Indiana gained statehood in 1861 but important events have shaped its political and cultural identity. One of these was the NorthWest Ordinance (1787). At the time, Indiana was not yet part of the United States, and the Northwest Ordinance, provided an ambiguous foundation for states that sought statehood. Until then, Indiana (as well as other surrounding states) were governed through territorial governorship. The Northwest Ordinance was significant for several reasons. First, the governor held absolute vetoing power. Second, the individual liberties were written and protected in an official document and lawfully recognized four years before the enactment of the federal Bill of Rights. The citizenry felt that the territorial governorship held too much power and this led to the creation of a state constitution, the first created in 1816 and the second (and present derivation), in 1851.
The 1816 Constitution finally granted Indiana statehood on December 11, 1816. Although the creation of the state constitution addressed some deficiencies present in the Northwest Ordinance and laid the foundation of a “general system of education” by compelling the General Assembly, Indian’s legislative branch to provide for the first time, many felt that the government held too much centralized power. Thus, in 1851, a second state constitution was created to specify civil liberties not expressed in the federal Constitution. Embodied in the state constitution are values of justice, order and freedom of religion. Contained within Article 1 (Bill of Rights) of the Indiana Constitution are seven articles on religious freedom alone, whereas the federal Constitution only mandates the separation of church and state.
Like the federal government, Indiana relies on its three branches of government to ensure that the state functions. The description of the executive, legislative and judicial branch are described below.
The executive branch consists of the governor and his team including the lieutenant governor, attorney general, auditor, secretary of state, treasurer and superintendent of public education. The Governor is mandated as chief executive for the state by the Indiana state constitution and derives power to ensure that the state is the ultimate arbiter of authority. In addition, the constitution provide the governor to: act as Commander-in-chief of the state’s military and naval forces, recommend legislation to the General Assembly (GA) and veto bills passed by the GA as well as fill judicial vacancies between election years. (Dickson 1996)
The legislative branch is referred to as the General Assembly. It consists of the Senate and House of Representatives. Indiana has nine congressional districts and is allotted two US senators to represent them, elected to 6-year terms. Indiana also has 50 state senators elected to a 4-year term. Its House of Representatives has 100 members, elected to 2-year terms. Their main function is to legislate and enact new laws.
Lastly, the judicial branch provides a forum to address grievances and to obtain fairness under the existing laws. Indiana’s court system consists of trial and appellate courts. Trial courts consist of circuit courts, superior courts and local city courts. They hear cases for the first time. Appellate courts are higher courts when either party appeals the decision and may review the lower courts decision. The appellate courts consist of The Supreme Court of Indiana, The Indiana Tax court and The Court of Appeals.
Situated in the Midwest, Indiana has long held a reputation for being a conservative state but has supported democratic candidates five times since 1900.
According to the latest US Census Bureau, Indiana had a population of nearly 6.571 million inhabitants. In order to provide essential services to businesses and residents alike, the local government provides these services. The local government derives its administrative power from Article 6 of the Indiana state constitution. These powers allow for the creation of administrative officers to provide services such as fire protection, solid waste management, police protection and parks and recreation services. Indiana has a total of 2,355 local units of government covering 584 municipalities. Among the largest local government units in Indiana, are its 92 county government units, 1008 township government units and the 584 city government units.
Analysis of state-local relations
The state-local relations provide an interesting dynamic and interplay of power and authority. In times of a slowing economy, the state decides the funding but the provisional goods and services are distributed through local government. Furthermore, it is the local government that has a closer connection to residents in communities that are first impacted on reduction of services.
According to a 2012 IACIR Survey, the Indiana local government finds itself confined by: economic issues, fiscal challenges and decrease of local government contributions.
Economic issues are often the first to impact the citizenry. Dissatisfaction with the current economic situation may result in a drastic change of parties or a call for new leadership at election time. The survey cited particular economic issues that local government had to contend with. These included “the cost of health insurance, obesity, drug issues, abandoned properties and roadways.” (Intergovernmental Issues in Indiana: 8 )
Secondly, the state may issue less funding to local governments if tax revenues have declined especially if there is a high unemployment rate and a tough economy. The local governments address these fiscal challenges in a variety of ways: reduction in the number of employees or hours, hiring freeze, layoffs, delayed capital expenditures and reduced spending on streets. This may mean a cutback in construction that may otherwise provide jobs and investment would otherwise be delayed. The local government still has to provide services that are essential to the operations of the state. On a related note, the contributions to retirement fund or pension may be reduced in times of a hard economy, and possibly mean asking employees to bear the cost of benefits. For some, this may mean the reduction of insurance coverage.
Lastly, the current technology has made it possible to communicate with residents and businesses alike by relying on internet-based electronic communications. Doing so facilitates transparency and streamlines the process of government interactions, especially when handling tax or revenue based transactions.
