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Indiana Economy Offers Caution and Inspiration as Primary Nears Indiana Economy Offers Caution and Inspiration as Primary Nears
(about 11 hours later)
INDIANAPOLIS — As the presidential race came to Indiana, candidates of both parties seized on a fresh example in this industrial state of factory jobs being shipped abroad.INDIANAPOLIS — As the presidential race came to Indiana, candidates of both parties seized on a fresh example in this industrial state of factory jobs being shipped abroad.
“Is anyone here from Carrier?” Donald J. Trump called out in Evansville, Ind., last week, referring to the Carrier Corporation’s closing of factories that make heating and air-conditioning units. “They let go of 1,400 people to move to Mexico,” Mr. Trump said. “And you know what? They have to pay a consequence.”“Is anyone here from Carrier?” Donald J. Trump called out in Evansville, Ind., last week, referring to the Carrier Corporation’s closing of factories that make heating and air-conditioning units. “They let go of 1,400 people to move to Mexico,” Mr. Trump said. “And you know what? They have to pay a consequence.”
At a union rally the next day at the State Capitol, Senator Bernie Sanders of Vermont thundered a message to the chief executive of United Technologies, Carrier’s parent company. “Stop the greed,” he shouted. “Stop destroying the middle class in America! Respect your workers!”At a union rally the next day at the State Capitol, Senator Bernie Sanders of Vermont thundered a message to the chief executive of United Technologies, Carrier’s parent company. “Stop the greed,” he shouted. “Stop destroying the middle class in America! Respect your workers!”
The picture of manufacturing decline and middle-class retreat has become a driving narrative of the presidential race, spawning economic populism on both the left and the right.The picture of manufacturing decline and middle-class retreat has become a driving narrative of the presidential race, spawning economic populism on both the left and the right.
Yet Indiana, which holds its primary on Tuesday, defies an easy picture of Rust Belt decline. By many measures, the state is humming economically, offering a contrarian reality to the gloomy scenario that the presidential candidates are presenting to motivate voters.Yet Indiana, which holds its primary on Tuesday, defies an easy picture of Rust Belt decline. By many measures, the state is humming economically, offering a contrarian reality to the gloomy scenario that the presidential candidates are presenting to motivate voters.
With nearly one in five jobs in manufacturing, the highest share of any state, Indiana’s gross domestic product is accelerating faster than any of its Great Lakes neighbors, according to the latest figures from the Commerce Department.With nearly one in five jobs in manufacturing, the highest share of any state, Indiana’s gross domestic product is accelerating faster than any of its Great Lakes neighbors, according to the latest figures from the Commerce Department.
Unemployment at the end of last year was 4.4 percent, below the national average of about 5 percent. Even though the figure has ticked up in 2016, economists attribute the increase to the large number of people returning to the work force, including job seekers moving to Indiana.Unemployment at the end of last year was 4.4 percent, below the national average of about 5 percent. Even though the figure has ticked up in 2016, economists attribute the increase to the large number of people returning to the work force, including job seekers moving to Indiana.
Factories in heavily industrial Elkhart County, a center of recreational vehicle manufacturing where unemployment has been significantly reduced, have resorted to calling a homeless shelter to look for workers.Factories in heavily industrial Elkhart County, a center of recreational vehicle manufacturing where unemployment has been significantly reduced, have resorted to calling a homeless shelter to look for workers.
The Indianapolis region is growing faster than Chicago, Cleveland or Detroit, and personal income statewide rose 3.6 percent last year, faster than the national average.The Indianapolis region is growing faster than Chicago, Cleveland or Detroit, and personal income statewide rose 3.6 percent last year, faster than the national average.
“The economy here in terms of the data is as good as it’s been in a generation,” said Michael J. Hicks, director of the Center for Business and Economic Research at Ball State University in Muncie, Ind.“The economy here in terms of the data is as good as it’s been in a generation,” said Michael J. Hicks, director of the Center for Business and Economic Research at Ball State University in Muncie, Ind.
Mr. Hicks said that if measured by the value of goods produced, manufacturing has never been stronger in Indiana. The boom in the auto industry has played a big role in this because of the many parts factories in the state.Mr. Hicks said that if measured by the value of goods produced, manufacturing has never been stronger in Indiana. The boom in the auto industry has played a big role in this because of the many parts factories in the state.
Factory jobs have declined, he added, but not because of trade deals with other countries as Mr. Trump and Mr. Sanders assert, but because Indiana factories are increasingly efficient and fewer workers are needed.Factory jobs have declined, he added, but not because of trade deals with other countries as Mr. Trump and Mr. Sanders assert, but because Indiana factories are increasingly efficient and fewer workers are needed.
“Manufacturing employment peaked in 1973,” he said, adding that since then the productivity of Indiana factory workers has climbed 250 percent. “We need far fewer workers, and a very different type of worker, too.”“Manufacturing employment peaked in 1973,” he said, adding that since then the productivity of Indiana factory workers has climbed 250 percent. “We need far fewer workers, and a very different type of worker, too.”
In Warsaw, Ind., for example, a global center for manufacturing orthopedic devices, the workers are highly specialized.In Warsaw, Ind., for example, a global center for manufacturing orthopedic devices, the workers are highly specialized.
Despite increases in productivity, wages have stagnated in step with national trends, feeding widespread anxiety about the future. Candidates in both parties have channeled these fears at targets ranging from immigration to trade deals to the government.Despite increases in productivity, wages have stagnated in step with national trends, feeding widespread anxiety about the future. Candidates in both parties have channeled these fears at targets ranging from immigration to trade deals to the government.
