Morton Marcus

Morton Marcus

Here are the facts about Hoosier earnings, with comparisons to the nation, in the years of 1999 and 2019. These years were chosen to bracket two decades dominated by the internet and telecommunications revolution, while avoiding the COVID year of 2020.

The data are from the U.S. Bureau of Economic Analysis. No adjustment for price changes were made because those changes themselves incorporate information about changes in demand and conditions of supply.

Interpretations are left to the readers who object regularly to those supplied by the author. Some observations are in order, however.

First, of 87 industries with complete data for both years, the U.S. had 81 (93%) with higher total earnings in 2019 than in 1999; Indiana had 75 (86%). Growing earnings will be observed if more workers are employed, and/or workers are employed at higher wages, and/or workers are putting in more hours than previously.

Second, an industry may have increased total earnings, but not necessarily be paying a higher share of the total earning in the nation or the state. An industry with growing earnings may not be growing as fast as the economy as a whole and thereby not contributing as much to the overall economy’s growth.

In the U.S., shares of total earnings rose for 32 of 87 industries (37%); for Indiana, the figure was 38 (44%).

A growing share of total earnings paid in the economy is one measure of an industry’s market success. By examining the change in the share of earnings paid by a given industry in one state to the changing share of the same industry nationwide, we obtain a measure of competitive success.

In 1999, the share of total earnings paid to hospital workers was 2.7% in both the nation and Indiana. By 2019, hospital earnings grew to 3.4% of the nation’s total earnings, but Indiana’s hospitals had moved up to 4.2% of state earnings.

Why this difference? Indiana hospital earnings advanced by 189% in an economy growing by 87%. Nationally, hospital earnings grew by 168% compared to a 115% increase in total earnings. Hence, the difference was the relative growth ratio of Indiana hospitals (2.2) exceeded the ratio for U.S. hospitals (1.5).

In the private sector, motor vehicles, bodies and trailers, and parts manufacturing was Indiana’s most important industry in 1999 with 6.5% of earnings. By 2019, that share of Hoosier earnings declined to 4.4%. Ambulatory health care moved up to number one from 4.1 to 6.2%.

Nationally, the Motor vehicle industry fell from 1.2 to 0.6% of earnings while managing only a 10% growth in earnings against a 115% general increase.

Those are some of the facts about earnings. How would you evaluate Indiana economic performance given the data above?

Morton Marcus is an economist. Reach him at mortonjmarcus@yahoo.com.

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