Why Mike Pence Doesn't Deserve Much Credit for Indiana's Economic Performance

By Bryce Covert, ThinkProgress

21 July 16

s Republican vice presidential nominee Mike Pence took the stage on Wednesday night, he took some time to tout his economic record during his tenure as governor of Indiana.

“In my home state of Indiana, we prove every day that you can build a growing economy on balanced budgets, low taxes, even while making record investments in education and roads and health care,” he told the cheering audience. “Indiana is a state that works because conservative principles work every time you put them into practice.” He went on to list tax cuts, a growing state labor force, and the creation of “nearly 150,000 new jobs” as evidence of this claim. “That’s what you can do with common sense Republican leadership,” he said.

But he can’t take much credit for the health of his own state’s economy.

Share of Hoosiers working

Indiana’s labor force — those who are either working or actively looking for a job — has grown by 186,527 people during Pence’s time in office. But that may be a reflection of a growing population as much as growing employment opportunities. The state’s population has increased by nearly 9 percent between 2000 and 2015. With population taken into account, a bigger percentage of state residents were working in 2000 than in 2016. Meanwhile, 41 states and Washington, D.C. have also seen increased their labor forces since 2013, with six and Washington, D.C. outpacing Indiana.

Unemployment rate

A better measure of the health of the job market might be the unemployment rate. And the rate has dropped under Pence’s tenure. But it was already on a downward trajectory when he took office: It had fallen from a recession peak of 10.9 percent to 8.4 percent in January 2013. Meanwhile, the state’s rate has mostly just followed the national average without performing significantly better. The state’s unemployment rate fell 3.4 percentage points between January 2013 and May 2016, about the same as the 3.3 percentage point drop across the country.

Job growth

Indiana has added 147,800 jobs between when Pence took office in January 2013 until May 2016. But that performance isn’t particularly exceptional. According to FactCheck.org, 18 other states added more jobs than that during the same time. That includes many larger states, such as California, but also smaller ones like South Carolina.

Pence particularly touted a supposed drop in his state’s government employees, but that doesn’t seem to match the data, which shows the number of state employees has increased since 2013. Meanwhile, the job gains look less impressive without public sector jobs. When looking at just the private sector, Indiana’s job growth rate lagged behind 20 states and Washington, D.C., according to FactCheck.

Hunger

An economy’s health is about more than just who has a job and who doesn’t, however. It’s also about whether people are able to make ends meet and afford the basic necessities. The Department of Agriculture found that between 2012 and 2014, nearly 15 percent of Hoosiers experienced food insecurity at some point in a given year, meaning they can’t get adequate food due to lack of money. That represented a 1.4 percentage point increase over the previous three-year period at a time when the country on average was seeing a decline, as well as a 4.5 percentage point increase from a decade ago. Yet Pence decided to reinstate a work requirement for food stamps that kicked tens of thousands of people off the rolls in 2015.

Tax cuts

Pence has boasted about the tax cuts he oversaw, and Trump himself bragged that Pence had “enacted the largest income tax cut in the state’s history” when he introduced him as his running mate. But that is not actually saying much. During Pence’s tenure, Indiana’s income tax rate was reduced from 3.4 percent to 3.3 percent beginning in 2015, and it will drop again to 3.23 percent at the beginning of 2017. That’s the largest cut because it is one of just two income tax cuts in the state’s history, according to an economist who has studied the state’s tax policy for 30 years. The other cut was a 0.1 percentage point reduction in the 1970s.

Conservative miracles?

By all of these measures, Indiana’s economy has not sunk under Pence, even if it hasn’t significantly outpaced the national trends. But Pence also claimed that “conservative principles work every time you put them into practice.” And while his record-setting income tax break may not have been terribly big, other Republican governors have put conservative principles to work with huge tax cuts and reaped the rewards of budget crises and economic shocks.

After Kansas Gov. Sam Brownback (R) passed a package of tax cuts in 2012 and 2013, the budget has stayed on the verge of deficit, lawmakers have had to slash spending on education and anti-poverty programs, its credit rating has been downgraded, and job growth has been slow. Former Louisiana Gov. Bobby Jindal (R) instituted tax cuts that have thrown his state into a budget crisis that is endangering basic services like hospitals and child protection agencies. Wisconsin Gov. Scott Walker (R) cut taxes by more than $4.7 billion, yet the state’s job growth has lagged behind the neighboring state of Minnesota and poverty has risen. Meanwhile, the tax cuts have been far more costly than originally thought and led to a huge budget deficit.