THE POLITICAL ECONOMY OF INDIANA 2017
Social and Economic Wellbeing Survey Shows No Progress
A flurry of newspaper stories appeared the first week of February in The Wall Street Journal and 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 has 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.
As The Wall Street Journal put it: “Indiana is one of just a handful of states to rank worse in every category of well-being--sense of purpose, social life, financial health, community pride, and physical fitness--than most other states…” On all these measures combined 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.
The 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 has been 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 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, (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,” and developing 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 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).
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. By the dawn of the second decade of the twenty-first century only 11 percent of workers were in trade unions. Recent legislation has disadvantaged Hoosier workers including passage of a Right to Work law and repeal of the state version of prevailing wage. The Mitch Daniels/Mike Pence administrations (2004-2016) have used charter schools and vouchers to weaken teachers unions. In addition, in his first day in office in January, 2004, newly elected Governor Mitch Daniels signed an executive order abolishing the right of state employees to form unions.
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 ended voter registration in the state one month before election day. 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.
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 major corporations and 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.
In sum, the working people of Indiana enter the coming period with little economic hope, a politics of red state dominance, and the number two person in the White House who bears some responsibility for the economics and politics left behind. Social change in Indiana, as with the nation at large, will require a vibrant, active progressive program in the electoral arena, the 2018 elections for example, at the same time that mass movements direct their attention to improving the lives of the 99 percent.