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1 incontext s Workforce and Economy inside Is Ready to Be an Emerging Leader in the Biofuels Industry? Is Ready to Be an Emerging Leader in the Biofuels Industry? On the Road Again: How Hoosiers Get to Work Monthly Metrics: s Economic Indicators Regional Labor Force and Unemployment Rates I Did It My Way: Self-Employment on the Rise in The Southern Bank Deposit Market 8 9 The Kokomo-Peru CSA Locating Historical Census Publications Highest Recorded Fuel Prices in Selected Metros $. $. $. Gary $. Terre Haute $. $. $. $. polis $. Bloomington $. South Bend $. $. Fort Wayne You cannot go long in today s world without hearing conversations, sound bites, commercials or debates about the energy crisis, our dependence on foreign oil and the looming threat of global warming. But what does this mean for the Hoosier workforce? There is a steady stream of regular Figure : Energy Sector Expansions and Job Announcements, Iriquois Bio-Energy Ethanol plant () jobs Maize AgriProducts Inc. Ethanol plant (under construction) jobs Renewable Agricultural Energy Ethanol plant (8) jobs Morning Star Energy LLC Ethanol plant (8) jobs Vincennes Benton Cayuga Shelburn Jasper Clinton USA Biofuels Soybean processing plant (8) jobs Vieste LLC Ethanol plant (8/9) jobs Cargill-Demeter Ethanol plant (under construction) Jobs TBD Montgomery Clinton Tipton announcements concerning new ethanol, biodiesel and coal gasification plants sprouting up around the state. What do we know about these new technologies and the types of jobs that these developments will bring? Does the workforce have the skills and experience necessary to fill these positions? Claypool Wabash Morning Star Energy LLC Ethanol plant (8) jobs Lagrange Huntington Montpelier ASAlliances Biofuels LLC million gallon corn ethanol facility (TBD) Jobs TBD U.S. Ethanol New ethanol plant () - construction, permanent jobs Vectren Fuels Two new underground mines (9) local jobs Henry Portland Randolph Louis Dreyfus Agriculture Industries Biodiesel facility (TBD) 8 jobs NuFuels LLC Biofuel plant (TBD) jobs Central States Enterprises Inc. Ethanol plant (under construction) jobs Broin Companies Ethanol plant (TBD) jobs Cardinal Ethanol Ethanol plant (under construction) jobs ebiofuels LLC Biodiesel production facility () jobs $. Evansville-Henderson $. (IN only) Note: Current data as of February, Source: IBRC using AAA data Regular Unleaded Diesel Southern Gibson Mount Vernon TBD = To Be Determined Gibson County Coal LLC New underground mine (8/9) jobs CountryMark Co-op Diesel fuel plant (TBD) jobs Source: Research and Analysis Department, Department of Workforce Development Southwest Gasification LLC Coal gasification plant (), construction, permanent and mining jobs A State & University Partnership for Economic Development Department of Workforce Development Business Research Center, IU Kelley School of Business

2 In, there were 8 proposed ethanol, biodiesel and coal gasification projects (new and expansion sites) in (see Figure ). According to the Corn Marketing Council, at least ethanol plants alone have been proposed since. Controversy still surrounds many of these projects. The debate continues over which new technology will yield the greatest economic benefit with the highest energy efficiency and least damaging environmental impact. Yet if these projects are approved, all of them will be using new technology to access resources in the Hoosier Heartland, such as coal, animal waste, corn and soybeans. As a result of these expansions, thousands of new jobs have been announced, including occupations in advanced manufacturing, construction and extraction. These new plants will also require people to fill managerial and leadership positions. Some jobs will require advanced technology skills and could pay higher wages than manufacturing jobs of old. The projects are estimated to add more than, construction jobs (up to may be permanent) throughout the state. The average wage for construction/extraction occupations is $,8. Many of the permanent jobs will be in chemical manufacturing and mining. The average wage for employment in these related industries is slightly higher at $,9. Many of these occupations do not require postsecondary education; however, a moderate to long-term level of onthe-job training or previous work TABLE : JOBS AND EXPERIENCE REQUIRED IN THE CHEMICAL MANUFACTURING (BIOFUELS) AND MINING INDUSTRIES Job Title Education Needed Total Employment, Average Wage, Applicants (Southwest ) Skill Cluster* Chemical engineers Bachelor s degree $8, 8 Information General and operations managers Bachelor s degree or higher, plus work experience, $,, Systems Chemists Bachelor s degree,8 $,8 People Industrial production managers Bachelor s degree,8 $,88 People First-line supervisors/managers of mechanics, installers and repairers Work experience in a related occupation,8 $9, Things Industrial machinery mechanics Long-term on-the-job training, $, n/a Things First-line supervisors/managers of production and operating workers Separating, fi ltering, clarifying, precipitating, and still machine setters, operators, and tenders Work experience in a related occupation,8 $,, Things Moderate-term on-the-job training $, Things Mine cutting and channeling machine operators Work experience in a related occupation $9, Things Chemical plant and system operators Long-term on-the-job training, $,9 Systems Truck drivers, heavy and tractor-trailer Moderate-term on-the-job training 8, $,, Things Chemical technicians Associate degree, $, 8 Systems Electrical and electronic repair workers, commercial and industrial equipment Postsecondary vocational training, $,8 Systems Chemical equipment operators and tenders Moderate-term on-the-job training, $, Systems Maintenance and repair workers, general Long-term on-the-job training, $,89 8 Things Executive secretaries and administrative assistants Moderate-term on-the-job training, $,9, People Mixing and blending machine setters, operators, and tenders Moderate-term on-the-job training, $,89 8 Things Continuous mining machine operators Moderate-term on-the-job training $, Things Inspectors, testers, sorters, samplers and weighers Moderate-term on-the-job training 8,9 $9,8,8 Things Packaging and fi lling machine operators and tenders Short-term on-the-job training, $, n/a Things Shipping, receiving and traffi c clerks Short-term on-the-job training,9 $,,98 People Laborers and freight, stock, and material movers, hand Short-term on-the-job training, $,9, Things *These are the skills necessary for successful employment based on s research to develop new skill-based career clusters Note: This list accounts for percent of total employment in the chemical manufacturing (biofuels) and mining industries. The remaining employment is divided among another 8 occupations. Source: Research and Analysis Department, Department of Workforce Development incontext

