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!!
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