This Labor Day, Indiana workers can party like its 1996.
Why 1996? Thats the year corresponding to their income, according to a new Ball State University study. The report from the Center for Business and Economic Research gives Hoosier workers little cause for holiday celebration.
Since 1980, the state has tumbled from 30th to 40th in the nation in per capita income.
Using inflation-adjusted numbers from 2010, the study assigns a year in which the current standard of living in each Indiana county corresponds to the standard of living in the nation as a whole. Residents in Allen County, for example, had an average personal income in 2010 equivalent to the national average in 1996. Adams County residents had an average personal income equivalent to the U.S. average in 1983.
The bulk of counties in Indiana experienced personal income levels that were 20 years to 30 years behind the national average, according to the study.
The figures show stark differences among counties. Two booming Indianapolis suburban counties, Hamilton and Boone, had personal income levels exceeding the national average – the former at a 2019 level and the latter at 2018.
At the bottom, LaGrange County has an income level comparable to 1964, but figures are likely skewed by its large Amish population. Miami and Starke counties have per capita personal incomes equivalent to a 1975 level.
The Ball State study takes pains to separate income data from the states political leadership.
It is nearly certain that no policy, no matter how ambitious, effective, or wide reaching, will achieve measurable income goals over the term limit of a governor, it cautions. The results unambiguously suggest that party affiliation has nothing to do with income differences in the short run.
In the long run, however, the data are discouraging. Indianas per capita income slide over the past three decades has followed years of policy changes that elected officials and economic development professionals insisted would bring jobs and higher paychecks: tax abatements and incentives, property tax reform, right to work, income tax cuts. Each was hailed as an essential element in turning the states fortunes.
Right to work is a classic example of an attempt to drive wages down, said Randy Schmidt, vice chairman of the United Auto Workers Community Action Program Council for Adams, Allen and Wells counties. It had nothing to do with bringing good-paying jobs to Indiana.
Schmidt said jobs are created from Hoosiers having money to spend, not from investments by so-called job creators in trickle-down fashion.
In explaining stark differences among regional income levels, the Ball State study points not to tax or labor policies but to human capital. It argues that efforts to boost labor force participation will likely occur at the K-12 level.
While there is some proof that exposure to some college or the acquisition of an associate degree confers some wage or benefit, this effect varies dramatically by occupation and age, according to the study. Policies that focus on educational credentials without attention to the type of learning will exhibit highly variable and uncertain benefits.
Yet Indiana policymakers relentlessly push degrees and certification even as they continue to reduce funding for K-12 education, all the while bemoaning the remediation costs placed on colleges and universities by students unprepared for higher education.
If the studys findings dampen enthusiasm for celebrating Labor Day – take a closer look.
They should prompt deep discussion of the states economic and education direction, with an emphasis on reversing the migration of Hoosiers to larger population centers within the state and outside it. Strengthening Indianas cities and towns will make them more attractive to the young residents who are leaving. In turn, they will stay and create the jobs that will begin to push wages higher and rebuild the human capital that employers need before locating or expanding their businesses. Eventually, Indiana can reverse its decline, catch up with the rest of the nation and find reason to celebrate every Labor Day.