Phil Powell, associate dean of academic programs at the Indiana University Kelley School of Business and academic director of the Indiana Business Research Center, delivers a speech on the state of the national economy and Johnson County’s economy during Aspire Johnson County’s economic outlook event Thursday.
Emily Ketterer | Daily Journal
Data shows Johnson County’s economy has a good foundation, but the amount of high-paying jobs is still lacking, compared to the rest of the state.
Wages, though, are not necessarily a problem for Johnson County’s growth, said Phil Powell, associate dean of academic programs at the Indiana University Kelley School of Business in Indianapolis and academic director of the Indiana Business Research Center.
Powell delivered a speech on Johnson County’s economic state and outlook during Aspire Johnson County’s annual economic outlook event Thursday. Powell has expertise in business strategy, economic policy and economic development in emerging industries.
He overall said Johnson County’s economy is in a great place in terms of its foundation, unemployment, wage inequality and population. He added he was impressed by the state of the economy.
The county’s unemployment rate remains low at 2.3%, and is lower than the state’s average at 2.8%.
As for wages, the county saw an increase in the average weekly wage by 9% in the last year, so pay is keeping up with inflation. However, the weekly wage for a Johnson County worker is significantly behind the rest of the state, Powell said.
Johnson County’s average weekly take-home pay is $858, while the statewide average is $1,100. In Hamilton County, the average weekly wage is $1,300. Statewide, Hoosiers overall have seen a rough increase in wages in the last year by 14%, Powell said.
“I’m not telling you anything you don’t already know … the jobs that you have in Johnson County pay lower,” Powell said.
He does not necessarily see that as detrimental to Johnson County’s growth, and it depends on which areas the county and its businesses focus on the most.
“The thing about Johnson County is your growth is not driven by the highest paying jobs,” Powell said. “Now, is this fundamentally a problem? I don’t think so.”
He still sees the economic foundation as strong for a number of factors. The county continues to have strong employment growth in the 19th percentile nationally, it also has a growing population of young people — which attracts businesses — and the county also has a very low poverty rate in the 4th percentile.
A third of the workers in Johnson County additionally have a bachelor’s degree, which Powell said is “phenomenal.” The amount of new patents in the county is high, and 26% of the economy is a traded industry.
“Bottom line, you’re at the top of your class as a county,” Powell said.
Powell acknowledged there is a “real divergence” between residents who live and work in Johnson County and residents who live in the county, but work somewhere else. That is normal when next to a large metropolitan area. He said that is important to understand when coming up with an economic development strategy.
“What drives prosperity in a region? In a county? … It’s the industry you excel at. What brings people in from outside the county?” Powell said.
He said he wanted to get “wheels turning” in the county and Aspire to have more dialogue in economic strategy on where to double down, and how much weight they want to put in the residents versus businesses.
“It’s important to pick where you’re going to make your investments. In terms of is it going to be placemaking? Is it going to be generating a better environment to recruit more businesses?” Powell said.
Powell and a panel at the event additionally discussed more general nationwide economic trends, such as inflation, employment shortage and the state of the housing market.
Powell, while speaking on inflation, predicted to see it lower in the next year, with a mild recession.
“I think we’ve gotten through the worst of inflation … we hear the term about 8% inflation, that’s just in terms of fuel and food. When you talk about core inflation, it’s more like 6%, and that’s going to come down two or three points slowly over the next year,” Powell said.
He described 2023 as becoming a “sobering up” year for the economy in the post-pandemic.
“What we’re experiencing here is the economy finally catching its breath into a new normal post COVID, after everybody spent their money and got their party,” Powell said.
On the labor shortage, Powell and three other panelists emphasized changing workplace culture to keep employees. Powell pointed out that unemployment is low, so there just are not workers for the jobs available.
“If you’re a business person, you need to come to grips with how you increase retention, and not take your workers for granted,” Powell said. “It’s the biggest challenge you face, and you need to get creative. “
One of the panelists, Alexis Sowder, director of client services at KSM Location Advisors, said supervisors need to listen to their employees and what they want in terms of benefits to working at their company. Not listening is how employers get the “quiet quitters,” who are looking for a different quality of life beyond the grind of work, she said.
“If your supervisors or managers are doing a good job at learning who their workforce is, that’s going to retain,” Sowder said.
