Area Economy Slowing Improving

This commentary by Howard Cohen, QLC chairperson, was published in the Michigan City Dispatch on Wednesday, October 24, 2007.

In 2004, the Quality of Life Council judged our region’s economic condition to be poor but promising. Unemployment, consolidations and downsizing in the steel industry and the lack of coordinated planning were major concerns. Are we making progress?

The economic health of a region depends on three big, interconnected ideas. First, the region needs a balanced employer base. Each business sector has its own cycle, and the best protection against decline in any one industry is to have a healthy variety of industries in our region. Northwest Indiana is becoming less dependent on large manufacturing by encouraging growth in healthcare, leisure and hospitality, technology, transportation and logistics, construction, and financial services. However, the progress is incremental and slow. Since 2002, manufacturing jobs as a percentage of total employment decreased about 1 percentage point to 15.2% in the three county region. Unfortunately, overall job growth was an anemic 1.9% across the region over the same four year period. 

Second, the region’s workforce must have the skills that both meet current needs and anticipate future needs of growing industry sectors. In a balanced, growing economy, a skilled workforce is an educated workforce. Businesses will locate in regions where they can meet their workforce needs, and they will leave regions that can not supply the necessary personnel. The best strategy for individual workers is to acquire new skills and be prepared for new opportunities as indicated by the percent of the population with a bachelor’s degree or higher. As a region, this indicator has been flat at 19.2% for the last two years and has increased 2 percentage points since 2000.
 
Third, where possible, within a balanced array of leading industries, a region should seek to replace industries offering lower wage jobs with industries offering higher wage jobs. Indiana has identified health sciences, advanced manufacturing, 21^st Century logistics and information technology as growth areas that will bring high wage employment.  The region’s wage growth since 2003 significantly outpaced inflation indicating progress towards this goal. However, wage growth lagged state and national averages. 

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n addition to these indicators, it is possible to point to many positive qualitative markers: a stabilized steel industry, BP’s projected expansion, a proliferation of new businesses in several recently-established incubators, growing cooperation at the regional level. There are also many yet-to-be addressed challenges: unacceptable unemployment rates in minority communities, insufficient capital investment in emerging businesses, uncertainty in state and regional policies on taxation, and an underdeveloped transportation