Is the economy creating good jobs?  Not all of us agree that it is.  Stories of job closings at long-established manufacturing companies, at the same time as we see new Wal-Marts popping up in towns all around us, support a casual impression that jobs these days aren’t what they used to be.

Of course, that bland statement is almost always true.  Given advances in technology, increasing affluence, and the pressures of competition, there are very few jobs in the American economy that can be said to remain the same.  But the idea that this change is for the worse, delivering our children into a world where they cannot enjoy the same standard of living as we do, turns the whole notion of progress on its head, if it were true.

Fortunately, it is not.  If a “good” job is interpreted to mean a “high wage” job, then the behavior of the economy during the recent recession and recovery has been almost exactly the same as it has been for most other recessions since 1970.  In each of these downturns, high wage jobs have tracked overall jobs growth quite closely, both on the way down and on the way up.

Since December of last year, the U.S. economy has created almost 1.3 million new payroll jobs.  A recent study by the Federal Reserve Bank of Chicago shows that three quarters of that job growth came in industries that pay above average wages.  The strongest job growth came in professional and business services, education and health services, and construction.  Indeed, in the last nine months only one major industry category – non-durable manufacturing – failed to add to its payroll totals.

But statistics like those do not satisfy the concerns of all of us, particularly here in Indiana.  The message in what many say and write around the state is that a good job must be a manufacturing job.  The development priorities in almost every community in Indiana begin – and sometimes end -- with the idea that we must retain and grow our manufacturing job base.  We have been accustomed to think of manufacturing as the driver of wealth creation in our communities and regions for so long that it is hard to think of anything else taking its place.

Yet in the national economy, that is precisely what has happened.  According to a new study by the University of Michigan, the states that are the most concentrated in higher wage, lower education jobs – manufacturing, construction, and transportation – are falling behind the rest of the country at an alarming rate.  The states Is the economy creating good jobs?  Not all of us agree that it is.  Stories of job closings at long-established manufacturing companies, at the same time as we see new Wal-Marts popping up in towns all around us, support a casual impression that jobs these days aren’t what they used to be.

Of course, that bland statement is almost always true.  Given advances in technology, increasing affluence, and the pressures of competition, there are very few jobs in the American economy that can be said to remain the same.  But the idea that this change is for the worse, delivering our children into a world where they cannot enjoy the same standard of living as we do, turns the whole notion of progress on its head, if it were true.

Fortunately, it is not.  If a “good” job is interpreted to mean a “high wage” job, then the behavior of the economy during the recent recession and recovery has been almost exactly the same as it has been for most other recessions since 1970.  In each of these downturns, high wage jobs have tracked overall jobs growth quite closely, both on the way down and on the way up.

Since December of last year, the U.S. economy has created almost 1.3 million new payroll jobs.  A recent study by the Federal

 Reserve Bank of Chicago shows that three quarters of that job growth came in industries that pay above average wages.  The strongest job growth came in professional and business services, education and health services, and construction.  Indeed, in the last nine months only one major industry category – non-durable manufacturing – failed to add to its payroll totals.

But statistics like those do not satisfy the concerns of all of us, particularly here in Indiana.  The message in what many say and write around the state is that a good job must be a manufacturing job.  The development priorities in almost every community in Indiana begin – and sometimes end -- with the idea that we must retain and grow our manufacturing job base.  We have been accustomed to think of manufacturing as the driver of wealth creation in our communities and regions for so long that it is hard to think of anything else taking its place.

Yet in the national economy, that is precisely what has happened.  According to a new study by the University of Michigan, the states that are the most concentrated in higher wage, lower education jobs – manufacturing, construction, and transportation – are falling behind the rest of the country at an alarming rate.  The states that are the most concentrated in “knowledge” industries, including financial services, professional and technical services, and management of companies, have higher, and faster growing, per capita income than the rest.  The message is clear – knowledge-based jobs, requiring more education and training, are the force creating prosperity in the post-industrial economy.

Indiana’s status as state with lower than average, and more slowly growing, per capita income relative to the national average is a painful case in point.  We are joined in that unflattering category by most other Midwest states, yet even among our neighbors we stand apart.  Just 13.4 percent of our state’s earning base comes from the high-paying knowledge-based jobs that comprise 25-35 percent of the base of the twenty best performing states.  And our 26.5 percent earnings slice from high wage/low education jobs is the highest in the nation.

It’s hard to see what our state’s leaders can do to cancel or reverse the evolution of the economy from what it used to be.  But the longer that we hold out in denial of the new economic facts of life, clinging to the notion that manufacturing is the key to our collective livelihoods, the further we are likely to fall behind the rest of the country in the economic race.