The Herald Bulletin

November 4, 2013

Emmett Dulaney: Madison County Economic Outlook 2014: Part I


The Herald Bulletin

---- — As the year starts to wind down, it is time to take a look at the numbers for the county, attempt to put them in some perspective, and see what the near future might hold. There are so many datasets available that it is easy to get lost in what is meaningful and what is not.

To simplify matters, we will limit the discussion to a few crucial categories – looking only at the first this week — and spread the dialogue over the coming month. At the conclusion of the discussion, we will try to pull the numbers together and build from the foundation they provide. Until then, the discussion will be predominantly positive (in the economic sense of the word) as opposed to normative – describing what is, as opposed to what should be.

Employment and the Labor Force

While unemployment is down for Madison County as compared to the same time period last year (8.6 percent in August compared to 9.8 percent), that does not say much. A rising tide lifts all ships and 89 of the 92 counties in the state have a lower unemployment rate this year as opposed to last. What is a far more meaningful number is that the county’s unemployment rate is 15 percent higher than the state’s rate of 7.5 percent and it has trended at that level – or more – for years.

From a theoretical standpoint, over time those without jobs in the area should move to where employment thrives and the difference between the county average and the state average should decrease. The fact that it has not done so indicates that the type of unemployment we face is structural – the worst of the various types that exist. If that is the case, then the reason that the unemployed don’t follow the jobs is because they don’t have the skills necessary for any openings that might exist and need additional training/education to be better equipped in the labor force.

The Indiana Business Research Center for Econometric Model Research (which can’t possibly all fit on one business card) breaks the state into 14 metropolitan statistical areas (MSAs) and follows trends associated with a variety of variables, one of which is the average employment growth rate. It should be no surprise that nine of the 14 MSAs – including Anderson — experienced negative growth rates between 2007 and 2011. What is a surprise is that within the whole state, Anderson is the only MSA projected to have negative employment growth from 2012 to 2016 and that the loss expected during the latter time period will exceed that of the former.

A final noteworthy tidbit when it comes to employment: within the county, only 14 percent of the firms employ 19 or more employees. The vast majority of employers are small businesses and mom-and-pops with a few employees.

Next week, we will take a look at the population and demographics of the county, including welfare.

Emmett Dulaney is an Anderson resident and the author of several books on technology. His column appears Tuesdays.