Felt like I should have a chart.
I’m not an economist. When I see a lot of charts and numbers about the economy, they tend to wash over me. On an individual level, for example, I don’t tend to care what my house is worth as long as I’m comfortable living in it. That view extends to my opinions on public policy where the economics numbers tend not to penetrate for me unless they offer insight as to whether the economy is helping to people to live happy, meaningful lives. In my estimation, that’s ultimately what an economy is for.
Fortunately, Michael Hicks is an economist, and he writes things that help me understand the relationship between Indiana’s economy and the well-being of its people. You should go read his recent Substack post, “Chasing Smokestacks Isn’t Working.” In it, he makes the case that our lawmaker’s economic policy choices have not been working well for Indiana. In particular, chasing and subsidizing manufacturing jobs has not done much to help Hoosiers over the last decade or so. Despite a great deal of effort and money to incentivize factory jobs in Indiana, “A factory job today pays no differently in Indiana than it did in the Clinton Administration, and a new factory job pays a bit less.” The manufacturing jobs we’re adding are low wage and “low skill (or at least low formal education.)” Workers in Indiana have experienced a declining share of GDP in terms of wages and benefits.
Meanwhile — and these parts jumped out because discussions of education policy are like catnip to me — “[s]pending on public education is well down from 2010 levels, spending on higher education much lower than in 2010, and on a per student basis declining faster than at any time in state history. … Indiana just doesn’t have the educated workforce the modern economy needs. Educational attainment means higher wages for everyone.” And I’ll just block quote and bold this next bit because it’s important:
The link between educational attainment and per capita income is not a mirage conjured by some faculty member. Rather it is one of the most continually regular empirical facts in the social sciences.
So, we’re chasing low paying factory jobs associated with low educational attainment, eroding our investment in public education, producing fewer educated Hoosiers, and losing more of the kids we do educate here. Consequently, the firms with the high-skill, high-pay jobs that require higher education are less likely to locate in the State. An eroding school system is exacerbated by limited options for local communities to make themselves into places where people wish to live. This is not from Professor Hicks, but some of the challenges faced by local government arise from fairly strict limitations on the taxes they are permitted to levy and dictates from Indianapolis tying the hands of local officials on any number of issues. In a different publication, Prof. Hicks (and colleagues) argue that improving quality of life in communities, not just limited to the ability to do business in the community, is key to rejuvenation and prosperity. Low taxes and mere employment are not enough.
Communities should aspire to strong schools and they need to have recreational opportunities, cultural activities, and solid transportation infrastructure. Again, this is me speaking, but if you own a company or are important enough as an employee to drive location decisions for the business, are you going to move your family and the families of your executives or in-demand employees to some sad, dying town with no prospects and nothing to do? Of course not. Even if you might be willing to plop down a factory where it’s not too important who’s manning the machines to pump out a few widgets. Maybe you’ll even visit once a quarter. If you’re a decision maker or someone with pull, you’re going to make damn sure that your kids are able to go to a top-notch school. (I think a non-trivial reason that West Lafayette has been doing well is that, in addition to Purdue, it has the West Lafayette schools — consistently ranked highly in the nation and at or near the top in Indiana.)
Once again, I’m reminded of the “No Time to Lose” study by the National Conference of State Legislatures from six years ago about lessons we can learn from world-class education systems. (Spoiler: vouchers and privatization isn’t something that any of the best school systems in the world do.) On the subject of manufacturing, the study discusses developing a Career and Technical Education path for those students preferring more of an applied education rather than a more academic approach. This shouldn’t be an educational backwater like so many vocational programs. It should be geared to boosting the national economy and providing a higher standard of living for a broader base of the population. From the study:
Singapore and Switzerland, in particular, have built strong systems of CTE with close ties to industry. Singapore uses a school-based model and Switzerland uses an
employer-based model. In these countries, CTE is not perceived as a route for students lacking strong academic skills, but as another approach to education, skills development and good jobs. CTE is well funded, academically challenging and aligned with real workforce needs. It is hands-on, attractive to students and parents, and can lead to university for students who may seek professional and managerial positions later. For other students, CTE is a pathway to good jobs, by building technical skills that can be achieved much earlier than the traditional academic experience.
