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May 7, 2013

MORTON: Good news is good

I like to complain as much as anybody else. In truth, I may do more than my share of finding fault and wagging a finger in warning. Nonetheless, I’m tired of commentators (including many economists) who find nothing good and only the darkest clouds for the past few months.

When the latest employment numbers were reported last week, they were universally described as “disappointing” and “not up to expectations.” The fact that they demonstrated a continuing upward trend in the national economy was discharged by the gloom merchants as “insufficient to support positive anticipations.”

To me, short-term changes in the month-to-month employment numbers should not be taken as gospel. Right now, unadjusted year-over-year numbers look safest for interpretation. What I see is a slow, but persistent recovery that ranges from vigorous to sluggish across the nation.

When we compare private sector employment in March of 2012 and 2013, North Dakota (7.7 percent growth) and Utah (5.9 percent) lead the fifty states while Kentucky trails way behind at 0.5 percent. Indiana ranks 32nd with 1.6 percent increase compared to the nation’s 1.9 percent advance.

Forty thousand additional jobs in Indiana is not a number that warrants bringing out the celebratory fireworks, nor does it justify wearing funereal garb when addressing the subject.

Jobs alone, however, do not tell the story. How well are American and Hoosier workers being paid for their efforts? The average weekly earnings of American workers rose by more than $15 in the past 12 months to $818.40. That is a 1.9 percent increase on the surface. Yet with consumer prices rising by 1.5 percent over the same period, take home pay squeezed out a meager 0.4 percent increase for the year.

Indiana had a good year in average weekly earnings. We ranked 14th in the nation in the growth of earnings, doubling the nation’s 1.9 percent increase with our own 4 percent growth rate. Our 2013 average of $761.55 put us where many Hoosiers feel comfortable — in 26th place among the 50 states, or 7 percent below the national average.

The highest weekly earnings in the nation (in excess of $925) go to workers in Massachusetts, Washington, Connecticut and New York. The lowest weekly earnings are found in Mississippi, South Dakota, Nevada and Arkansas.

Hoosiers did well in the growth of weekly earnings despite not increasing their hours worked per week. Total earnings are the product of hours worked and earnings per hour. Since our hours worked per week were unchanged in March 2013 from 2012, the growth in weekly earnings is due totally to an increase in earnings per hour.

Here, in growth of earnings per hour, Indiana ranked 9th in the nation, besting 41 other states and out-pacing the scourge of inflation.

Now that the Legislature has gone home, maybe our state administration could find out the reason for this potential horn-blowing event.

Morton J. Marcus is an economist, writer and speaker formerly with the Kelley School

of Business at Indiana University.

He can be reached at mortonjmarcus@yahoo.com.

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