Thursday, April 16, 2009

Is Indiana an Economic Loser?

The subtitle of a piece by the IPR's Craig Ladwig at

After a century of being one of the most innovative creators of jobs and wealth in the nation, has Indiana developed a losing mentality?

It is not an idle question. Economists see a growing separation between those states whose policies defy investment and those states whose policies don’t.

Statehouse boosters are adamant that Indiana is in what might be called the “winner” camp. When the issue of job loss comes up, they cite the fact that we outperform our neighbors Michigan, Ohio and Illinois....[but] politicians know that Indiana isn’t competing with any of those states. It is competing with Texas, Virginia, North Carolina, South Carolina, Georgia, Florida, Iowa, Nevada, Arizona, Utah and most recently Oklahoma.

These and 11 others have adopted right-to-work laws. That means workers there are free both to join unions and to refrain from joining unions. It was successfully argued in each state that forced unionization is a violation of the Constitutional right to freedom of association as well as the common-law principle of private ownership of property.

Right or wrong, the market likes the idea....

The presence of labor flexibility is becoming a certain indicator of growth....

There is another big problem. In the 1970s [with the first big property tax "reform"], Indiana approved a collective-bargaining law that treats public employees as if they were competing in a free market....Today, it is impossible for even the most stout-hearted legislature or governor to control state spending levels.

Indiana has lost its reputation as a low-tax state. The Tax Foundation now ranks us 28th in overall tax burden. That compares with a 41st place ranking as recently as 1983....


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