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Sunday, March 25th, 2007

The Indiana Commerce Connector and Illiana Expressway Aftermath

Have you ever wondered by some places boom and other places stagnate? What makes one place hot, the next not? Sometimes it seems rather arbitrary. Consider the collar counties of Indianapolis. Hamilton, Hendricks, Johnson, Boone, and Hancock are all booming areas. Distribution and other industries set up shop in shiny new industrial parks alone the interstates radiating out from I-465. Housing and retail developments spout. Etc.

But conspicuously not in the growth picture are Shelby County, and to a lesser extent Morgan County. Shelby County is the clear anomaly here. It is located in a growing metro region but has a profile much closer to a traditional stagnant rural county. Little industry has located there. This despite having the best interstate access of any of the collar counties. I-74 cuts through the length of the county diagonally and there are seven interchanges in Shelby County. There is also an I-65 interchange in southwestern Shelby County. Yet there has been little development. One thing Gov. Daniels failed to do in trying to sell his Indiana Commerce Connector plan was to explain why if the existing interstate wasn’t doing anything for Shelby County, another one would.

People talk about infrastructure as a catalyst for growth. And indeed it is a necessary factor. But not a sufficient one. Obviously something is lacking in Shelby County. What could it be? One thing I can’t help but notice is that Shelby County was a hotbed of anti-ICC activism. A capacity crowd of 1,500 attended a recent meeting on the road – a huge turnout in a county with only 44,000 people in it. Morgan County was the site of other huge rallies against the road.

It occurs to me that perhaps the reason Shelby County hasn’t seen economic development is simply that the people of the county don’t want it. Their values and opinions are not consistent with economic growth. That sounds like a put-down, but it isn’t. Growth isn’t necessarily progress. A preference for growth and change are merely values that people hold. There is nothing inherently right about them. As Americans we typically see these as positives, but that’s pretty much a matter of opinion.

The challenge is to reconcile a desire for things not to change with a desire for the good things in life, such as access to modern technology, and good jobs for your children. A friend of mine recently went to a corporate brainstorming session on how to improve employee loyalty. The top three items that the group agreed needed attention were pay, work-life balance, and advancement opportunities. My friend and I had a good laugh at that. When someone invents a high paying job with lots of upside where you don’t have to work very hard, send me an application. Similarly, people in vast tracts of Indiana expect to be able to maintain their traditional way of life, but still have the modern economy, the government, etc. to treat them to all the good things of today. But it just doesn’t work that way. There are always tradeoffs. And what that has meant in anti-change Indiana is a state where a good chunk of the real estate is bleeding population and jobs. Farmers don’t want anyone messing with their land – or their gigantic subsidies paid for by urbanites of course – and expect that they can just make the whole world stop to match their way of life.

The citizens of Shelby County are free to reject the Indiana Commerce Connector. It is their choice. And indeed they’ve made it. But they need to understand that other people can make choices too. And those choices often involve locating businesses in more progressive communities, moving factories to China, or just plain leaving town for good after high school graduation. There’s a price to be paid for maintaining these traditional ways. The people of Shelby County might find that price worth paying, but I hope they are making these decisions with their eyes open.

As an Urbanophile perhaps it is easy to lecture rural people. I should point out that I grew up in a rural area, on a country road four miles outside a town of 29 people. I still love the country. And I should also point out that the same is true of cities too. I asked why Birmingham stagnated while Atlanta became the capital of the New South. It similarly comes down to choices people make. A lot of the cities I cover here talk a good game of wanting to be world class. But all too often their decision making doesn’t line up with that lofty rhetoric. There are tradeoffs in cities just like in rural areas. When the vast bulk of what these cities do isn’t in fact world class, then they can’t expect that the sum product at the end will be world class. It is that simple.

Atlanta is a case in point. It’s easy to say, well, Atlanta was in the south and centrally located. Their emergence as a major city was as much good fortune as anything. Part of that is true. But Wall Street is always able to spin a plausible tale about why the market did what it did that day which made it sound inevitable too. But we all know predicting that market in advance is a much harder affair.

The brass ring is still there to be grabbed. There is room to be had in the club of major cities. Any of the cities I cover here has the potential to stand up and be counted among their number. No, none of these cities will be a Boston or LA. But they could find their own type of greatness, just as Atlanta has. To do it those requires making those tradeoffs. Lots of people think Atlanta, with its notorious, though over-rated, gridlock, is the ultimate horror show of out of control sprawl. But that’s one of the tradeoffs they had to make to get where they wanted to go. To think that any city can get there without some pain and sacrifice is not realistic. These cities might decide, like Shelby County, that it’s a price they aren’t willing to pay. That’s ok. But these decisions should be made consciously, not be default, with an awareness of what is being decided. Unfortunately, that seldom seems to be the case.

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6 Comments
Topics: Economic Development, Strategic Planning, Talent Attraction, Transportation, Urban Culture
Cities: Indianapolis

6 Responses to “The Indiana Commerce Connector and Illiana Expressway Aftermath”

Tom in Morristown says:

