For a decade now, ever since the Great Recession, we’ve heard how Indiana is a great place to do business. It’s a story that workers hear and that legislators hear. And it might be true if you are a business.
But is it true, if you are a worker? Well, let me tell you why it is and is not true.
Between 2010, when the economy was just coming out of the Great Recession, and 2019, when the economy was about to experience the Great Pandemic of 2020, earnings per job in Indiana grew faster than in the United States as a whole.
That’s right if you take the earnings of those on wages and salaries, plus net income of proprietors (farm and non-farm), and then divide that number by the number of jobs, the result is average earnings per job. For the U.S., those earnings per job grew by 23.0 percent while Hoosiers racked up a gain of 23.7 percent.
(My phone ringing? A happy call from the Indiana Chamber of Commerce or the Governor’s office?)
Spoilsports might note, when you bring that down to an annual rate, adjusted for inflation, it’s a real increase of only 0.62 and 0.69 percent per year respectively for the nation and Indiana.
(The phone stopped ringing.)
Back in 2010, Indiana had just three counties with earnings per job ahead of the national average of $52,187. They were Martin, Marion, and Posey counties. By the end of the decade in 2019, the nation’s average climbed to $64,180; the same three were up above that level along with newcomer, Bartholomew County.
Now if I were talking with our State Solons, I might casually mention this simple fact means 88 of our 92 counties don’t measure up to the nation’s average earnings per job.
If that statement got some attention from even a handful of those 150 persons committed to our welfare, I’d point out our state average earnings per job in 2010 was $5,801 (11.1 percent) below that national average. By 2019, that deficit was $6,805.
(Is that a tweet from the Indiana Economic Development Corp. - - IEDC -- saying we’re now only 10.5 percent short of the nation’s average, over half a percentage point of improvement since 2010?)
I wouldn’t tell those proud legislators the real reason our numbers look good is we had slower job growth than the nation between 2010 and 2019; 13.7 percent vs 17.9 percent nationally. As the denominator in the earnings per job figure, that pushes up the Indiana result, which was already trailing the nation in earnings growth (U.S. 45.0 percent, Indiana 40.6 percent).
With long-term lower earnings and slower job growth than the U.S., Indiana doesn’t seem so good for workers.