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2/27/2012 8:06:00 AM
OPINION: Putting perspective to unemployment

Morton J. Marcus is an economist formerly with the Kelley School of Business, Indiana University. His column appears in numerous Indiana newspapers

         Amid the noise of the Republican primaries and the deafening silence of the Democrats, here are a few words of simple reality.

          In the recession of 2007 to 2009, 8.4 million persons in the United States lost employment. However, by December of 2011 we had 2.7 million more persons working in the U.S. than we had two years earlier. That means we had recovered one-third of the employment lost in the recession. There remained, unfortunately, 5.7 million jobs needed to bring us back to our previous level of employment.

          That’s the national picture. At the state level, the story is quite different. Texas hardly knew anything about the recession. The total number of employed persons in Texas at the end of 2011 was 4 percent higher than at the close of 2007.

          In total, 8 states from Vermont to Alaska closed 2011 with higher numbers of persons employed than in 2007. The recession had come and gone for those states. For the remaining 42 states, the story was quite different.

          In Indiana, the recession reduced our numbers employed by 287,000 persons. The recovery brought employment back by 109,000 which left 178,000 fewer employed Hoosiers. At the end of December 2011 Indiana stood with the 9th steepest employment hill to climb.  Our 2011 employment was 5.8 percent below our 2007 figures. The nation was only 3.9 percent below 2007. Michigan was the worst at 9 percent below.

          This, however, cannot be true if we are to believe the proud sounds being made at the Indiana Economic Development Corp. There we hear about 2011 being the best year ever for this and the most superior year for that. This and that always do well at IEDC, but now they are doing even better.

          Within our state, 88 of 92 counties still have year-end employment below 2007 levels. In 12 counties, the data are worse than in Michigan -- the worst in the nation at 9 percent. Monroe, Owen, Greene and Henry did not gain jobs between 2009 and 2011. They still await the blessings of Indiana’s “boom.”

       In absolute numbers, rather than percentages, the task before Lake and Elkhart counties are about the same: 15,500 jobs to recover to 2007 levels. Both counties have recovered about 25 percent of the employment lost in the recession putting them on a par with Shelby County which has only 1,600 jobs to regain its pre-recession level.

           The interesting question in this election year is: “Who is expected to provide these jobs?” Many candidates say government does not create jobs. That is out-and-out nonsense; teachers and public safety workers are government workers. Other candidates say only the unemployed can create jobs though the imaginative use of their own resources. This has limitations since the resources of all sorts held by the unemployed diminish rapidly in the first weeks of a spell of unemployment.

          Strangely, some candidates say that government regulation destroys jobs. These are usually the same candidates who see only bloated bureaucracies where people hold jobs that are destroying other jobs.  Now, if we could reduce the bloat that would reduce the destruction, the unemployed government workers then could become entrepreneurs in the deregulated sectors of the economy. Miracles can still happen.

          It is far more fun to have ideas about employment than the simple facts.






Editor, John C. DePrez Jr.; Executive Editor, Carol Rogers; Publishers: IBRC and IAR


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