Emmett Dulaney: Madison County economic overview: Part I

Wed, 2012-10-31 10:32 -- univcomm
October 31, 2012

To be useful, an economic overview should contain at least two parts: a snapshot of what has historically been and an outlook of what likely looks to be. The purpose of this discussion is to fulfill the first part in three crucial categories with the outlook coming next week. While the numbers may look discouraging, they tell a story that cannot be avoided no matter how cold they may appear.

The first category to examine is employment. According to the Indiana Department of Workforce Development, the Madison County labor force has declined by 4.2 percent since 2000. While that wouldn’t be bad if the same number of jobs also left, unfortunately the number employed has declined by 11.6 percent. This makes a 234 percent increase in unemployment within the county between 2000 and 2011. Not surprisingly, the 2011 annual unemployment rate was over 16 percent higher for the county than the state (10.5 percent compared to 9.0 percent). The last statistic to consider in this category is wages since a decline in jobs could conceivably be offset in impact by an increase in wages. That is not the case, however, as wages across all categories in Madison County are below the state average, not to mention the national average.

A second category to examine is education. The city schools have been losing students for a number of years and the trend shows little sign of reversing. A significant portion of that loss in students is attributable to families responding to the weak performance of the city’s schools by using the tuition transfers to send their children elsewhere. As better performing students leave the schools, it creates a spiral in which those very schools continue to suffer and perform poorly in part because of the aptitudes of students they are left with. After graduation, over 57 percent of high school graduates go on to a four-year school, yet only 16.6 percent of area residents have a four-year degree. Clearly, this is symptomatic of a brain drain in which educated residents are leaving the community.

The final category to examine is housing. For a number of years, Madison County has been thought of as a bedroom community but we’ve finally reached the point where we’ve even stopped building bedrooms.

The following table, compiled by Dr. Barry Ritchey, shows the number of single family housing permits issued in the past 10 years and the amount of housing construction each represents:

2003: 499, $66 million
2004: 555, $83 million
2005: 527, $80 million
2006: 314, $54 million
2007: 241, $40 million
2008: 79, $18 million
2009: 61, $15 million
2010: 76, $17 million
2011: 74, $14 million
2012 (through August): 19 — $3.6 million

In many ways it is a fitting metaphor that the bricks from the Nicholson File building site, which once would have been tossed away without a second thought, are now being reused to build something new as budgets and resources throughout the county have been reduced.

Next week, we build upon the numbers presented and move to the outlook portion of the overview.

Anderson University is a private Christian university of 2,600 undergraduate and graduate students in central Indiana. Anderson University continues to be recognized as one of America's top colleges by U.S. News and World Report, The Princeton Review, and Forbes. Established in 1917 by the Church of God, Anderson University offers more than 65 undergraduate majors and graduate programs in business, music, nursing, and theology. The Falls School of Business is one of Anderson University’s largest academic departments offering eight undergraduate majors as well as MBA and DBA programs. The school is accredited by the Accreditation Council for Business Schools and Programs (ACBSP) and is a member of the Christian Business Faculty Association (CBFA).

Columns from Anderson University’s Falls School of Business are published Tuesdays in The Herald Bulletin. Tuesday’s columnist is Emmett Dulaney, who teaches marketing and entrepreneurship.