3 experience may be required. The typical skills required by these jobs include equipment maintenance, equipment selection, installation, operation and control, operation monitoring, repairing, and troubleshooting. Table lists the types of jobs and the required education and skills. Where We Are s workforce has a strong historical precedent of a vibrant manufacturing industry. In the first quarter of, businesses in mining and related biofuel manufacturing industries employed an average of, workers statewide. However, contractions, company reorganizations and relocations in recent years have created a large pool of dislocated workers. According to mass layoff statistics for the mining, manufacturing, utilities and construction industries, a total of about, layoffs occurred at 8 establishments throughout the state dating back to. The highest concentration of these layoffs was located in southwest, with a total of, layoffs at establishments in economic growth regions (EGRs), 8, and. Fortunately, this is where several of the new developments will occur (see Figure ). Some of the announcements pledging to bring the greatest numbers of jobs are located in these southwest regions of the state. A major source of labor supply for the energy industry expansion will be supported by dislocated workers who predominantly come from construction, production and extraction occupations. These jobs typically require moderateto long-term on-the-job training. Only a few occupations require workers to have a bachelor s degree. This pool of workers has a substantial amount FIGURE : ENERGY SECTOR EMPLOYMENT AND ATTRACTION PROJECTS, : Employment -, Posey Gibson Vermillion Lake Newton Sullivan Benton Warren Vigo Knox Fountain Warrick Parke Pike Porter Jasper Clay Daviess White Tippecanoe Montgomery Greene Putnam Dubois Spencer La Porte Owen Martin Starke Region Region Pulaski Carroll Region Region Perry Clinton Boone Hendricks Morgan Johnson Shelby Monroe Lawrence Orange Crawford St. Joseph Marshall Fulton Cass Region 8 Marion Brown Miami Howard Tipton Hamilton Jackson Washington Harrison Elkhart Region Kosciusko Region Source: Research and Analysis Department, Department of Workforce Development Wabash Hancock Bartholomew Floyd Grant Madison Scott Jennings Clark Lagrange Noble Whitley Huntington Delaware Henry Rush Decatur Vanderburgh Blackford Region 9 Region Jefferson Wells Fayette Ripley Steuben De Kalb Region New Energy Sector Projects Expected Employment Growth Allen Adams Jay Randolph Region Wayne Franklin Union Dearborn Ohio Switzerland According to mass layoff statistics for the mining, manufacturing, utilities and construction industries, a total of, layoffs occurred at 8 establishments throughout the state (dating back to ). incontext

4 of work experience and their skills will transfer well to these new jobs in biofuels and other energy sector initiatives. Where We Are Headed In the southwest region of the state (EGRs, 8 and ) more than, job applicants from s Department of Workforce Development (DWD) job-matching system reported months or more of related experience in mining, construction and production occupations. The numbers of job applicants in each of the occupations specific to the biofuels and mining industries are listed in Table. Of those with more than one year of experience, the average level of experience is a little over seven years. More than, of these applicants report having attained some college, more than, report having a bachelor s degree, over, report having an associate s degree and approximately report having a postsecondary vocational degree. However, fewer applicants possess employment experience in occupations that emphasize managerial skills, information technology skills, and interpersonal skills, such as coordination, instructing, negotiation, persuasion, service orientation, social perceptiveness and time management. Training and education that targets these skill areas are needed to fully develop the potential of this emerging workforce. Assessment of applicants using WorkKeys or other skill-assessment tools (and providing additional training or retraining as appropriate) will prove valuable in preparing the available workforce for the specific tasks required for the new, high-tech jobs being created in the biofuels industry. Are We Ready? This initial glance results in a fair degree of confidence in s ability to fill many of the projected new jobs with a skilled and experienced workforce; nevertheless, there is room for opportunity and growth. In the st century economy, employers increasingly demand workers with advanced technology and computer skills. Although these energy-related expansions are heavy with jobs for the manufacturing, mining and construction industries, many of the added jobs will require new skill proficiencies. s Strategic Skills Initiative (SSI) identified skill shortages throughout the state in the following areas: critical thinking, complex problem solving, science, mathematics, reading comprehension and active (lifelong) learning. The SSI also pointed to shortage areas including advanced manufacturing and medical technology. Many national articles also emphasize shortage areas in science, engineering and technology, as America faces increased global competition. American (and ) workers at every skill level are in direct competition with workers throughout the world. and the United States can maintain a competitive advantage with increases in education and training that will lead to innovation and creativity. Conclusion The workforce is ready to fill many posts for the projected ethanol, biofuel and coal mining plants. Experienced workers and an emerging workforce with growing levels of educational attainment will ensure that remains a powerful hub of manufacturing (chemical and Experienced workers and an emerging workforce with growing levels of educational attainment will ensure that remains a powerful hub of manufacturing (chemical and otherwise), mining and construction. otherwise), mining and construction. WorkOne Centers will direct dislocated or underemployed workers to this expanding industry and, with increased focus on the educational and skill shortages that exist, will be well able to meet the challenge of this expanding, high-tech sector. Notes. Based on the staffing patterns of construction/extraction occupations in mining and biofuels related industries: number=&menu_level=smenu&panel_number=.. The Mass Layoff Statistics (MLS) program measures job losses or separations when an establishment s employees file at least initial claims for unemployment insurance during a consecutive five-week period. MLS does not track smaller industry cutbacks and often misses dislocated workers who are offered packages, or are let go over a period of time.. DWD CS System as of December.. National Center on Education and the Economy, the Commission on the Skills of the American Workforce, America s Choice: high skills or low wages! 99, available at Richard B. Freeman, Investing in the Best and Brightest: Increased Fellowship Support for American Scientists and Engineers, The Hamilton Project, December, available at The National Association of Manufacturers (NAM) Skill Gap Report.. WorkOne Centers are designed as one-stop shops, able to assist job seekers and the unemployed with a wide range of employment and training services. For more information, call -888-WORK-ONE or visit Allison Leeuw, Research and Analysis Department, Advanced Economic and Market Analysis Group, Department of Workforce Development incontext

