Editor’s Note: The following is a column authored by Michael Hicks appearing in the Indianapolis Star assessing the healthy employment environment in Indiana. Hicks is the director of the Center for Business and Economic Research and a professor of economics in the Miller College of Business at Ball State University. To read the full article click here.
It is difficult to overstate how good a year Indiana’s labor markets have seen. Last December I forecast the state to see 57,000 new jobs through 2014 with a drop of the unemployment rate to close to 6 percent. This would’ve been good news, but the reality was better.
Nearly all labor force data in Indiana has seen improvements. Seasonally adjusted numbers were right on forecast with 54,000 jobs created thus far this year. However, my forecast was based on the raw numbers because the seasonal adjustment factors were changed in January. Here Indiana has seen 71,500 new jobs so far this year with December’s typically strong numbers still ahead of us.
Indiana has also had labor force growth of more than 74,000 workers this year. This is important because it signals a change in the underlying confidence in hiring. Over the long run, adding more workers and people will be critical for Indiana’s prosperity, and this year was a belle weather indicator.
The growth in employment and labor force keeps our unemployment rate from dropping as quickly as in other states. This is a classic example of the inability of the unemployment rate to tell us a clear story about the state of the economy. Importantly, Indiana now has more payroll employees than at any previous time in its history.
Other indicators are strong as well. Initial claims for unemployment insurance have dropped to mid-1990s levels in the state. Given the larger workforce, this means that we are in a period of more stable job growth. Reinforcing this is the big drop in something called “mass layoffs” data, which are factory downsizings of more than 50 workers and are specially reported to the Department of Labor. Also, weekly hours worked have stabilized at more than 41 hours, which is high enough to suggest some tightening of labor markets.
The only unhappy news is that wages have remained effectively unchanged for a year in Indiana. This is part of a national issue that is likely more due to the polarization of labor markets between higher and lower earning groups, than the experience of individual workers.
To read the full article click here.