Harry Targ
As we listened to the
debate about the salience of the building of a semiconductor factory, SK
hynix, in our community for economic development reasons, I was reminded
of similar promises by leaders of both parties as to economic growth and the
stark realization that for years almost half of Hoosier families have been
living at or below a livable wage. The history of Indiana politics and
economics suggests that the "free market" currying of big investors
has not worked for most Hoosiers. It is time to listen to those who call for
investment in schools, healthcare, local businesses, and repairing our
environment. There are no quick fixes but the economic model preached in higher
education and government does not work.)
Purdue Today (March
25, 2025) posted an announcement of an upcoming conference to be co-sponsored
by its business and liberal arts colleges. While we should celebrate the
communications of all bodies of scholarship (aside from clearly the voices of
those who celebrate racism, sexism, and nativism), it is worthy, in this time
of reflection about higher education, to be clear about the differences between
ideology and empirical reality.
(Purdue
Conference Aims to Get at the Heart of Business and its Value - Purdue Business
One keynote speaker at
the conference indicated her expectations: “My hope is that everyone in
attendance will leave the conference with a better understanding of the
uniqueness of the American capitalistic system and a renewed commitment to
ensuring that the American ideals of freedom and capitalism are inherited by
the next generation,”
Attendees will hear
speakers from The National Review Institute, The National Constitution Center,
the Liberty Fund, and the Mercatus Center. “to have a deep discussion about
free markets and morality.” The Conference is advertised as the “Cornerstone for
Business.” Cornerstone refers to the much-touted transformation of what used to
be a vibrant program in Liberal Arts to a pastiche of courses that are alleged
to be interdisciplinary. This conference melds the business school with what is
left of liberal arts at Purdue University.
The announcement
indicates that there will be “an opening keynote from President Emeritus of
Purdue University Mitch Daniels and informed discussions of the connections
between business and AI; democracy and business; markets and human progress;
shareholders and stakeholders and more.”
While diversity of
perspectives on a university campus is commendable, one wonders if this
conference is not so much about scholarship and reflection as about the
promotion of a narrow economic ideology.
For example the essay
and data below indicates that majorities of working people in Indiana have not
been beneficiaries of the “market,” the “pursuit of profit,” and economic
concentration. In fact, as the United Way survey mentioned below suggests almost
40 percent of Hoosiers struggle to get by economically. It could be added that
there has been a systematic assault on workers, and their organizations, for at
least 20 years in the politics of the state.
On the Hoosier Economy
Hoosier politicians and corporate/university elites suggest
that the Indiana economy is booming and will only improve with less taxes, more
support for industrial projects like LEAP, and a general reliance on the
"free market." The United Way ALICE reports suggest that economic
circumstances of large percentages of
Hoosiers have worsened over the last decade.
For example, a recent United Way Alice Report suggests that
the number of households in Indiana living below a livable income have
increased since the last decade.
An Historical Review:
.Thursday, November 3,
2022
WORKERS SUFFER IN RED
STATE INDIANA
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, 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.
