[Congressional Record Volume 140, Number 105 (Wednesday, August 3, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 3, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
               IMPROVING THE ECONOMY IN SOUTHERN INDIANA

                                 ______


                          HON. LEE H. HAMILTON

                               of indiana

                    in the house of representatives

                       Wednesday, August 3, 1994

  Mr. HAMILTON. Mr. Speaker, I would like to insert in Washington 
Report for Wednesday, August 3, 1994, into the Congressional Record:

               Improving the Economy in Southern Indiana

       Despite the current interest in health care reform in 
     Congress and the press, the topic that comes up most 
     frequently when I talk with residents of the Ninth District 
     is the outlook for jobs and the economy in southern Indiana. 
     Last month, I held a congressional hearing in New Albany--an 
     informal roundtable discussion with 13 local academic and 
     business leaders. The topic was the economy of southern 
     Indiana and steps that could be taken at the federal, state, 
     and local levels to improve business conditions and the 
     business climate in our part of the State. The participants 
     provided some useful information on the economy of southern 
     Indiana and how we can strengthen it.
       Current Economic Conditions: The general consensus was 
     that, after 3 or 4 soft years, economic conditions in 
     southern Indiana had improved significantly during the past 
     year or so. Much of the new growth came from expansion at 
     existing firms to meet growing domestic demand, but many 
     firms in southern Indiana are also aggressively expanding 
     their markets in foreign countries. There is also evidence of 
     strong new business growth in southern Indiana--mostly in 
     services but many in manufacturing--plus an increase in 
     homebuilding. The improved economic conditions have 
     stimulated substantial job growth; Indiana ranks 16th among 
     the states in job creation, while the Louisville metropolitan 
     area has added 10,000 jobs in the last year, many on the 
     Indiana side of the river. Indiana's unemployment rate is now 
     4.7%, compared to the national average of 6.0%.
       Improving Business Conditions: Many suggestions were made 
     for improving the business climate in southern Indiana, with 
     most of the discussion focusing on improving the 
     transportation infrastructure, improving the quality of the 
     workforce, and reducing the burden of government regulations.
       There was widespread agreement that infrastructure 
     problems, particularly transportation infrastructure, are 
     holding back economic growth and development in southern 
     Indiana. A strong infrastructure will be an important factor 
     in helping Hoosier communities attract new jobs, and many 
     specific projects were identified, including highway 
     improvements to U.S. 50 and U.S. 231, a new highway between 
     Evansville and Indianapolis, and new bridges across the Ohio 
     River. We also need to upgrade local airports, improve some 
     of the locks and dams on the Ohio, and improve local 
     recreational facilities to attract tourism.
       Among the most compelling problems raised during the 
     roundtable was upgrading the workforce in southern Indiana in 
     light of rapid changes that are occurring in the nature of 
     work. Southern Indiana is blessed with a good, productive 
     workforce, but several concerns were expressed about the 
     future. Modern factories and businesses need highly skilled 
     workers with strong backgrounds in math and statistics, good 
     organizational and communication skills, and good judgment 
     and imagination. Such skills are needed in order to keep up 
     with rapid changes in production technology, the complex 
     demands of flexible manufacturing, and expanded worker 
     responsibilities. In southern Indiana, where we have fewer 
     high school and college graduates than other parts of the 
     country, we need to run harder just to keep up. Our schools 
     are improving, but it is getting harder for schools across 
     the country to keep pace with the revolutionary changes that 
     are occurring in the workplace. Businesses will have to 
     become more involved with local schools to help them 
     define the skills that young people will need in the years 
     ahead.
       A frequently-raised topic was the impact of government 
     regulation on businesses in southern Indiana. While all the 
     participants expressed a desire to comply with regulations 
     that benefit society, a number pointed out ways in which 
     federal regulations impose unnecessary costs. Government 
     often takes a single-minded approach that fails to consider 
     the broader impact of its regulations on the economy and 
     jobs. There can be problems with the enforcement staff who 
     come into the plants, including a high turnover rate and 
     occasionally a poor knowledge of regulations. New firms often 
     face time-consuming delays obtaining necessary permits, while 
     many small businesses do not have the staff to determine how 
     to comply with many regulations or even to know what the 
     regulations are.
       A number of other issues also came up during the roundtable 
     discussion, including lack of small business access to 
     capital; the rising cost of health care; improved training 
     for local development officials; and better incentives for 
     businesses to invest for the future. On the other hand, 
     recent cuts in the federal budget deficit have helped make 
     firms in southern Indiana more competitive by lowering 
     interest rates and the value of the dollar in foreign 
     exchange markets, while government efforts to remove foreign 
     barriers to U.S. exports have also been helpful.
       The Future: I am following up on specific suggestions 
     raised at the roundtable, for example, seeing what can be 
     done about the problem of small businesses having no single 
     source of information on government regulations. And I agree 
     with the observations of participants that the federal 
     government should reduce government barriers to job 
     creation--excessive regulations or expensive federal 
     mandates--and that it should continue to reduce the federal 
     budget deficit. Yet the overriding sense I got from the 
     roundtable was that policy initiatives at the federal level 
     generally have an important, but limited impact on local 
     economic development. None of the participants thought some 
     new capital gains tax break or federal program for job 
     training or community development was the key. The factors 
     they emphasized--a well-trained, industrious work force and 
     good roads and bridges--are primarily local responsibilities.
       In the end, the initiative for change and the commitment to 
     carry it out must come from local leaders. The key is often 
     old-fashioned energy, skills, and entrepreneurship. The 
     difference between economic vigor in one area and stagnation 
     in another is frequently found in the entreprenurial skills 
     of a few people. At the federal level, we can help local 
     leaders by funding specific infrastructure or community 
     development projects and can assist state and local efforts 
     to improve education and training. But in the end a 
     community's well-being is usually determined by the energy 
     and innovations of its residents and the quality of its 
     leadership.

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