5 On the Road Again: How Hoosiers Get to Work How much time does the average Hoosier spend on the road en route to his or her job? s average travel time to work is. minutes, give or take seconds, but the time it takes to get to work varies significantly depending on where exactly you live. This article uses American Community Survey (ACS) data to compare the drive-time habits for various parts of the state and nation. Note: Although references are made to driving, these data apply to all of the. million Hoosiers age and older who work outside their homes, regardless of whether they rode in a vehicle (the most common method by far), took public transportation, walked or bicycled. The Time It Takes s average travel time to work is. minutes, which is a few minutes shorter than the national average of. minutes. Double those numbers and you get the total time spent getting to and from work each day, minutes and. minutes, respectively. At first glance, a difference of five minutes Commuting by the Sexes Men and women have different commuting habits; below are a few highlights from the data for : Men are slightly more likely to carpool than women ( percent of men vs. 9 percent of women). Women are more likely to work in the county where they live ( percent of women vs. percent of men). They are also more likely to work in the city or town where they live ( percent of women vs. 9 percent of men). Men are more likely to leave the house before : a.m. ( percent of men vs. percent of women). Women are more likely to have commutes less than minutes ( percent of women vs. percent of men). seems fairly insignificant, but if you calculate it out, s shorter commute saves each worker about hours in travel time each year. So, while the typical American spends eight-and-a-half days getting to and from work in the course of a year, the average Hoosier spends roughly sevenand-a-half days in transit to his or her job. The ACS currently collects data for eight cities and 9 cities nationwide. In, Gary residents had the longest average travel time to work at minutes, while Bloomington residents had the shortest at. minutes (see Figure ). In fact, Bloomington had the shortest commute time of all 9 cities nationwide. Only two other places had average travel times under minutes: Champaign, Ill., and Wichita Falls, Tex. At the other end of the spectrum, three cities in California and one in Virginia had average travel times exceeding minutes. Located in the Riverside- San Bernardino area, Hesperia, Calif., FIGURE : AVERAGE TRAVEL TIME TO WORK BY CITY,. Minutes Bloomington Muncie Evansville South Bend Fort Wayne polis Hammond Gary incontext

6 topped the list with an average one-way commute time of. minutes. As seen in Figure, the average travel time to work for the counties covered by the ACS ranged from. minutes in Howard County (home to Kokomo) to. minutes in Morgan County (on the outskirts of the polis-carmel metro area). Nationwide, commute times ranged from minutes in Cascade County, Mont., to minutes in Richmond County, N.Y. The Shortest and Longest Commutes Figure takes a closer look at travel time, comparing to the nation. It takes. percent of Hoosier workers less than minutes to get to work, while half of the state s workers arrive at their job in less than minutes. On the other hand,. percent of workers have commutes of minutes or longer, with. percent traveling an hour or more. As seen in Figure, Elkhart and Floyd counties have the smallest percentage of workers traveling minutes or longer (. percent and. FIGURE : AVERAGE TRAVEL TIME TO WORK BY COUNTY, 9. LaPorte.8 Lake. Porter. Howard. Tippecanoe. Hamilton. Hendricks. Morgan. Vigo. Monroe 8. Vanderburgh minutes or more to minutes Less than minutes St. Joseph 9. Elkhart. Kosciusko 9. Bartholomew Allen. Grant 8. Delaware. Madison. Wayne. Marion. Johnson. 9. Clark. Floyd. It takes. percent of Hoosier workers less than minutes to get to work, while half of the state s workers arrive at their job in less than minutes. FIGURE : MINUTES OF TRAVEL TIME TO WORK BY PERCENT OF WORKERS, Percent of Workers 8% % % % % 8% %.%.%.%.%.%.%.%.%.%.%.%.% United States.%.%.%.%.%.9% % Less than or more Minutes incontext

7 percent, respectively), while Morgan and Lake counties have the highest percentages (8. percent and 8 percent, respectively). Moreover, one out of Lake County workers travel an hour or more to his or her job the highest percentage in the state, undoubtedly because many are employed in the Chicago metro. Leaving Home Figure compares the time Hoosiers leave home to go to work to the United States overall. Half of s workers leave home between : a.m. and 9 a.m. Almost percent of workers rise early and leave home to go to work before : a.m., while the remaining percent leave for work at 9 a.m. or later. Learn More Use American FactFinder from the U.S. Census Bureau to get more detail on these commuting characteristics for any geography covered by the ACS. Go to and select the get data link underneath the American Community Survey heading. Click the Enter a table number link and type S8 to bring up the commuting characteristics table. Use the sidebar links to view additional geographies or years. FIGURE : PERCENTAGE OF WORKERS TRAVELING MINUTES OR LONGER TO GET TO WORK, 8. Lake. Vigo. Porter. 9. La Porte Tippecanoe..8 Hendricks Marion 8..9 Morgan Johnson. Monroe.8 St. Joseph.9 Howard. Elkhart. Kosciusko.. Madison Hamilton Bartholomew. 9. Grant. Delaware. Allen. Wayne Notes. The number of days worked per year varies by employee. This calculation assumes a five-day workweek, two weeks of vacation and six annual holidays for a total of work days per year. Rachel Justis, Managing Editor, Business Research Center, Kelley School of Business, University Vanderburgh.. Clark Floyd. % or More % to.9% Less than % FIGURE : TIME LEAVING HOME TO GO TO WORK, % % United States.%.% Percent of Workers % % %.%.9%.%.%.%.% 9.% 9.%.%.%.8%.9%.%.% 8.%.8%.%.% % : a.m. :9 a.m. : a.m. :9 a.m. : a.m. :9 a.m. : a.m. :9 a.m. : a.m. :9 a.m. : a.m. :9 a.m. : a.m. :9 a.m. 8: a.m. 8:9 a.m. 8: a.m. 8:9 a.m. 9: a.m. :9 p.m. Time Leaving Home incontext

