Hype And Reality–Hoosier Version

It’s one thing when progressives or liberals criticize a state’s governance; it’s considerably more interesting–and should be more persuasive–when that criticism comes from the same side of the political aisle as the party controlling that state.

Aaron Renn is a conservative. He recently authored a lengthy article in a publication called American Affairs Journal (a publication with which I am unfamiliar) analyzing Indiana’s performance under the much-hyped “pro-business” model favored by the GOP supermajorities that dominate the Hoosier State. His recitation is much, much kinder to former Governor Mitch Daniels and even to former culture warrior/pious hypocrite Mike Pence than I personally feel is warranted, and his bona fides as a conservative are indisputable.

So what about performance? What does Renn see when he looks to the evidence supporting the “business-friendliness” of Indiana? Let me share a few of his statistics/observatons:

When Indiana became a Republican trifecta state, its average disposable income had actually declined to 89.5 percent of the national level. By 2019 (pre-pandemic),2 it had fallen slightly to only 89.4 per­cent, and during the pandemic it dropped to 88.7 percent in 2020. In short, under Republican leadership the state’s relative incomes started out low and got even lower….

Measured since the pre–Great Recession employment peak in 2007, Indiana has only grown its job base by 5.8 percent, trailing the national average of 9.4 percent…

Under Republican leadership, Indiana’s disposable incomes have declined relative to the national average. 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…

Indiana ranks thirty-ninth in its share of jobs in new companies, the major source of job creation, and has more old firms than young ones..

.Indiana’s demographics are also weak. During the 2010s, the state’s population grew by only 4.7 percent versus a national average of 7.4 percent. Its population growth rate has been decelerating since 2000. During the 2010s, the state grew at less than half the rate it did during the 1990s, when under Democratic gubernatorial leadership. Most of this drop mirrored the national trend, but Indiana’s growth rate declined more rapidly than the nation’s as a whole. Large portions of the state are either stagnant or declining in population. Over half of the state’s counties—forty-nine out of ninety-two—lost population during the 2010s.

Renn points out that weak population growth means equally weak labor force growth, which also means “that the era of job growth in Indiana is nearing an end.” If such job growth requires an educated population, we’re also out of luck: he notes that the state “also lags in educational attainment, with only 26.9 percent of the state’s adults holding a college degree, forty-second in the nation.”

He also acknowledges what our legislature–dominated by rural interests–persistently refuses to admit: to the extent there is any good economic news, it is due to the performance of the state’s metropolitan areas–especially Indianapolis. Indianapolis has 31 percent of the state’s population, but was responsible for 74 percent of the state’s population growth over the past decade, including, importantly, a “disproportionate and growing” share of the state’s educated residents.

That means that the parts of the state outside Indianapolis’ metro area are actually performing even more poorly than those weak state-level averages indicate.

What should concern our legislative overlords is another worrisome fact:  Indianapolis’ growth has come largely from the rest of the state. Renn reports that some 90 percent of the city’s net in-migration comes from the rest of Indiana; that is very different from the growth of Sunbelt cities like Austin, Nashville, and Raleigh, which have a national draw. In effect, he says, Indianapolis has grown by drain­ing the rest of the state.

Summing up, Renn says:

In the end, Indiana built its sandbox, but not very many people or businesses want to play in it, and the ones who do don’t have much money. The state attracts few new residents on net, and the businesses that are locating there are predominantly low-wage employers taking advantage of the state’s lower-skilled, poorly paid workforce.

Republicans like to talk about running government like a business. If Indiana actually were a business, shareholders would replace the man­agement after such a poor showing.

But of course, Indiana is gerrymandered to give outsized power to its dwindling number of rural residents, who resent the state’s city-dwellers and dismiss all the evidence of economic mis-management.

They’ll keep voting for the pro-gun, anti-choice, anti-vaccine (and frequently anti-Black) culture warriors –and buying into the clearly dishonest hype about Indiana’s “pro-business” policies.

Honest to goodness, Indiana!!


  1. Yep, been writing about it for a decade now. The truth hurts. You got two choices when faced with the truth: change it or accept it.

    If it’s a negative truth, accepting it is a form of denial. It sucks but I’m okay with it.

    The fear of change plays a part. Change is scary. So, we lock in failure and play the victim.

    Indiana sold out a long time ago to interests that want to make a profit at the expense of the people and there were too many people willing to go along. Now we are bottom dwellers and scared to change.

    We still got two choices.

  2. Most studies on job growth document the fact that vibrant businesses invest in and locate in areas where people want to live. Education, infrastructure and the like. These “public goods” require public investments and therefore the taxes to pay for them. Indiana’s low tax mantra may attract some low wage industries but not those that improve the lives of Hoosiers.
    We also have a big disadvantage in the cost of our health care, driven by astonishingly high hospital prices. This acts as an additional tax, lowering wages and discouraging employers from offering health insurance coverage.
    Left unaddressed, the state’s prospects are not bright.

  3. Morton Marcus has been telling us this for decades, so it comes as no surprise to those paying attention. The solutions proposed by the author are mostly word salad proposing to change emphasis and redecorate the same old policies, so they look pretty.

  4. Hype and Reality…federal version! Two back-to-back AOL news items this morning!

    NBC: “Deliberate efforts” to undermine Covid response by Trump’s team.

    Reuters: Biden’s Covid-19 mandates reinstated by appeals court.

    With Indiana’s mediocre Covid response and probably the laxest gun laws in the country; Indiana’s conservatives maintain a deadly form of governing all who live here. They don’t yet understand that dead Hoosiers do not vote.