If you followed the education shit show from this most recent installment of the General Assembly, even though ISTA managed to persuade the General Assembly not to enact the worst ideas, you know that our state is not taking seriously the lessons of world-class educational systems in other countries. More teaching by untrained, unlicensed teachers? Permit lawsuits from people who are made uncomfortable by what they’re taught? Post a year’s worth of lesson plans prior to the school year? These are not the proposals of people serious about making sure our schools can compete against the best in the world.
I’m just repeating myself from other posts over the years, but we need to beef up our education schools, attract the best students to them, pay them commensurate to our expectations, give them the respect of upper echelon professionals, and rely on them to teach the kids. We need to properly fund our traditional public schools and stop fragmenting the system with vouchers and other privatization schemes. We need to invest in local public infrastructure and amenities. And, we need to trust that these investments will create a virtuous feedback loop that will offer returns in the form of an improved quality of life that outweighs the money spent on the investments.
But at least we’re getting a tax cut?
I’m Indiana born-and-raised, and I’ve been in the Greater Lafayette area my entire adult life. Inertia and community involvement keep me here. But I could work from anywhere, and the Indiana GOP seems to be trying its damnedest to make me look elsewhere.
As my kids rapidly approach college age, it occurs to me that the chances of them pursing careers in Indiana are probably pretty small. And, all things considered, do I want them to tie their future to the fortunes of this State? If they go elsewhere, I can see moving to be close to wherever they go once I’m able to retire. And that would be the end of the Massons in Indiana after a run of more than 160 years.
So much to say I’ll read all the links later. By lowering taxes it makes it harder to give the citizens good infrastructure, schools, cities and towns to provide the services they need.
When I lived in Milwaukee my mom would always complain about the high taxes. They had (and still do) a tremendous bus system. My dad didn’t drive and in eight years he was late for work once. We would go to the park in the summer and there were two college students (male and female) coaches that were in charge of the kids and we participated in all sorts of activities. Swimming lessons were free as was playing baseball. They would put a big slide up in the winter and we would take our sleds and saucers out and have a great time, School books were free and the education we received was first rate.Streets were great and we never had a pot hole problem.
We really don’t pay much in city, county and state taxes so raising them would boost our quality of life. More thoughts later.
We’re pursuing a penny-wise, pound-foolish approach to public finance. It makes sense to resent taxes and public spending if you believe that the benefits to you or those you care about don’t equal or exceed what’s being taken from you. But I think such a belief often stems from people taking the benefits for granted. That, plus a narrow view of who they consider to be their community and any number of political grifters stoking resentment with specious or disingenuous examples of waste.
Most of our legislators come from the parts of Indiana that are clearing out, best I can tell from the most recent Census. Their actions, to me, are those of a group of people who see no future for their constituents and hence no reason to care about the future.
If the best and brightest leave? So what – we didn’t want their kind any how.
Yup Joe the more education you acquire the more liberal you become. We JUST can’t have that in Indiana!!!
That was a great article from Hicks (out of many wonderful articles by him).
The problem with local government getting stuff done starts with the tax caps. Everyone involved in the local government business predicted the disaster they would create. But the propaganda machine was stronger and they passed overwhelmingly. Then local government has so few options to increase revenue that they simply can’t keep up with expenses.
Now they are cutting taxes which will go essentially unnoticed by everyone. And yet there was never a discussion about using that surplus for schools, or supporting ongoing infrastructure projects (to free up cash for future projects), or anything that will benefit our future.
This may sound strange to many but I don’t fret and fret about taxes. I’ve told many over the years that if I have a large tax it bill it means one thing – I had a good year and that should be a good thing.
I’ve also noticed that the people that don’t understand that concept also fail to understand the idea of the greater good.
This state drives me nuts…and yet I choose to stay here. But like Doug mentioned, we may end up closer to our kids when they get settled down.
Inflation is kicking in and the Fed will hike interest rates 1 1/2 percent or more this year to slow growth. 30 year mortgages will pop between 6 to 7 percent. That should depress tax revenue exactly when the towns and the cities need it.