And Indiana economists point to pockets of weakness within the state. Like other Midwestern states, Indiana’s rural counties are emptying: Of the state’s 92 counties, 54 lost population in 2015, according to the Business Research Center at Indiana University.And Indiana economists point to pockets of weakness within the state. Like other Midwestern states, Indiana’s rural counties are emptying: Of the state’s 92 counties, 54 lost population in 2015, according to the Business Research Center at Indiana University.
“Connersville in Fayette County, which was once called Little Detroit, they had close to 2,000 manufacturing jobs and now are down to about 400,” said Timothy Slaper, an economist at Indiana University’s Kelley School of Business.“Connersville in Fayette County, which was once called Little Detroit, they had close to 2,000 manufacturing jobs and now are down to about 400,” said Timothy Slaper, an economist at Indiana University’s Kelley School of Business.
Patti and Richard Schwalm, owners of a machine shop in rural Henry County, an hour’s drive east of Indianapolis, said they had to cut their staff to three employees in recent years. They blamed President Obama for hurting the manufacturers that are their clients.Patti and Richard Schwalm, owners of a machine shop in rural Henry County, an hour’s drive east of Indianapolis, said they had to cut their staff to three employees in recent years. They blamed President Obama for hurting the manufacturers that are their clients.
The Schwalms plan to vote for Senator Ted Cruz of Texas in the Republican primary. Pressed for details about Obama administration policies that hurt manufacturing, Ms. Schwalm acknowledged, “The problems we have are 50 years in the making.”The Schwalms plan to vote for Senator Ted Cruz of Texas in the Republican primary. Pressed for details about Obama administration policies that hurt manufacturing, Ms. Schwalm acknowledged, “The problems we have are 50 years in the making.”
Todd Witte, who works in an auto parts factory in Fort Wayne, Ind., plans to vote on Tuesday for Mr. Sanders because of the senator’s long opposition to trade deals and his history of walking union picket lines. If Mr. Sanders is not the Democratic nominee, Mr. Witte said, he will probably vote for Mr. Trump if he is the Republican nominee. Todd Witte, who works in a factory in Fort Wayne, Ind., plans to vote on Tuesday for Mr. Sanders because of the senator’s opposition to trade deals and his history of walking union picket lines. If Mr. Sanders is not the Democratic nominee, Mr. Witte said, he will probably vote for Mr. Trump if he is nominated. “I like his views on the Second Amendment,” he said. “In our local, they’re either Bernie Sanders or Trump supporters.”
“I like his views on the Second Amendment,” he said. “In our local, they’re either Bernie Sanders or Trump supporters.” Mr. Witte was in attendance on Friday when Mr. Sanders addressed members of his union, the United Steelworkers, who were protesting the Carrier layoffs.
Mr. Witte was in attendance on Friday when Mr. Sanders addressed members of his union, the United Steelworkers, who had turned out to protest the layoffs at Carrier.
Even as Mr. Sanders delivered a stem-winding speech about the cost of trade deals, many union members in the crowd who did not work for Carrier said they were personally doing fine.Even as Mr. Sanders delivered a stem-winding speech about the cost of trade deals, many union members in the crowd who did not work for Carrier said they were personally doing fine.
Mr. Witte’s plant, owned by Dana Holding Corporation, plans to grow to 900 hourly workers from 535 in the next few years, according to Tom Herendeen, president of the United Steelworkers Local 903, who also attended the rally. “We’re doing great,” he said. “We have a lot of new business coming in.”Mr. Witte’s plant, owned by Dana Holding Corporation, plans to grow to 900 hourly workers from 535 in the next few years, according to Tom Herendeen, president of the United Steelworkers Local 903, who also attended the rally. “We’re doing great,” he said. “We have a lot of new business coming in.”
Carrier’s decision to lay off 2,100 workers at two factories gained national attention in February when a video of an executive icily delivering the news to workers generated more 3.5 million views.Carrier’s decision to lay off 2,100 workers at two factories gained national attention in February when a video of an executive icily delivering the news to workers generated more 3.5 million views.
Mr. Trump took to criticizing the company at rallies and threatening high tariffs on products brought back to the United States that he promised would force Carrier to reverse itself. “They’re going to call me and say, ‘Mr. President, Carrier has decided to stay in Indiana,’” he told the crowd. Mr. Trump took to criticizing the company and threatening high tariffs that he promised would force Carrier to reverse itself. “They’re going to call me and say, ‘Mr. President, Carrier has decided to stay in Indiana,’” he told the crowd.
His protectionist policies, which go against decades of Republican orthodoxy, have brought the issue of trade and its potential costs to workers to the fore of the presidential race. Hillary Clinton has backed off her earlier support of the Trans-Pacific Partnership deal, and during a visit here she vowed to take on China for dumping steel.His protectionist policies, which go against decades of Republican orthodoxy, have brought the issue of trade and its potential costs to workers to the fore of the presidential race. Hillary Clinton has backed off her earlier support of the Trans-Pacific Partnership deal, and during a visit here she vowed to take on China for dumping steel.
Because the loss of manufacturing jobs has many factors and predates the latest international trade deals and the rise of China, economists say that steep new tariffs, such as those promised by Mr. Trump, will not restore jobs.Because the loss of manufacturing jobs has many factors and predates the latest international trade deals and the rise of China, economists say that steep new tariffs, such as those promised by Mr. Trump, will not restore jobs.
Mr. Hicks, the Ball State economist, predicted that Indiana will have 125,000 new manufacturing jobs each year in the next decade. “By way of comparison,” he wrote in a blog post, “we will only have 70,000 high school graduates per year.” Mr. Hicks, the Ball State economist, predicted that Indiana will have 125,000 new openings in manufacturing jobs, in part because of retirements, each year in the next decade. “By way of comparison,” he wrote in a blog post, “we will only have 70,000 high school graduates per year.”