Theme: Low business costs states don’t win
Now that state policy makers have stated that Indiana is the model for what they want Michigan’s economy to be like we need to learn what is in store for Michiganders if that vision is realized. As you will see below in the economic outcomes that matter to Michiganders––do you have a job and how much do you earn––being like Indiana means being near the bottom in nearly every metric.
Lets start with the statistic that is the most used measure of economic well being, the monthly unemployment rate. Indiana in December 2012 ranks 37th with an unemployment rate of 8.2%. To us a far better measure of employment––whether a resident of a state is working or not––is the employment rate. The proportion of residents 16 or older who have a job. The employment rate in Indiana in 2011 was 57.5%, 35th in the country.
Across the board Indiana is a low prosperity state:
- Per capita income (the best and broadest metric of economic well being): 41st
- Private sector employment earnings per capita: 33rd. (Excluding natural resources industries: 30th.)
- Average wage: 36th
- Proportion of households with incomes 1.5 times the poverty rate or lower (a good measure of low income residents): 31st worst (ranking inverted)
- Proportion of households with income four times the poverty rate or higher (a good measure of middle class or better): 38th
The two defining characteristics of high prosperity states is they are over concentrated in the high education attainment sectors of the economy and the proportion of adults with a four year degree or more. Indiana is near the bottom on these metrics as well:
- Proportion of adults with a four year degree or more: 44th
- Proportion of wages from high education attainment industries: 49th
- Proportion of jobs from high education attainment industries: 49th
Seems like a reasonable question to ask our policy makers is “why do we want to be like Indiana?”