8 Monthly Metrics: s Economic Indicators AVERAGE BENEFITS PAID FOR UNEMPLOYMENT INSURANCE CLAIMS Average Weekly Benefit $ $9 $8 $ $ $ United States $ Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Source: IBRC, using U.S. Department of Labor data PERCENT CHANGE IN PERSONS UNEMPLOYED FROM THE PREVIOUS YEAR* Percent Change (Unemployment) Dec Feb Apr Jun Aug *seasonally adjusted Source: IBRC, using Bureau of Labor Statistics data Oct United States Increasing Unemployment Dec Feb Apr Jun Aug Oct Dec PERCENT CHANGE IN LABOR FORCE FROM PREVIOUS YEAR* Percent Change (Labor Force) Dec Jan Feb Mar Apr United States May Jun Jul *seasonally adjusted Source: IBRC, using Bureau of Labor Statistics data Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec DECEMBER UNEMPLOYMENT RATES Unemployment Rate United States *seasonally adjusted Source: IBRC, using Bureau of Labor Statistics data CHANGE IN EMPLOYMENT BY INDUSTRY SUPER-SECTOR, TO * United States OVER-THE-YEAR PERCENT CHANGE IN EMPLOYMENT BY SUPER-SECTOR*. Change in Percent Percent Industry Jobs Change Change Total Nonfarm,.. Financial Activities,.. Other Services,.. Professional and Business Services,.8. Educational and Health Services,.. Trade, Transportation and Utilities,.. Leisure and Hospitality 9.. Percent Change (Employment) Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Information.. Government 8.. Manufacturing -, Natural Resources and Mining *December of each year, seasonally adjusted Source: IBRC, using Bureau of Labor Statistics data -. U.S. Manufacturing Trade, Transportation and Utilities *seasonally adjusted Source: IBRC, using Bureau of Labor Statistics and Department of Workforce Development data incontext 8

9 Regional Labor Force and Unemployment Rates EGR EGR December of Each Year (not seasonally adjusted) Labor Force in Thousands (left axis) Unemployment Rate (right axis) EGR EGR EGR EGR EGR EGR EGR EGR EGR 9 9 incontext

10 I Did It My Way: Self-Employment on the Rise in The lure of self-employment has always been strong. What is sacrificed in subsidized benefits, paid vacations and a steady paycheck is offset by the freedom to call your own shots and the sense of personal satisfaction (forgetting, for the moment, the endless hours, stress and anxiety). Despite the inherent risks, an increasing number of Hoosiers are accepting the challenge and going into business for themselves. According to the U.S. Census Bureau s Nonemployer Statistics, the number of businesses with no employees (dubbed nonemployer establishments) rose nearly percent between and to,9 establishments. s $. billion in total receipts for represents an percent increase over. These growth rates, though positive, are among the nation s lowest over this period (see Table ). A nonemployer establishment is defined as a business that has no paid employees, has annual business receipts of $, or more and is subject to federal income taxes. The vast majority of nonemployer establishments are sole proprietorships, although partnerships and corporations that FIGURE : INDIANA S TOP FIVE NONEMPLOYER INDUSTRIES AS A PERCENT OF THE TOTAL, Other Services (Except Public Administration) Construction Retail Trade Professional, Scientific and Technical Services Real Estate, Rental and Leasing % %.%.%.% % % % % % have no employees are counted as well. These establishments may or may not be the owner s primary source of income. Many are certainly small, representing little more than hobbyists in some cases, and generate modest income. Others are very profitable and will expand and create jobs in the future. Of course, these figures do not represent all selfemployed individuals because some do employ others. As Figure illustrates, the largest percentage of s nonemployer establishments falls under the category of other services (. percent), which includes industries ranging from automotive repair to hair and nail salons. Other sectors with large numbers of self-employed individuals include construction (. percent); retail trade (. percent); professional, scientific and technical services (. percent); and real estate, rental and leasing (.9 percent). These also represent the top five sectors nationally, although in a somewhat different order. FIGURE : INDIANA S TOP FIVE NONEMPLOYER INDUSTRIES BY RECEIPTS PER ESTABLISHMENT, Real Estate, Rental and Leasing Wholesale Trade Accommodation and Food Services Transportation and Warehousing Construction $, $,8 $8,8 $, $, $ $, $, $, $8, TABLE : INDIANA NONEMPLOYER ESTABLISHMENTS AT A GLANCE Indicator Number U.S. Rank Number of Nonemployer Establishments,,9 Growth in Establishments,.% Total Receipts, $. billion Growth in Receipts,.% Receipts per Establishment, $8, Source: U.S. Census Bureau How do these one person enterprises translate into economic activity? The other services sector, for example, holds the largest share of nonemployer establishments, but in it generated some of the lowest annual receipts per establishment ($,) among s industries. The real estate, rental and leasing sector led the state with $, in annual receipts per establishment in, followed by wholesale trade at $, (see Figure ). Growth in Nonemployer Establishments As one would expect, some of s most dramatic recent growth rates can be attributed to the Internet. Subindustries such as Internet service providers and Web search portals (8 percent), Internet publishing and broadcasting (8 percent), and electronic shopping and mail-order houses ( percent) saw impressive growth between and. Despite these gains, the state s information industry accounted for only percent of the total nonemployer establishments in. The real estate, rental and leasing industry s. percent growth was the highest among s larger sectors. In terms of geography, recent growth in nonemployer establishments appears to be influenced greatly by proximity incontext