My sister who retired from a career working as a teacher and a career center administrator was telling us some of the things she hated. She said,”They would start a program that really worked and then the funding would run out.”, Then legislators would pass laws to make teachers and administrators go to conferences on the weekends and give the schools no funding.to pay for it. The schools found out paying the fine for not going was cheaper then sending teachers and administrators (they were not happy giving up their weekend) and paying overtime and hotel, food, etc. Just two of the horror stories.
Where am I going to this.? How we can force the legislature to start listening to our educators? Maybe it is impossible in the environment we are at the moment..
Unfunded mandates should be banned. We need to find a better way to fund school and get rid of referendums. Butler county in Ohio let the the career center control all the IT networking and purchases for the school districts in the county and they saved millions over the 25 plus years my sister worked there.
There should be a county or state appointed persons (depending on the schools in the county) that is familiar with infrastructure, construction, remodels roofs etc.They would keep a eye on cost and shoddy work. I have heard stories about how administrators and even teachers have made changes to remodels not realizing it was costing them money.. Instead of taking the lowest bid , do some research on which bidder does the best job. Have the head of maintenance call other schools maintenance people and find what companies they were happy with.
How about having a level playing field when it comes to athletics and clubs and ECA activities. Clubs get little to no money from so many schools. Sports teams get the big football and basketball stadiums costing millions. I have no problem with football fields but do you need luxury press boxes and dressing rooms.. There coaches collect the majority of the spiff money, Our 7th and 8th grade robotics tryouts had over 75 kids that had to try out for 30 spots. The coaches only could buy 30 robots and never could afford parts. History, language, clubs etc get little or no money. Sports parents pay about $200 for each sport programs. Basketball, football, baseball, soccer, volleyball, tennis and gymnastics are basically travel sports programs where travel sports kids are mostly starters. Two hundred is peanuts compared to travel sports fees. They get the best transportation, equipment, playing areas, paid referees.etc. while everyone else is begging for money.
Actually most kids drop out of athletics by the seventh grade when schools take over. In large schools athletics for the majority of the students is not on radar screen. My school district high school has 2,800 students. Not more then 300 students show up for a football or basketball game. That leaves 2,500 students under served.
Purdue won – Edey needs to stay on the left side of the basket on offense! I thought Painter was a good coach! Grin
What does Michael Hicks mean about manufacturing jobs coming back to the USA? There will be some, I believe the ones we would want are the high priced jobs that can’t be done by automation.Texas Instrument brought jobs back and automated over 75% of the new plant. I think it is a dog and pony show for the companies and politicians pushing these practices.
. Right now we are having a renaissance for the under educated. Amazon has hired over 24,000 people in Marion county and the doughnut county’s. All the new warehouses that have been built in Indiana are where the growth is happening.. The ads I see for manufacturing are dwarfed by the other job ads.What happens when all these jobs disappear due to automation? We may have to raise taxes to help pay for all the unemployed workers.
I think we made a huge mistake taking all the IT classes out of the high school and sending them to the career centers.. So many jobs require you to have IT training not just lets learn office.
I agree whole heartily that Indiana needs to step up their game big time when it comes to education. We need to spend more to teach the new technologies to high school students that keep springing up. We can’t always expect the colleges to bail us out.. Of course lets pay the teachers a more then a bad living wage.
If Indiana keeps falling behind, so many states that will understand world class education, they will keep getting the jobs we covet. I think politicians are afraid of the older people that will vote them out of office if they increase taxes to pay for education.
As for getting rid of referendums case in point. Franklin Township has voted down the last two referendums. The next is the coming May 3rd and I have heard nothing from the school corp or the citizens. The older citizens won’t vote for it not wanting their taxes to go up. Plus any parents that students that go to a religious or charter school would probably vote against it. Since the older people will show up in numbers I don’t understand why they aren’t waiting for November. Interest rates on new houses will go up between 6 to 7 percent this year along with inflation spiking so that ought to slow the housing boom.
If it is voted down again the world won’t end. and on the good side no over priced athletic center.