Summary table reflecting key economic statistics.
Policy Analysis: Provide Assistance to the Working Poor
The topic I have chosen is “Provide Assistance to the Working Poor.” This is an important issue for the state of Indiana as well as for the nation due to a weakened economy that is trying to heal since the “Great Recession.” Issues of wage stagnation and lack of social mobility have been issues and have been talking points by both sides of the political spectrum. For individuals with no children and are the “working poor” the government doesn’t have tools readily available to help its citizens.
It is important to see how states have fared with this policy issue and whether initiatives taken by the business, private and government sector have worsened or benefited the average Hoosier. It is after all the wealth, opportunity that this nation provided to attract talented individuals and entrepreneurs to this nation. The narrative of the “streets paved with gold” seems contradictory to the working poor who work hard to provide for their families.
According to a UC Berkeley report, , there are 43,000 fast-food workers employed in Indiana and 45% of the workers or nearly 20,000 fast-food workers rely on some form of public assistance, such as Medicaid, food stamps and Earned Income Tax Credits.
The working poor have limited resources at their disposal and often have to balance responsibilities such as child-care, healthcare, food and housing. Furthermore, there are 182,000 Indiana residents that have fallen into a health insurance coverage “gap” because of the lack of Medicaid expansion coverage and have made Indiana “not a good state to be poor, or out of work, or uninsured.” (Associated Press: 2013) Workers often have to make hard choices as to whether to do without food, gas or healthcare. Often, it’s the latter.
Currently, Indiana’s minimum wage is tied to the federal minimum wage, set at 7.25/hour. A worker employed full-time making minimum wage would earn just $15,080.00 a year. A family of two making below $15,510 falls under the poverty guidelines. (Status of Working Families in India: 2013). The prevalence of the fast-food industry in Indiana makes this state the fifth highest concentration of jobs in this occupation.
Available choices to tackle the working poor in Indiana are few and grim. There are several restraints when it comes to alleviating the working poor that are unique to Indiana. These include economic, structural and political reforms.
Economic alternatives to bring genuine relief to working poor include: increase of the minimum wage, providing financial aid to part-time attendees at postsecondary institutions. Structural reforms would entail adjusting the earned income tax credit that brings relief to eligible recipients once a year and provides a tax break of 9%.
Indiana’s regressive tax system unfairly punishes the working poor by implementing a uniform tax rate that unfairly takes a larger percentage of income from those making the least. Indiana is one of fifteen states that taxes below the federal poverty level ($22,350 for a family of four). Secondly, low-income individuals in Indiana are exposed to the “cliff effect” phenomenon. This discourages workers from making the transition to a higher paying job but fear doing so would mean the removal of their benefits without which they would not be able to subsist on just the wages alone.
Increasing the minimum wage would give greater purchasing power to workers and provide a higher level of dispensable income that would trickle down to other sector of Indiana’s economy, further stimulating for more goods and services. As of now, the working poor may have two or three jobs just to make ends meet. If the minimum wage were increased, perhaps being employed at one job would allow these workers to be economically sufficient. Some critics view an increase of the minimum wage as a negative cost that would drive businesses to lay off workers, move to other “business-friendly” states and that by providing workers with a living-wage, would incur higher costs and erode the bottom line.
Efforts to increase Indiana’s minimum wage from $7.25 to $10.10 have stalled. The passage of Senate Bill 213 has barred employers in their jurisdictions to provide benefits and wages that exceed the federal law. The outcome of the bill was strictly along party lines, by a vote of 65-29 with Republicans casting the votes against the increase.
How serious is the state about solving this issue?
The state has made some efforts to address the difficult job environment. It has attempted to tackle these challenges by investing in job-training at a cost of $29 million but is intently focused on “self-sufficiency” and its low corporate tax rate has created a “business-friendly” environment. As of fiscal year 2013, Indiana has dedicated only 1.5% of its budget towards public assistance and 27.3% towards Medicaid. In part, the lack of reform is due to the issue of being a “hidden” and invisible issue.
Evaluate: What’s working and what’s not? What could be done differently?
Implementing changes to alter the current economic, political and structural landscape of the working poor requires time and effort. The current strategy of incorporating workers into occupations that are low paying is not working. For a sizable segment of Indiana’s population who rely on public assistance to supplement their day-to-day needs
Part of the challenges holding back workers from tapping into higher paying jobs is the lack of postsecondary credentials. Given that 54% of jobs in Indiana are in middle-skill jobs that require more than a high school diploma, but less than a four year degree—but which only 47% of the workforce are equipped with the skills necessary in the twenty-first century. (Status of Working Families in Indiana: 23). For adults enrolled in postsecondary institution, they may require remedial courses that bearing and may exhaust the available financial aid provided. Furthermore, the prevalence of the fast food industry means that 28.5% of the low-wage workforce had some kind of postsecondary education indicates a mismatch of skills or lack of better job prospects. Secondly, the available roster of jobs in Indiana is such that 7 out of 10 jobs pay less than $45,000 and 28% of jobs are in occupations that pay below the poverty line.