11 to metropolitan areas. counties that are part of a larger MSA account for of the top counties in terms of growth (see Figure ). Hamilton County leads the state with a. percent growth rate followed by Whitley (. percent), Ohio (. percent), Switzerland (. percent), and Hancock (. percent) counties. Eight counties saw the number of nonemployers decline between and. County Comparison So which counties have the greatest number of nonemployer establishments per capita? Figure illustrates the ratio of adults (population 8 and above) to nonemployer establishments in for each county. Lagrange County leads the state with a ratio of 8. adults to each nonemployer establishment. Adams, Hamilton, Brown and Boone counties also have fewer than adults to each establishment. Keep in mind that this measurement can be skewed somewhat as some individuals operate multiple establishments. Note. Receipts include gross receipts, sales, commissions and income from trades and businesses, as reported on annual business income tax returns. Business income consists of all payments for services rendered by nonemployer businesses, such as payments received as independent agents and contractors. The composition of nonemployer receipts may differ from that of the related data item that is published for employer establishments. For example, for wholesale agents and brokers without payroll, the receipts item contains commissions received or earnings. In contrast, for wholesale agents and brokers with payroll, the sales item published in the economic census represents the value of the goods involved in the transactions. Matt Kinghorn, Economic Research Analyst, Business Research Center, Kelley School of Business, University FIGURE : PERCENT CHANGE IN NONEMPLOYER ESTABLISHMENTS, TO FIGURE : PER CAPITA MEASURE OF NONEMPLOYER ESTABLISHMENTS, Posey. St. Joseph Lagrange Steuben Elkhart La Porte Porter.9 Lake.8 Noble De Kalb. Marshall.. Starke.9 Kosciusko.9. Whitley Allen Fulton Pulaski. Jasper Newton Wabash Cass White Miami.. Wells Adams Benton Carroll.8. Grant Howard Blackford Jay Warren Tippecanoe..9.. Clinton Tipton.... Delaware Randolph Fountain Madison. Montgomery Boone Hamilton Henry.9 Wayne Hancock Parke Hendricks Marion Putnam Rush Fayette Union. Shelby..8. Vigo Morgan Johnson Clay... Franklin... Owen Decatur... Brown. Monroe Bartholomew Sullivan Ripley Greene Jennings Ohio Jackson..9 Lawrence. Jefferson Switzerland.9.. Knox Daviess Martin Scott... Washington. or More Orange. Clark ( counties). Pike. Dubois to.9 Gibson. Floyd Crawford ( counties).... to.9. Vanderburgh Perry Harrison Warrick ( counties). Spencer Less than.9.. ( counties) St. Joseph Lagrange Steuben Elkhart La Porte Lake Porter 8.. Noble De Kalb. Marshall.. Starke Kosciusko... Whitley Allen Pulaski Fulton. Jasper Newton Wabash Cass White Miami.. Wells Adams... Benton.. Carroll. Grant. Howard Blackford Tippecanoe.9. Jay Warren Clinton Tipton.... Delaware Randolph Fountain Madison. Montgomery Boone Hamilton Henry -.8 Wayne Hancock Parke Hendricks Marion Putnam Rush Fayette Union. Shelby Morgan Johnson Vigo Clay Franklin.. Owen Decatur Brown. Monroe Bartholomew Sullivan Ripley Dearborn.. Greene. Jennings... Jackson. Ohio Lawrence. Jefferson. Switzerland.8 Knox Daviess Martin..... Washington Scott Orange.8 % or More Clark. ( counties) Pike 8. Dubois Gibson. Floyd % to 9.9%. Crawford. ( counties).8.. % to.9%. Warrick Harrison Perry ( counties) Vanderburgh.9 8. Spencer. Vermillion Huntington Declined (8 counties) Posey.8 Vermillion Huntington Dearborn incontext

