Morton J. Marcus is an economist formerly with the Kelley School of Business at Indiana University. His column appears in Indiana newspapers, and his views can be followed on a podcast: https://mortonjohn.libsyn.com.
Let’s take a short stroll through the orchards of data prepared by the U.S. Bureau of Economic Analysis. While we are there, please consider how your county can increase the earnings (wages and salaries) of your residents.
No, I’m not going to preach for higher minimum wages, more skillful workers, or generous employers. Leave all of that outside the orchard gate. Let’s just think about the income generated in our counties, but paid to workers who live elsewhere.
That’s right. The person working next to you in a factory, warehouse, office or store may be an “alien” from Henry County (New Castle). S/he takes his/her earnings back home to Hancock County (Greenfield) where s/he buys groceries and pays property taxes, to say nothing of other spending.
Do you have any sense of the magnitude of those funds flowing out as each commuter leaves for his or her home in another Indiana county? Or maybe even in an Ohio county?
In 2017, the most recent year for which we have data, $64.5 billion left Hoosier counties in the pockets of these “foreign” workers. If those dollars went to another Indiana county, we take a pretty relaxed attitude about it…. just part of our good neighbor policy. But we might get queasy about that money leaving the state and ending up in Illinois, Michigan, Kentucky, Ohio or elsewhere.
Luckily, when we count up all the dollars that entered Hoosier counties, they equaled $70.5 billion. It’s a whopping 37 percent of Hoosier base earnings. Additionally inter-state commuting left Indiana with a surplus of $6 billion. For every dollar escaping Indiana, we had a $1.09 coming back.
Did you hear the governor, his legislative buddies, or anyone object? Of course not. The idea that commuting gives a little twist to our understanding of our economies and economic development efforts, is not a popular topic.
Look at Marion County, the great heart pumping economic life into so much of the state. In 2017, Marion County gained $4.5 billion from commuting while it sent $20.9 billion to comfortable suburbs through a maze of potholes. What candidate for public office would campaign against this $16.4 imbalance?
Similarly, would candidates in Hamilton County seek to reduce its net commuting “surplus” of $6.4 billion? Neighboring counties of Hendricks and Johnson each net over $2 billion from commuting. While Elkhart County has a commuting “deficit” of $2.7 billion, Vanderburgh County “loses” $1.5 billion annually.
In all, 71 of Indiana’s 92 counties have inflows of earnings greater than the outflows they experience. That leaves 21 counties in the reverse positions of outflowing earnings exceeding the inflows.
Should we care? I would argue, Yes. At one time, commuting might have been the most efficient household decision subsidized by government infrastructure. Now, we should look more closely at where jobs are located and whether better choices can be made to reduce commuting costs.