Think-tanks have offered suggestions such as providing increased financial aid for part-time students to increase the postsecondary educational credentials of adults. Others have suggested incorporating a paid job-training program that will help individuals retain real skills that are in demand by employers. Having a talented and skilled workforce will allow workers to be paid a living wage in accordance with increased productivity in an economy that is increasingly becoming more specialized and knowledge-based. The negative aspect of these alternatives is the issue of time. Specifically, the time needed to plan, coordinate, implement these changes and this is something that the working poor does not have.
There are various agencies involved in resolving the issue of the working poor. Some of these include, Indiana Department of Workforce Development, Indiana Economic Development Corporation “Pro-Talent Initiative”, The Strategic Skills Initiative (SSI), Economic Development for a Growing Economy (EDGE). Federal legislation known as the Workforce Investment Act (WIA) have provided federal funds to states focused on providing training and job skills to bettering the general population. Indiana, had received $789,988 for its share of the program and to their credit have enrolled 438 students in their WorkINdiana program (through which this grant supports). Although its too soon to know whether this program is successful, 100 students have found employment. (Workforce Investment Act Annual Report,2011). However, the state of Indiana still has nearly 900,000 Hoosiers who would greatly benefit from this program.
Allegretto, S., Doussard, M., Graham-Squire, D., Jacobs, K., Thompson, D. and Thompson, J. (15 Oct, 2013). Fast Food, Poverty Wages: The Public Cost of Low-Wage Jobs in the Fast-Food Industry.” UC Berkeley Labor Center. Retrieved from: http://laborcenter.berkeley.edu/fast-food-poverty-wages-the-public-cost-of-low-wage-jobs-in-the-fast-food-industry/
Associated Press. (2013, Oct 20). Indiana working poor highlighted in pair of studies. Indiana Business Journal. Retrieved at: http://www.ibj.com/articles/44146-indiana-working-poor-highlighted-in-pair-of-studies
Constitution of the state of Indiana. Indiana University School of Law—Bloomington. Retrieved from http://www.law.indiana.edu/uslawdocs/inconst.html
Dickson, B.E. (8 Dec 1996) Indiana’s Constitutional Past by Justice Brent E. Dickson, Justice, Indiana Supreme Court. Symposium. In Indiana Historical Bureau. Retrieved from http://www.in.gov/history/2609.htm
Indiana State Budget. Ballotpedia. Retrieved at: http://ballotpedia.org/Indiana_state_budget
Indiana Minimum Wage 2013. Federal & State Minimum Wage rates, laws and resources. Retrieved at:http://Minimum-wage.org
Indiana Institute for Working Families. Status of Working Families in Indiana, 2012. (July 2013)
Retrieved from: http://www.incap.org/statusshare2012.html#.VE2geYf6Cyc
Indiana Special Interest Groups. VoteSmart. Retrieved at: http://votesmart.org/interest-groups/IN/#.VEvd9of6Cyc
Thomas, Derek. Poverty Jobs on the Rise in Indiana. (19 May, 2014). Indiana Institute for Working Families. Retrieved from http://iiwf.blogspot.com/2014/05/poverty-jobs-on-rise-in-indiana.html
Indiana. The Council of State Governments Knowledge Center. Retrieved from: http://knowledgecenter.csg.org/kc/system/files/indiana.pdf
Intergovernmental Issues in Indiana 2012 IACIR Survey. Center for Urban Policy and the Environment. July 2013. Retrieved from http://www.iacir.spea.iupui.edu/documents/Report2012_003.pdf
Bureau of Labor Statistics
Local Government Finances in Indiana. Purdue University. Department of Agricultural Economics. Retrieved from: http://www.agecon.purdue.edu/crd/localgov/Second%20Level%20pages/topic_localgov_overview.htm
Real Per Capita Personal Income in Indiana, FRED Economic Data. St. Louis Fed. Retrieved from (http://research.stlouisfed.org/fred2/series/INOI96
United States Bureau of Labor Statistics. (April 2013). A Profile of the Working Poor, 2011. Report 1041. Retrieved from: http://www.bls.gov/cps/cpswp2011.pdf
United States Census Bureau. Retrieved from http://quickfacts.census.gov/qfd/states/18000.html
Wright, Emily. 45 Percent of Indiana Fast Food Workers Receive Public Aid. (2013, Oct. 15). Indiana Public Media. Retrieved from: http://indianapublicmedia.org/news/nations-fast-food-workers-require-public-aid-57067/