March 30, 2007 at 1:01 pm

As a resident of Shelby County, I can offer some perspective on your comments. I do think most of our residents value the rural character of the county. Certainly the well-orchestrated opposition to ICC is evidence of that, but there has also been a very spirited local discussion about balancing the rural/small town lifestyle with the need for economic growth. We clearly don’t want to become a suburb of Indianapolis. We’ve seen what unchecked growth can do to the character of a county, as in Hancock to north, where Greenfield is poised to become the new Carmel. Shelby County floated a land-use plan a few years ago that designated both “economic growth” districts and “agricultural” zones where a 20-acre rule would apply (one could not subdivide less than 20 acres). The plan met with resistance because, just as farmers don’t want the state taking land by eminent domain to build a highway, they also don’t want govt. telling them they can’t subdivide their land. So the debate continues. I would disagree with your assertion that Shelby is a “stagnant rural county.” I guess if you don’t value agriculture as an economic engine, you might think farming isn’t worth much. On the other hand, the county has actually done a pretty good job of attracting business (Knauf Fiberglass and Hoosier Downs near Shelbyville and Bunge North America in Morristown). The eastbound commuting traffic from Indy along Brookville Road has noticeably increased in recent years. Unfortunately, we just lost over 200 jobs when Collins & Aikman in Morristown shut down due to bankruptcy. So please don’t dismiss us as a bunch of bumpkins who haven’t heard of indoor plumbing. Come seek some solace in Shelby County when the city starts to burn.
The Urbanophile says:

March 30, 2007 at 7:34 pm

Tom, thanks so much for the thoughful reply, and for the update on Shelby County planning and its economy.

I hope Shelby County is able to chart a path that will make its residents happy. Honda should help in luring some industry to Shelbyville. We’ll just have to see how it evolves.
The Urbanophile says:

March 31, 2007 at 2:48 pm

Here’s a followup. Today’s Indy Star had an article talking about how Indiana ranked 2nd worst in the nation behind Ohio in the number of job losses last year.

http://www.indystar.com/apps/pbcs.dll/article?AID=/20070331/BUSINESS/703310442

An IU economist blames a lack of willingness to change as one reason. “Our economy is a dinosaur. It’s based on manufacturing, and a lot of Hoosiers refuse to recognize the fact that we have to modernize” says Philip Powell. Professor Bill Witte says, “Indiana is a state that likes to do things the way they’ve always been done … Pursuing the status quo is not going to change the trends.”
tom in morristown says:

April 2, 2007 at 9:46 am

You are absolutely right about the dismal jobs picture (3/31 follow up post). Many Indiana residents have paid the price for not pursuing education. Yet I think the academic whom you quoted is oversimplifying the situation. Even if more manufacturing workers had skilled up over the past 20 years in anticipation of eventual job loss, where would they go to find comparable wages? The economics of work in today’s environment, even for someone with a 2-year degree from Ivy Tech, can be pretty grim. It goes without saying that a 4-year degree gives you more options, so long as you are prepared to manage $40-50,000 worth of student loan debt when you graduate. I heard a conversation recently with an economist who predicts that even many high-end jobs in the service sector–jobs that require good cognitive, problem-solving skills and a web connection–will move off-shore to cheaper labor markets, just as manufacturing has done. He mentioned, for instance, that your MRI performed at Clarian might be analyzed by somebody in Calcutta.
The Urbanophile says:

April 2, 2007 at 8:09 pm

Tom, that’s a great post. I work in an industry that has been in the forefront of offshoring white collar work – including very high skill work.

I think with white collar jobs we’re about where manufacturing was in 1983 or so. I remember the Volcker recession of 81-82 where the Fed jacked rates through the roof to crush the inflation of the 70’s. Manufacturing was hit hard, but bounced back a bit near the end of Reagan’s first term. But that was only a brief reprieve as we’ve seen what is close to a three decade trend of shipping manufacturing offshore. I think a similar journey is ahead for skilled white collar labor. We’re not at the beginning of the end as they say, but at the end of the beginning. The 2001 tech crash was just the 1982 recession for white collar workers.

I’ve read that there is a resurgence in demand for skilled trades, which can’t easily be shipped overseas. The problem is that for a lot of even skilled labor, a vast influx of immigrants is depressing wages. I guess if you can’t send the factory to a foreign country, send the foreign workers to the factory. Now I happen to be a fan of immigration, but you’d have to be crazy to say that this huge wave we’ve experienced hasn’t really hit entry level domestic labor hard. Maybe something like nursing would be a better bet?

Who knows what the future holds, but it is easy to see why people are so apprehensive about it.
Tom in Morristown says:

April 3, 2007 at 10:58 am

You probably saw the Star’s lead editorial this a. m. calling for “a fresh sense of urgency” in combating job loss. They managed to trot out another academic who branded Indiana’s manufacturing-based economy as a dinosaur (like it’s news to anybody who’s paying attention). Yet it’s a strong dinosaur, accounting for a third of the state’s gross product, even if it uses fewer workers to do it. A couple of manufacturing clusters in Indiana are still pretty healthy (industrial coating and metal grinding, for example). I like these because they are quite forgiving to workers who have few skills and major barriers to employment (school dropouts and ex-offenders). I call these firms “second chance” employers. The work only pays $8-$9/hr. but it beats living in a mission or a jail cell if you are willing to do it.

You’re right about skilled trades. There’s high demand for people who can build a door jamb or calibrate precision machinery. I have long advocated for skilled apprenticeships as viable alternatives to college for young people who think they would like to work with their hands as well as their brains. A journeyman electrician can earn as much as any college graduate with a liberal arts degree.

It goes without saying that immigration is a pretty complex issue (unless you’re a nativist, in which case it’s mostly about how many can we deport and how quickly can we get it done). Current immigration policy is terrible and isn’t structured to deal with the economic realities you mention. I thought the President’s guest worker proposal a few years back was pretty reasonable and a place to start but he couldn’t even get his own party’s support for a bill. You said you thought immigration was hitting domestic labor pretty hard, and that may be, but you can’t blame the local hotelier who hires Guatemalans and Mexicans because the locals won’t work for $7/hr. This is a huge problem. When it comes to work, I fear we’ve created a culture of entitlement, especially among the young. Perhaps we’ve done this to ourselves. Every generation wants something better for their children, which is honorable, but maybe we Americans at the dawn of the 21st century need to think differently about what that “something better” really means beyond the consumer lifestyle.

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