12 The Southern Bank Deposit Market Banking has changed rapidly since the 98s. Due to a record number of mergers and acquisitions, the average bank grew while the total number of banks declined. With passage of the 999 Financial Services Modernization (FSM) Act, also referred to as the Gramm-Leach- Bliley Act, banks can now engage in previously restricted activities, such as underwriting securities and insurance policies. Since the FSM Act could TABLE : BANKS IN THE DEPOSIT MARKET 998 Change Southern Banks in the Market 9-9% Offi ces % Market Deposits (billions) $. $.99 % Portion of the Louisville Metro Banks in the Market % Offi ces 99 % Market Deposits (billions) $. $. % Kentucky Portion of the Louisville Metro Banks in the Market % Offi ces % Market Deposits (billions) $. $. % Louisville Metro Banks in the Market % Offi ces 9 % Market Deposits (billions) $. $9.9 % Banks in the Market 9 -% Offi ces,, % Market Deposits (billions) $9. $8. % Kentucky Banks in the Market -% Offi ces,, % Market Deposits (billions) $. $. % United States Banks in the Market,8 8,8-8% Offi ces 8, 9, % Market Deposits (billions) $,.8 $,9. % Source: Federal Deposit Insurance Corporation lead to a wave of consolidation across commercial banks, insurance companies and investment banks, market concentration was likely to rise. In this report, we investigate changes in southern s bank deposit market between 998 and (six years after the FSM Act), and compare it with the Louisville, and Kentucky markets. For purposes of this article, southern includes eight counties, four of which belong to the Louisville Metropolitan Statistical Area (metro) that also includes nine Kentucky counties. Banks in the Deposit Market As seen in Table, the amount of bank deposits in southern increased from $. billion to $.99 billion between 998 and. The number of offices increased from to, whereas the number of banks decreased from to 9. These trends are largely shared by, Kentucky and the United States. Therefore, as the FSM Act led to a wave of mergers and acquisitions, the number of banks declined while the number of retail offices increased. However, the Louisville metro did not experience a reduction in the number of banks, and this is especially true for the Kentucky side of the metro, which had an percent increase in the number of banks. Deposits in the United States went up percent from 998 to. FIGURE : PERCENT OF BANKS EXITING OR REMAINING IN MARKET Kentucky Portion, Louisville Metro Louisville Metro Kentucky Southern Portion, Louisville Metro Exit Remaining % 9% % % % *For each market, the total number of banks in 998 equals % Source: Federal Deposit Insurance Corporation % % % 9% % % % % % % % % % % 8% 8% Unfortunately, this boost was shared by neither ( percent) nor Kentucky ( percent). As for the Louisville metro, the side had a much higher increase ( percent) in the total amount of deposits than the Kentucky side ( percent). Bank Entry and Exit The banking industry is no stranger to mergers and acquisitions. For example, in 998, NBD Bank ranked first in regard to southern s deposit market share at percent. It was acquired by Bank One in 999, which was later acquired by Bank One National. Bank One National was then acquired by JPMorgan Chase. By, JPMorgan Chase Bank had become the number one bank, with about percent of the deposit market share. As seen in Figure, about percent of banks that existed in 998 exited the southern market by, while percent remained. (Remaining banks are defined as those having the same FDIC certificate number in as in 998.) As for the Louisville metro, the counties have a much lower percentage of remaining banks ( percent) than the Kentucky counties (8 percent), incontext

13 TABLE : MARKET SHARE OF BANKS IN EXIT, REMAINING AND ENTRY 998* * Geography Exit Remaining Remaining Entry Southern 8% % 9% % Portion of the Louisville Metro % % % % Kentucky Portion of the Louisville Metro % % 9% % Louisville Metro % 8% 8% % 8% % 8% % Kentucky 9% % % 8% *For each market, the total deposit market share is equal to % in 998 and Source: Federal Deposit Insurance Corporation meaning the counties had a much higher proportion of exit banks ( percent) than the Kentucky counties ( percent); this implies that the deposit market of counties was more active and dynamic than that of the Kentucky counties between 998 and. In both and Kentucky, remaining banks gained more market share since 998 (see Table ). For example, the remaining banks in southern held percent market share in 998 and 9 percent by. More specifically, Community Bank of Southern ranked sixth in 998 with a market share of percent. By, it had risen to second place with a market share of 9 percent. However, the market share of remaining banks in the Louisville metro stayed the same, due to the slight decrease in market share for the Kentucky counties and the increase in market share for the counties. Market Concentration Table reports market concentration in 998 and, measured by the market share of the top percent of banks and the Herfindahl Index. Market concentration in southern has declined considerably, despite the consolidation trend in the overall banking industry since the 999 FSM Act. More specifically, the top percent banks market share dropped from 9 percent to 9 percent, and the Herfindahl Index fell from. to.. The Louisville metro demonstrates the same trend, indicating that the local deposit markets in southern and Louisville have actually become more competitive since 998. The side of the Louisville metro has a much lower level of concentration than its Kentucky counterpart. For instance, in, the top percent banks held percent of the market share in the counties and percent in the Kentucky counties. Contrary to the local markets, overall has experienced an increase in market concentration (in line with the consolidation trend after the FSM Act), demonstrated by both a moderate increase in the top percent banks market share and an increase in the Herfindahl Index. However, the results for Kentucky are mixed. Market Share by Bank Asset Size Table shows the distribution of market shares among large (asset sizes larger than $ billion), medium (between $ million and $ billion), and small banks (smaller than $ million). In southern, medium banks hold more market share than large banks. From 998 to, the share of medium banks increased from. percent to 9.8 percent, while the shares of large and small banks both declined. Furthermore, medium banks have the highest average market share per bank in. Hence, medium banks have become the major players in the local deposit market of southern. In contrast, at the state level, large banks tend to hold the highest proportion of market share and their average market share per bank is also the highest. As for the Louisville metro, large banks dominated the market on both the and Kentucky sides in 998. However, by, medium banks dominated the market on the side. County Shares of Southern Interestingly, regardless of the considerable decline in market concentration and the large numbers of bank exit and entry, county-level market shares were relatively stable across time TABLE : MARKET CONCENTRATION Geography 998 Change Southern Top % Banks Market Share 9% 9% -% Herfi ndahl Index.. -% Portion of the Louisville Metro Top % Banks Market Share % % -% Herfi ndahl Index..8 -% Kentucky Portion of the Louisville Metro Top % Banks Market Share % % -% Herfi ndahl Index.. -% Louisville Metro Top % Banks Market Share 9% % -9% Herfi ndahl Index..8 -% Top % Banks Market Share % % % Herfi ndahl Index..9 % Kentucky Top % Banks Market Share % % % Herfi ndahl Index..9 -% Source: Federal Deposit Insurance Corporation incontext

