support for these women, as “deadbeat dads.” Our legislatures and courts have been punitive toward such fathers. Most often they presume the veracity of claims against them. But changes are taking place in parenting. Expectations of men as parents have increased. As more and more women entered the labor market, fathers of intact families became more involved in raising their children. The roles of men and women converged. Still we have 140,000 Hoosier households where women are raising children on their own.
  • 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.
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