Harry Targ
Social and Economic Wellbeing Survey Shows No Progress
A
flurry of newspaper stories appeared the first week of February, 2017
in several Indiana newspapers reporting on data from a “health and
wellness” national survey about the performance of the 50 states. Indiana
according to several measures was ranked as the fourth “worst state” in the
country. The national survey consisted of data from 177,281 people interviewed
by the Gallup and Healthways organizations. Data included responses to
questions about feelings of community support and pride, physical health, and
financial security.
According to the survey The Times of Northwest
Indiana, (February 8, 2017) reported, “31.3 percent of Indiana
residents are obese, 30.6 smoke, and 29.4 percent don’t exercise at all.” Only
24.9 percent of the population had a bachelor’s degree (one of the lowest
percentages of any state). The NWIT article indicated that median
household income of Hoosiers was $5,000 less than the national median income. On
many measures Indiana’s rank was only ahead of Oklahoma, Kentucky, and West
Virginia.
Previous Data on the Indiana Economy
The centerpiece of Indiana public policy since 2004
has been corporate and individual tax cuts and reduced budgets for education,
health care, and other public services. Indiana was one of the first states to
begin the privatization of the public sector, including transferring educational
funds from public to charter schools. It established a voucher system to
encourage parents to send their children to private schools. Also, Indiana sold
public roads; privatized public services; and recruited controversial
corporations such as Duke Power to support research at the state’s flagship
research universities. Meanwhile the manufacturing base of the state shifted
from higher paying and unionized industrial labor (automobiles, steel, and
durable goods) to lower paying service jobs and non-union work such as at the
Amazon distribution center.
A positive narrative about Indiana economic growth
presented by the former Governor Mike Pence varied greatly from data gathered
between 2012 and 2014. For example, between 2013 and 2014, despite enticements
to business, Indiana grew at a 0.4 percent pace while the nation at large
experienced 2.2 percent growth.
Indiana’s economy historically was based on
manufacturing but has experienced declines since the 1980s (with only modest
increases in recent years). However, newer manufacturing between
2014 and 2016 was mostly in low-wage non-unionized
sectors. For example, the Indiana Institute for Working
Families reported on data from a study of work and poverty in Marion County,
which included the state’s largest city, Indianapolis. Four of five
of the largest growing industries in the county paid wages at or below family
sustainability ($798 per week for a family of three) and individual and
household wages declined significantly between 2008 and 2012 (Derek Thomas,
“Inequality in Indy - A Rising Problem With Ready Solutions,” August 13, 2014,
(www.iiwf.blogspot.com).
Further, Thomas quoted a U.S. Conference of Mayors’ report
on wages and income: “…wage inequality grew twice as rapidly in the
Indianapolis metro area as in the rest of the nation since the recession.” This
is so because new jobs created paid less on average than the jobs that were
lost since the recession started.
Thomas pointed out that the mayors’ report had several
concrete proposals that could address declining real wages and stimulate job
growth. These included “raising the minimum wage, strengthening the Earned
Income Tax Credit, public programs to retrain displaced workers,” and
developing universal pre-kindergarten and programs to rebuild the state’s
crumbling infrastructure. They may have added that declining real wages also
related to attacks on unions in both the private and public sectors and the
dramatic reduction in public sector employment.
Thomas recommended in 2012 that Indianapolis (and
Indiana) should have taken these data seriously because in Marion County
“poverty is still rising, the minimum wage is less than half of what it takes
for a single-mother with an infant to be economically self-sufficient; 47
percent of workers do not have access to a paid sick day from work, and a full
32 percent are at or below 150 percent of the federal poverty guidelines
($29,685 for a family of three).”
More recently, November 10, 2014, the Indiana
Association of United Ways issued a 250-page report on the state called the
“Study of Financial Hardship.” The study, parallel to similar studies in five
other states and prepared by a research team at Rutgers University, introduced
the concept of Asset Limited, Income Constrained, Employed or
(ALICE). ALICE refers to households with incomes that are above the poverty
rate but below “the basic cost of living.” The startling data revealed that:
-a third of Hoosier households cannot afford adequate
housing, food, health care, child care, and transportation.
-specifically, 14 percent of households are below the
poverty line and 23 percent above poverty but below the threshold out of ALICE,
or earning enough to provide for the basic cost of living.