14 TABLE : MARKET SHARES OF SOUTHERN INDIANA COUNTIES (see Table ). The ranking (Floyd, Clark, Harrison, Jefferson, Washington, Orange, Scott and Crawford) is almost the same as it was in 998, except that Floyd County rose from second place to first place, switching with Clark County. The counties in the Louisville metro hold more market share than any of the nonmetro counties, with the exception of Jefferson County (ranked fourth). Together, the four counties of the Louisville metro held about percent of the southern market share in 998 and increased to percent in. Meanwhile, the four metro counties held about percent of the entire Louisville metro market share in 998 and grew to percent in. Conclusions The local banking market in southern is active in mergers and acquisitions, yet it has become more competitive and dynamic since 998. Banks that existed in the region at that time gained more market share. Moreover, medium banks, not large banks, have become the dominant players in southern. This is particularly interesting, given that the medium and small banks are 998 Market Deposits Market Market Deposits Market County Banks Offi ces (millions) Share Banks Offi ces (millions) Share Clark* 98.8.%,..% Crawford 9..8% 88.8.% Floyd* 8..%,8. 8.% Harrison*.9.%..% Jefferson. 9.%.8.% Orange..% 8..% Scott 8 9..% 9..% Washington*..9%..% Total,8. % 9,989. % * counties included in the Louisville metro Source: Federal Deposit Insurance Corporation losing shares in the deposit market at the national level. Although the 999 FSM Act may have encouraged a consolidation trend in the entire banking industry, the local deposit market in southern has actually become much less concentrated since 998. TABLE : MARKET SHARE BY BANK ASSET SIZE* Notes. Cara S. Lown, Carol L. Osler, Philip E. Strahan, and Amir Sufi, The Changing Landscape of the Financial Services Industry: What Lies Ahead? FRBNY Economic Policy Review, October.. Southern includes Clark, Crawford, Floyd, Harrison, Jefferson, Orange, Scott and Washington counties. The portion of the Louisville metro includes Clark, Floyd, Harrison and Washington counties. The Kentucky portion of the Louisville metro includes Bullitt, Henry, Jefferson, Meade, Nelson, Oldham, Shelby, Spencer and Trimble counties. The Louisville metro is a combination of the and Kentucky portions.. The Herfindahl Index measures the size of firms in relationship to the industry and is an indicator of the amount of competition among them. It can range from to, moving from a very large amount of very small firms to a single monopolistic producer.. Rober DeYoung, William C. Hunter, and Gregory F. Udell, The Past, Present, and Probable Future for Community Banks, Journal of Financial Services Research, (-), April. Uric B. Dufrene, Sanders Chair in Business, and Yan He, Associate Professor of Finance, School of Business, University Southeast 998 Geography Large Medium Small Large Medium Small Southern Banks Market Share 9.%.% 8.%.% 9.8%.% Average Market Share per Bank.9%.%.%.%.%.% Portion of the Louisville Metro Banks 8 Market Share.%.%.%.%.9%.9% Average Market Share per Bank.%.8%.9%.%.%.% Kentucky Portion of the Louisville Metro Banks 9 9 Market Share 8.%.%.% 8.% 9.%.% Average Market Share per Bank.9%.8%.% 8.%.9%.% Louisville Metro Banks 8 Market Share 8.8%.%.%.%.% % Average Market Share per Bank 9.9%.%.%.%.8%.% Banks Market Share.%.8%.9%.%.%.9% Average Market Share per Bank.%.%.%.%.%.% Kentucky Banks Market Share 9.%.%.%.%.% 8.% Average Market Share per Bank.%.%.%.%.%.% *Banks with asset sizes larger than $ billion are large banks; those with asset sizes between $ million and $ billion are medium banks; and banks with asset sizes smaller than $ million are small banks. Source: Federal Deposit Insurance Corporation incontext

15 The Kokomo Peru CSA This article is the third of seven that will highlight each of s combined statistical areas (CSAs). CSAs are groupings of predefined metropolitan (metro) and/or micropolitan (micro) areas that, as the title suggests, combine these areas to represent larger regions and reflect broader social and economic interactions. Howard, Miami and Tipton counties make up the Kokomo-Peru CSA, which is the smallest CSA in. Accounting for only. percent of s population in, the area has just under, residents. In fact, only of the CSAs nationwide are smaller in population than the Kokomo-Peru CSA. This particular CSA was among the percent of all CSAs nationwide to experience an overall loss in population from July to. Of the largest cities and towns in the combined statistical area, only Kokomo and Peru have more than, residents. Denver, the th largest town in the CSA, has only FIGURE : JOBS IN THE KOKOMO-PERU CSA AND INDIANA, : TO :,, 9, 8,,,,,, Kokomo-Peru (left axis) (right axis) Source: IBRC, using Bureau of Labor Statistics data TABLE : JOBS IN THE KOKOMO-PERU CSA AND INDIANA BY INDUSTRY, : TO : Kokomo-Peru CSA,9,,9,,88,,8,,8,,8,,8,,8, Percent Percent Industry : Change Change : Change Change Total,8 -,8 -.,98,9,9. Educational Services, 89., 9,88 8. Mining., Health Care and Social Services, 8.,,. Public Administration, 88. 9,,. Wholesale Trade,., Administrative, Support and Waste Management,.,8,8.9 Transportation and Warehousing, , Accommodation and Food Services,8 - -.,8,88. Finance and Insurance, , -, -.9 Real Estate, Rental and Leasing , - -. Arts, Entertainment and Recreation - -9., Retail Trade, , -, -.9 Agriculture, Forestry, Fishing and Hunting - -.9,. Other Services (Except Public Administration), , -,89 -. Professional, Scientifi c and Technical Services, ,,9.8 Manufacturing,9 -, -. 8,99 -,8-8.9 Utilities - -.,. Information , -, -9. Construction, - -.,,9.9 Note: Data for the management of companies and enterprises industry were not available in for the Kokomo-Peru CSA and are therefore not included Source: IBRC, using Bureau of Labor Statistics data FIGURE : POPULATION DISTRIBUTION IN THE KOKOMO-PERU CSA, Other Areas.% Kokomo.% 9.% Peru Tipton...8% Greentown...8% Russiaville...9% Bunker Hill...% Converse...% Sharpsville...% Windfall City...% Denver...% residents, and. percent of all residents of the CSA live in smaller towns or other areas (see Figure ). Jobs The Kokomo-Peru CSA has seen fairly steady declines in jobs from : to : (other than an increase of jobs in ), with total losses for the area at,8. In contrast, the state has been adding jobs since (see Figure ). In more comparable percentage terms, the decline in jobs in the Kokomo-Peru CSA was -. percent compared to a. percent increase in. Manufacturing did the most damage in the CSA with more than, jobs lost since the second quarter of. Even after these losses are figured in, manufacturing comprised. percent of jobs in the CSA, significantly higher than the state s 9. percent. The largest gains in the Kokomo- Peru CSA were in education and health care and social services, with increases of about 9 jobs and 8 jobs, respectively (see Table ). With these mild additions being the largest the combined statistical area saw, it is not surprising to see such drastic declines over the past five years. There were eight companies in the Kokomo-Peru CSA that employed at least people, seven of which are located in Howard County. The largest of these companies was incontext

