I live and work in the Midwest, which remains locked in a half-century doldrum of population stagnation, locally concentrated job losses and decay. In many ways, the Rust Belt is emblematic of the lack of focus on value to residents. Indiana is the perfect example, since no state in the Rust Belt has cut taxes as aggressively as this one. A decade ago, local property tax caps were added to the Constitution, limiting local spending. Then corporate taxes were cut, and income taxes cut. All of this was done with the hopes of boosting population and economic growth.
That didn’t happen. Indiana’s economic recovery from the Great Recession was no more than lackluster, and the clearest result of the rush to cut taxes was to make Indiana a magnet for low-wage employers. The state’s per-capita income dropped to 86% of that of the nation as a whole, down from near 90% in 2012. Half of all job growth went to adult workers without a high school diploma.
The lesson here is that selling your state on price instead of value is likely to draw bargain shoppers. These businesses will view the workforce as a commodity. That is a poor harbinger for the future.
MarketWatch
