Morton Marcus
The two Indiana candidates for Governor might hold up their hometowns (New Castle for McCormick and Jasper for Braun) as models for the concerns surfacing lately about small city survival.
In the 50 years from 1970 to 2020, New Castle has seen its population drop by 3,800 from a high of 21,200 . Jasper has nearly doubled from 8,600 to 16,700 in the same period. Seymour added 8,200 residents while Logansport has lost 3,300 and Vincennes declined by 4,100.
Both growth and decline are serious issues for places between 10,000 and 20,000 persons.
Instead of focusing on population, let’s talk about an economic dimension of counties where data are more readily available than places. Specifically consider the $77 billion in earnings that counties imported and exported in 2019.
Before Covid and expanded internet services, money, in form of wages and salaries, moved through commuting. A worker from Warren County went to Tippecanoe or Montgomery County for a job.
This in-flow of funds benefits Warren Co. while the place of work gains when the worker is also a customer at several establishments. Further, that worker is not burdening the work county with school children and the attendant costs of a residence.
But in the “new” world, as the commute gives way to the computer, where is the money earned when the employee is in Shelby Co. and the employer in Henry Co.?
On balance, in 2019, 20 Indiana counties were net exporters of salaries and wages, leaving 72 counties as net importers of earnings.
Spencer Co., in Southwestern Indiana, had an unusual situation. Residents of the county had 88% of their earnings originating outside the county while 82% of the earnings generated in the county left for other areas. If the people who live in a county don’t work there, and the people who work there don’t live there….is this a classic labor market mismatch?.
Brown County is more typical: 32% of the earnings generated in the county flow out while 77% of the earnings realized by local residents originate elsewhere. The net result of this strong inflow and comparatively low outflow is that two-thirds of the earnings enjoyed by county residents is dependent on jobs located elsewhere.
In addition to Brown, Ohio, Franklin, Morgan and Union counties were the most impacted by the inflow of earnings relative to the outflow.
The top five counties impacted by the net outflow of earnings were Martin (Crane), Marion, Gibson, Elkhart and Vanderburgh.
Do these figures show the labor market is inefficient? Should there be more matching of jobs and housing? Or is the market working just fine? People find employment where they can and live where they choose to, subject to their ability to earn.
What do you say? The future of our state may depend on your thoughts. Or, leave it to the political insiders as we have for decades?
Mr. Marcus is an economist. Follow him and John Guy on the Who Gets What? podcast available at mortonjohn.libsyn.com