16 TABLE : LARGEST COMPANIES IN THE KOKOMO-PERU CSA Company County Employees Description Delphi Electronics and Safety Howard 8, Manufacturing: semiconductors and related devices Howard Regional Health System Howard, Hospitals Saint Joseph Hospital Howard 9 Hospitals Haynes International Inc Howard 8 Manufacturing: Foundries-Steel Meijer Howard Grocers Retail University Kokomo Howard Schools: Universities and Colleges Wal-Mart Supercenter Howard Department Stores Square D Miami Electric Equipment and Supplies Wholesale Source: ReferenceUSA, as of January FIGURE : AVERAGE WEEKLY WAGES BY INDUSTRY, : Total Manufacturing Utilities Professional, Scientific and Technical Services Wholesale Trade Finance and Insurance Transportation and Warehousing Public Administration Agriculture, Forestry Fishing and Hunting Health Care and Social Services Management of Companies and Enterprises Construction Educational Services Mining Information Real Estate, Rental and Leasing Retail Trade Other Services (Except Public Administration) Administrative, Support and Waste Management Arts, Entertainment and Recreation Accommodation and Food Services Source: IBRC, using Bureau of Labor Statistics data FIGURE : COMMUTING PATTERNS IN THE KOKOMO-PERU CSA, $ $ From CSA to Elsewhere in 8,88 From Elsewhere in to CSA, Howard $ $ Miami $8 Both Living and Working in CSA, Tipton $, Kokomo-Peru $, $, $, From CSA to Outside the State 8 Delphi Electronics, a manufacturer of semiconductors and related devices (see Table ). Wages While the job market was not overly appealing from to in the Kokomo-Peru CSA, average weekly wages were at least somewhat encouraging. For total covered employment, the CSA consistently paid at least $ more per week in all five years. At the individual industry level, the region s manufacturing firms paid an average of $ more per week than did firms in the second quarter of. The other two industries where the Kokomo-Peru CSA paid higher wages were in agriculture, forestry, fishing and hunting and transportation and warehousing (see Figure ). The downside is that each of these three industries experienced job losses during the last five years. Commuting Around, workers lived in the Kokomo-Peru CSA, according to Census. Of those,. percent live and work in the same county within the CSA, and another. percent travel to other counties within the CSA (see Figure ). As for those workers leaving the combined statistical area,. percent travel to other counties within, meaning less than percent leave the state (which is expected, given the central location of the CSA within ). Notes. U.S. Office of Management and Budget, available at Molly Manns, Research Associate, Business Research Center, Kelley School of Business, University incontext

17 incontext Volume 8, Number Digital Connections InContext Current workforce and economic news with searchable archives. Hoosiers by the Numbers Workforce and economic data from the Department of Workforce Development s research and analysis division. STATS Award-winning economic and demographic site provides thousands of current indicators for and its communities in a national context. Economic Digest The news behind the numbers, the Digest is a unique partnership with daily newspapers throughout providing access to daily news reports on business and economic events. With support from the Lilly Endowment, InContext is published monthly by: Department of Workforce Development Commissioner... Andrew J. Penca Deputy Commissioner... Martin Morrow Research Director... Hope Clark N. Senate polis, IN Web: Economic Development Corporation Secretary of Commerce... Nathan Feltman Research Director... Ryan Asberry Policy Director... David Lips One North Capitol, Suite polis, IN Web: Business Research Center Kelley School of Busi ness, University Director... Jerry Conover Deputy Director... Carol O. Rogers Managing Editor... Rachel Justis Graphic Designer... Molly Manns Circulation... Nikki Livingston Quality Control... Shannon Aranjo and David Landers Locating Historical Census Publications It can be challenging to both locate and use older U.S. government documents and statistical data that only exist in paper form. It does not help that the paper format is often in less-than-stellar condition. The State Data Center at the State Library has recently added Part I of a two-part microfiche set to the center s collection. Originally filmed by Greenwood Press, this set includes non-decennial U.S. Census publications issued from 8 to 9 and contains, Census reports on,9 microfiche. Included in this set are censuses of: agriculture business dependent, defective, and delinquent classes foreign trade government housing industry manufacturers international population religious bodies statistical abstract vital statistics MAP TO THE INDIANA STATE DATA CENTER partial employment, unemployment, and occupations, 9 Cuba, Philippine Islands, and Virgin Islands activity and history of the Census The State Data Center is located on the second floor of the State Library. This microform set is available for public use on the library s second floor where there are also more than two dozen microform readers with printing capabilities. If you would like to view or use this set, please feel free to visit and see what s new at the State Data Center! Anika Williams, State Data Center Coordinator, State Library Bloomington E. Tenth Street, Suite Bloomington, IN polis Avenue, Suite polis, IN Web: context@indiana.edu