-570,000 households are within the ALICE status and
353,000 below the poverty line.
-over 21 percent of households in every Indiana county
are above poverty but below the capacity to provide for basic sustenance.
Referring to those within the ALICE category of wage
earners who have struggled to survive but earn less than what it takes to meet
basic needs, Kathy Ertel, Board Chairperson of Indiana Association of United
Ways said: “ALICE is our child care worker, our retail clerk, the CAN who cares
for our grandparents, and our delivery driver” (Roger L. Frick, “Groundbreaking
Study Reveals 37% of Hoosier Households Struggle With the Basics,” Indiana
Association of United Ways, November 10, 2014, Roger.Frick@iauw.org).
The United Way published a revised ALICE survey in
2020 concluding that “In 2018, eight
years after the end of the Great Recession, 37% of Indiana’s 2,592,262
households still struggled to make ends meet. And while 13% of these households
were living below the Federal Poverty Level (FPL), another 24% — almost twice
as many — were ALICE households: Asset Limited, Income Constrained, Employed.
These households earned above the FPL, but not enough to afford basic household
necessities.” https://iuw.org/alice/
In 2022 Aaron
Renn wrote that “The Hoosier state has had a Republican governor since Mitch
Daniels was elected in 2004. It has been a Republican “trifecta” state, with
GOP majorities in both houses of the legislature, since 2011… its average
disposable income had actually declined to 89.5 percent of the national
level….When Daniels was elected, Indiana’s per capita disposable income was
only 90.5 percent of the U.S. average.” Aaron
Renn,“Indiana
under Republican Rule: ‘Pro-Business’ Policy Disappoints outside the Sunbelt” American
Affairs,Winter 2021 / Volume V, Number 4
But a recent Alec (the American Legislative Exchange Council, a Koch Foundation economically libertarian lobby group) co-sponsored study Rich States Poor States says the following: “Indiana is currently ranked 7th in the United States for its economic outlook. This is a forward-looking forecast based on the state’s standing (equal-weighted average) in 15 important state policy variables. Data reflect state and local rates and revenues and any effect of federal deductibility.” The Rich States, Poor States variables used to rank states included personal, property, and corporate tax rates, levels of workers compensation, whether the state was a so-called “right to work state’, minimum wage laws, and other pro-business measures. The more beneficial to business, the higher the ranking the state was given. https://www.richstatespoorstates.org/states/IN/
In contradiction to this ALEC sponsored report, David Ricks, CEO of Eli Lilly said that
“Indiana’s focus for so long, over so many years of Republican leadership, has
been to create a tax climate and a regulatory structure that is friendly enough
to business that companies can’t help but consider Indiana for major projects.”
He referred to national data indicating that the cost of living and business
climate in Indiana were strong but, in his words, “Our education attainment in
the state is not good. The ability to reskill the workforce, I think, could
improve. Health, life and inclusion, overall, I think, conditions rank poorly
nationally in our state. And also workforce preparedness, also related to
reskilling, is a liability for us.” https://www.wishtv.com/news/indiana-news/lilly-ceo-takes-critical-stance-against-indiana-economy/
In other words, Indiana’s economy, particularly in the
years of Republican one-party rule is one of prioritized tax cuts,
deregulation, privatization, and business incentives at the expense of
education, health care, wages, worker rights, and public institutions, And
this is the contradiction: Indiana being “currently ranked 7th in the United
States for its economic outlook” versus the dramatic ALICE estimate that 37
percent of Indiana households live below a livable wage. As Renn summarizes
it: “since 2000, the state ranks a dismal forty-sixth in median wage growth,
and the growth in median earnings has been at only half the rate of the rest of
the country. Only 42 percent of workers in the state earn a living wage
(adjusted for cost of living) and have employer-provided health insurance.”
Assessing these recent studies and the 2017 report
cited at the outset leads to the conclusion that an evaluation of the current
state of the Indiana economy depends upon where one is located in terms of
economic, political, or professional position. Those Indiana men, women, and
children who come from the 37 percent of households who earn less, at, or
slightly above the poverty line probably have a negative view of their futures.
For them, the tax breaks for the rich and the austerity policies for the poor
are not positive.
