An Inconvenient Truth (Fort Wayne, South Bend, Columbus: sale, homes, job market)

[spaulley]

An article in the South Bend Tribune business section several months ago stated that about 13%, or only about one out of every eight, of all local jobs is in manufacturing. In the past fifty years, our area’s economic axis has tilted away from industry and has embraced an economy which is dominated by service sector jobs. See "Primer on the Perpetuation of Power" thread on this forum for a detailed perspective.

The change from a manufacturing economy to a service economy has not come without cost. The resulting decline of the middle class has paralleled disappearance in middle income jobs – and a decline in the skills requirements to maintain those jobs. Growth in low-end jobs requiring limited skills sets has decreased the demand for training beyond a secondary level. In fact, 70% of the jobs available in the future will not require a 4-year degree. If anyone seeks to understand the skyrocketing local school drop-out rate, they need look no further than to our changed community economy.

The real cost is coming in skills drain. Hundreds of young people graduating from Ivy Tech and other local technical schools find an anemic industrial job market and the depressed wages that accompany job scarcity. Rather than re-tool their skills, and to preserve their standard of living, many young people are moving to other states to seek healthy industrial communities.

At the opposite end of the age demographic, seniors and others on fixed incomes, not able to carry the burden of growing property taxes, are electing to move to more tax-friendly states. Our politicians are whining and moaning that a property tax 2% “circuit breaker” to take effect in 2008 on the basis that such a cap will produce sizeable budget shortfalls. Such phony baloney is the height of disingenuousness. It is more than reasonable to believe that the ongoing sale of significant parts of Indiana’s infrastructure plus bureaucratic gaming of Circuit Breaker should offset any budgetary shortfalls. If California can cap property tax at 1%, then why do Hoosiers have to endure a cap double this level ? Our bureaucrats want us to believe that the problem is one of tax revenues being too meager, when the real problem is runaway overspending of revenues that have been more than reasonable.

The conventional wisdom of our politicians is that large tax cuts at the Federal level have left taxpayers flush with cash. Federal tax cuts, therefore, have invited states and municipalities to relieve taxpayers of their excess cash through rising taxes. Indiana politicians have failed miserably at attracting new industry and the new jobs arriving enterprises would bring, but yet they want to be rewarded with higher tax revenues.

While poor performance in bringing new industry is forcing our youth to move to secure livelihoods, our seniors can no longer afford to stay in the homes they have occupied while raising their families. Notice that people of all ages will make less-than-desirable choices in order to preserve their standards of living. Meanwhile, all Michiana residents have front-row seats to demographic sculpting.

[MichianaMan]

Your point about seniors is on target.

Two years ago, Indiana was forced by its State Supreme Court to go to a market value based property tax. Property taxes have been going up ever since. When prospective residents learn that property taxes are punishing, I'm afraid that many of them will elect to move elsewhere.

Indiana bureaucrats believe that we can tax ourselves into prosperity and enact tax laws accordingly.

[belovenow]

Here's a potential strategy for Fort Wayne Indiana --> instead of spending a fortune on ridiculously expensive initiatives such as a 500 million dollar city school overhaul, and tens of millions more on a new ballpark and market complex which no one wants, why not seriously invest our tax money on wooing mid-sized to large corporations to set up HQ's here. Offer them tax breaks, zoning allowances and discounts on utilities in return for retaining hundreds or thousands of local-based skilled labor positions. Spend additional money to likewise attract air carriers which fly to and from new destinations to Fort Wayne so that we're more of a hub and thus more attractive to new companies.

It seems to logical to me that what this area needs is good paying middle income jobs. In fact those would be the glue to hold this place together. If Manufacturers aren't willing to move into the area, how about companies from other industries such as Medical, Pharma, Biotech, Financial Services, or A&D. There's countless opportunities available and I question why when a small town in the middle of nowhere like Warsaw Indiana can be set up as the Medical Device capital of the world, that Fort Wayne just 50 minutes east and 5 times the size cannot do something similar.

[ShadowCaver]

mbuszu - you are asking and pointing out some very good thoughts. I too wonder why all the momentum for this ballpark by some city leaders, why FtW evidently has trouble attracting some industry, and why is it almost more economical to drive to the other side of Indy than flying out of our own airport. There is much positives here: a fairly centralized location, w/in few hours to many good sized markets [Indy, Chi-town, Detroit, Cincinnati, Columbus, etc.], a good workforce, a fairly good infrastructure, etc. I think that the city is trying, what w/ some new people in special positions. Yet, remember, they are trying to revamp themselves and also attract other/new corporations - just as a multitude of other similar sized cities across the country. While very good ideas and bait, remember that doing the tax breaks, zoning allowances, etc. are similar tactics that others are doing too - FtW must make itself stand out as special in other ways too. Takes leadership, foresight, luck, long-term thinking, and optimistic people.