Harry Targ
Indiana
Economic Life
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 has been
a trend-setter for the nation as to privatization of the public sector:
including transferring educational funds from public to charter schools;
establishing a voucher system to encourage parents to send their children to
private schools; selling off public roads; privatizing public services; and
recruiting controversial corporations such as Duke Power to support research at
the state’s flagship research universities. The manufacturing base of the state
has shifted from higher paying, and unionized, industrial labor (automobiles,
steel, and durable goods) to lower paying non-union assembly work such as at
the Amazon distribution center.
The positive narrative about Indiana
economic growth presented by the current Governor Mike Pence varies greatly
from recently published data. For example, between 2013 and 2014, despite enticements
to business, Indiana grew at a 0.4 pace while the nation at large experienced
2.2 percent growth. Indiana’s economy historically has been based on
manufacturing and has experienced declines since the 1980s and then some
increases in recent years touted by the Governor. However, the newer
manufacturing is 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 includes the state’s largest city, Indianapolis. Four of five of the largest growing
industries in the county pay 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,” universal pre-kindergarten, and programs to rebuild the
state’s crumbling infrastructure. They may have added that declining real wages
also relates to attacks on unions in both the private and public sectors and
the dramatic reduction in public sector employment.
Thomas added that Indianapolis (and
Indiana) should take 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, refers to 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.
-more precisely 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 struggle 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).
Assessing 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. Today only 11 percent of workers are in trade
unions. The most recent legislative defeats Indiana workers have suffered
include passage of a Right to Work law and repeal of the state version of
prevailing wage. The Daniels/Pence administrations have used charter schools
and vouchers to destroy teachers unions. In addition, in his first day in
office in January, 2004, newly elected Governor Mitch Daniels signed an
executive order disallowing state employees the right to form unions on their
behalf.
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 ends voter registration in the state one
month before election day (the polar opposite of same day registration). 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. As to the state legislature, by
2014 of 125 state legislative seats up for election, 69 were uncontested. Most shockingly,
2014 Indiana voter turnout was 28 percent, the lowest state turnout in the
country. Indiana government has been controlled by Republicans (the
governorship since 2004, and both legislative branches since 2010).
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 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 increasing poverty. The
politically active 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, must be remembered as
an aspect of Hoosier history that may still affect state politics.
Part
3 will address resistance and the development of social movement responses to
the changing national and state political economy.
