MARCUS: Governor’s ship of a state losing sailors?

On Jan. 19, Gov. Mitch Daniels delivered his State of the State address. I hope you heard or read it. If not, you can go
to the governor’s Web site and read it. It has a nautical theme and will lift your spirits.

That’s
what a State of the State address is supposed to do. Make us feel better about who we are, where we are and where we are going.
Just a few days later, President Obama did the same for the nation. Now all of us can get on with shopping for Valentine’s
Day.

The State of the State message puts the legislative branch particularly into convulsive congeniality. Every
governor is the official captain of the state cheerleaders. His message inspires the clever, artful gymnastic exercises by
our General Assembly. The members climb on one another’s shoulders, flip in the air, and always land gracefully on their
feet. 

Sadly, these efforts rarely have any positive effect on the team, the more than 6 million Hoosiers
slogging through the mud on the fields of reality. But the legislative chambers are not the place for reality.

Daniels
offered a strong platform for progress in difficult times. He encouraged continued reduction in governmental excesses at the
local level. But someone fed him the wrong facts on what has been done. For example, the governor said the Legislature “reduced
the number of cooks in the assessment kitchen by about 1,000.”

Yes, there are far fewer township assessors,
but how many fewer people work on assessments today in Indiana? In many counties, former township assessors are now on the
county payroll instead of the township rolls.  

It was good to hear the state could save $40 million to $50
million by changing the way it pays investment fees for its retirement funds. One does wonder, however, why that step was
not taken earlier in this cost-conscious, detail-oriented administration.

He supported the fatuous constitutional
caps on property taxes while giving nominal encouragement for less politics in the redistricting process that is approaching.

I was cheered by the governor’s declaration that only “one in 11 workers is unemployed.” However,
it troubled me when I realized the governor should have said “one in 10 workers is unemployed.”

“Oh,”
you say, “nitpicking, fault-seeking, fatuous figure freak, that’s of no consequence.”

I agree.
What difference does it make if the governor neglects nearly 25,000 unemployed Hoosiers? Probably they weren’t listening
to his speech; certainly, the media representatives and most members of the Legislature wouldn’t care. 

What troubles me is that Daniels was not fed the right information about unemployment in Indiana. Our unemployment rate
may be below the national average and below those of surrounding states, but those facts do not tell the real story.

From the end of 2007 to December 2009, Indiana lost 274,000 employed workers, a decline of 8.9 percent, and the third-worst
percentage decline in the nation, behind only Alabama and Michigan. Yet the number of people unemployed in Indiana rose only
161,000. Our labor force (the number employed plus the number unemployed) fell 113,000. To make this statistic clearer—of
every 100 Hoosiers who lost jobs, 59 became unemployed and 41 left the labor force.

What is going on? If this is
not a wild statistical anomaly, what does it mean for our economic development and education policies?

The demographics
of our state are the foundation of our future. In this census year, this issue should have been a major concern of the governor’s
State of the State address. Are these Hoosier workers retiring or abandoning market employment? Are they leaving Indiana?
Are they unemployable except in the closed factories of inefficient companies?

The governor discussed new jobs
for Hoosier workers. But, if two of every five job losers are not seeking work, what does it say about the state of our state?•

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Marcus taught economics for more than 30 years at Indiana University and is the former director
of IU’s Business Research Center. His column appears weekly. He can be reached at mmarcus@ibj.com.