Indiana Politics
Perhaps the starkest fact to note in reference to the
growing economic insecurity in the state of Indiana over time is that in 1970
forty percent of Hoosier workers were in unions, then the state with the third
highest union density. By the dawn of the second decade of the twenty-first
century only 11 percent of workers were in trade unions. Recent legislation has
disadvantaged Hoosier workers including passage of a Right to Work law and
repeal of the state version of prevailing wage. The Mitch Daniels/Mike Pence
administrations (2004-2016) have used charter schools and vouchers to weaken teachers’
unions. In addition, in his first day in office in January, 2004, newly elected
Governor Mitch Daniels signed an executive order abolishing the right of state
employees to form unions.
In 2005 the Indiana state government (legislature and governor) passed the first and most extreme voter identification law. Voters were required to secure voter identification photos. Michael Macdonald a University of Florida political scientist estimated that requiring voter IDs reduces voter participation by 4-5 percent, hitting the poor and elderly the hardest. In addition, Indiana law ended voter registration in the state one month before election day. And polls close at 6 p.m. election day, among the earliest closing times in the country. Finally, requests for absentee ballots require written excuses.
Republican control of the executive and both
legislative branches led to redistricting which further empowered Republicans
and weakened not only Democrats but the young and old and the African American
community. Nine solidly Republican congressional districts were drawn in
2000. In 2014, of 125 state legislative seats up for election, 69
were uncontested. 2014 Indiana voter turnout was 28 percent, the
lowest state turnout in the country. The Governor’s office has been held by
Republicans since 2004 and Republicans have had majorities in both legislative
bodies since 2010, when statewide redistricting was implemented.
Traditionally when Democrats were in the Governor’s
mansion and/or controlled a branch of the legislature, they too tended to
support neoliberal economic policies, but less draconian, and had been more
moderate on social policy questions. In recent years, many legislators and the
two most recent governors have been friends of or received support from the
American Legislative Exchange Council (or ALEC) funded by major corporations
and the Koch brothers.
With ALEC money, some active Tea Party organizations,
the growth of rightwing Republican power, and centrist Democrats, Indiana
government has been able to initiate some of the most regressive policies in
reference to voting rights, education, taxing, and deregulation in the country.
And as the data above suggests, the political economy of Indiana has increased
the suffering of the vast majority of working families in the state. Other data
suggests that the quality of health care, education, the environment, and
transportation have declined as well.
The political picture is made more complicated by the
fact that Indiana is really “three states.” The Northwest corridor, including
Gary and Hammond, are cities which have experienced extreme
deindustrialization, white flight, and vastly increased poverty. Political
activists from the area look to greater Chicago for their political inspiration
and organizational involvement. Democratic parties are strong in these areas
but voter participation is very low.
Central Indiana includes a broad swath of territory
with small cities and towns and the largest city in the state, Indianapolis.
Much of the area is Republican, many counties have significant numbers of
families in poverty, and some smaller cities have pockets of relative wealth.
Democrats hold some city offices but the area is predominantly Republican.
The southern part of the state, south of Indianapolis,
in terms of income, political culture, and history resembles its southern
neighbor Kentucky, more than the northern parts of the state. The state of
Indiana was the northern home of the twentieth century version of the Ku Klux
Klan. In the 1920s, the KKK controlled Indiana state government. That reality,
the institutionalized presence of overt racism, remains an aspect of Hoosier
history that may still affect state politics.
In sum, the working people of Indiana enter the coming
period with little economic hope, a politics of red state dominance. And as
Renn puts it: “Republican leadership, exemplified by Mitch Daniels, has chosen
to prioritize the preferences of businesses, or at least a subset of them, over
those of its citizens. The sentiment is captured in the state’s slogan, 'a
state that works,' which is emblazoned along with a sprocket logo on the side
of the state office building in downtown Indianapolis. In practice, Indiana has
pandered to low-wage employers, and sided with businesses over citizens in many
policy disputes."
Social change in Indiana, as with the nation at large, will require a vibrant, active progressive movement in Indiana. It is clear that in the 2022 elections and beyond, Hoosier’s, the vast majority workers, must vote to end single-party red state politics, at the same time that mass movements direct their attention to improving the lives of the 99 percent.
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