  5. I just read a fascinating historical account of Indiana by John Bartlow Smith, who was a nationally acclaimed free-lance journalist and not a historian. I won’t spoil it too much for your but he felt that Indiana’s decline from grace began in 1900. But here’s the thing: He published the book in 1947 and covered only the period from the end of the Civil War to the end of WWII. I found it fascinating and full of insight as to why Indiana is the way it is today…some things never change.

    Our fair land known as LaGrange County, named after the Summer home of the Marquis de LaFayette, boasted a 10-yr population growth of 7.89% between 2010-2020. All of this growth is attributable to the near majority Old Order Amish and Mennonite population as well as immigration of people of Mexican and Hispanic ancestry. The rest of the population is older and in decline. And median household income is $64,498, or 102.6% of the national median and a whopping 114.6% of the Indiana median.

    So, instead of worrying about our Indiana government taking us back to 1950, perhaps we should all embrace going back to 1840.


  6. When Pence spent $100,000+ for a new sign on the state office building, it reads “INDIANA A State that Works”, but he had plenty of room to finish the sentence because it should have read “INDIANA A State that Works it’s way to the bottom”.

    We continue to work our way to the bottom. State government is awash with cash, even with some of the lowest tax rates around. The surplus triggered a baked in automatic refund of $125 to everyone individual that files state taxes this year, so that is good to some extent, but I am sure there is somewhere that $525 million dollars could have been spent to have a bigger impact for the state as a whole, since it was taxes already paid and that nobody would miss. If nothing else money like that could have been allocated to local governments on per capita basis, but God forbid that money go directly to any the cites that might have Democrats running them.

    But true to form rather than figure out a way to spend the extra money, they are talking about a tax cut for businesses. This is just part of the failed trickle down economic theory. You would think all of these rural lawmakers would know from any farmer that owns livestock, there is only one thing that trickles downhill, and it is not prosperity.

    In addition, the state recently announced $500 million in regional grants. Indianapolis is clumped with two other counties, but the Indy Metro area is split into 3 different regions all getting paltry amounts of money. The region with Indianapolis got $20 million (4%) of the money but accounts for +25% of the states GDP.

    I think the official Indiana Republican motto is “let’s poop on the state’s economic engine in our race to the bottom”.

  7. How about using that $125 from the Republican state government to help out our struggling local government? One hundred and twenty five would buy a lot of dog and cat food for Animal Control AKA the Pound. Or gas station gift cards for a couple of IPS teachers, or as a lump sum gift to the city for the repairs to city streets. I’m sure others too might have some good ideas for how to help our own local government. The point is that if the state takes more out of Marion County/Indianapolis than it gives back, the people need to step up and take some positive action using our own money.

  8. Republicans talk a lot about self reliance but then make the rural parts of the state totally dependent on the higher taxes they take from Indianapolis. Rather than give people an extra refund they should raise teacher’s salaries and work on infrastructure. Or maybe they need to use the money to revitalize some rural communities who really need to redefine themselves and diversify their economic infrastructure. And part of that revitalization needs to be a way for those living in those communities to get education in trades or God forbid, a college education. They could use the money to create better public health infrastructure which would include raising the salaries of public health nurses.

    Indiana is proof of how a lack of education leads to poor policies in state government. The lack of education is like quicksand pulling us into a downward spiral in which we suffer a brain drain and the loss of young, talented, highly educated visionaries.

  9. Aaron Renn is a “conservative?” Maybe I haven’t had enough coffee yet. Maybe I’m mixing him up with someone else. Isn’t Renn the one who writes on local government issues all the time? I appreciate his well-written takes, but isn’t he usually advocating that government subsidize private development in cities?

    In Indianapolis, corporate welfare is openly embraced by both parties. Meanwhile, Indy residents pay the highest local taxes in the state. We are constantly giving more money to the Pacers and the Colts even though studies show they contribute little additional to the local economy. Whenever downtown property is ready for development, we throw money at politically-connected developers. EVERY TIME.

    In these public-private deals, we taxpayers (the public) take all the risk while the developers get all the profit. We’re about ready to empty out the City-County Building. What are we going to do with it? Of course, taxpayers will pay some developer to come in and build condos and then we will also give them a tax abatement for 10 years so they pay no property taxes. (Don’t get me started on these TIF districts which end up draining money from local services, including schools.), money that is redirected to private business. Corporate welfare is the Indy way.

    To me a “conservative” doesn’t believe government should be subsidizing private development, picking winners and losers in the free market.

  10. The numbers tell the story. Conservatives are liberals in sheeps’ clothing and the rich and corporate class are the sheep. The socialist super majority is elected by the ruralites to “fleece” the city slickers out of their tax money for redistribution among themselves. Gerrymandering is helpful in this exercise, as are word salad covers in re abortion, socialism and other such breathless projection claims of Democratic wrongdoing.

    What to do? Organize. Bring every Democrat to the polls. Result? We win.

  11. I was going to contribute but Paul said everything I was going to say for this post.
    Good grief.
    Carry on.

  12. That is sad. Under the Red State system, which was it, was it, Kansas, a few years ago, that would have had to declare bankruptcy, if a
    state were legally able to do so? Under Governor Brownback?
    The Red State system is, itself, bankrupt.

  13. Pick up where dave k left off-he called it correctly. Live in Ohio having similar but greater relative decline. AN addendum to hospital costs; ER in UC hospital (only top trauma hospital in Hamilton Cty) ask if I have insurance, ans, Yes. Intern had a surprised look as I looked/dressed like a bum. Asked him % of ER patients with insurance, answer, “10%” Someone has to pay for the various health matters covered by hospitals. It will only get worse demographically as schools will have 10% less students in 5 yrs-not a political opinion but actual prediction based on births in our states. While gerrymandering will insure the incumbents will have jobs until 2030, the smaller cities will continue to deteriorate while the small rural towns disappear.

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