The Herald Bulletin

August 25, 2013

Study: Indiana personal income lags behind US


The Associated Press

INDIANAPOLIS — Indiana's average personal income lags more than a decade behind the income levels enjoyed by the nation as a whole, a new Ball State University study has found.

Ball State researchers looked at Indiana's 2010 wages and, after adjusting for inflation, assigned each county the year in which its standard of living equaled that year's national average.

They found that Indiana's average per capita income is equal to the 1996 national level.

Although Indiana has seen small annual increases in the average standard of living over the past 50 years, it continues to lose ground nationally. Indiana ranks 40th among states for 2010 per capita income, with the average resident earning $33,981. By comparison, the state ranked 30th in 1980.

The study's findings are important because income levels are a measure of standard of living, said Michael Hicks, director of Ball State's Center for Business and Economic Research.

"A higher standard of living tends to promote better outcomes — more time you can spend with your kids, more health care you can consume," he said."Standard of living raises all boats."

Charles Jackson, a 33-year-old Indianapolis resident, said he's not surprised that workers in other states earn higher wages.

Jackson makes $40,000 a year working as a yard manager at Alpine Group. He graduated from Ivy Tech in 2006 with a degree in automotive technology and computer programming.

But he's put himself on a budget, cutting back on eating out and trips to Kings Island, Cedar Point and Las Vegas to visit his grandfather.

"To be comfortable and save for what you want to save for is hard," Jackson said. "I would definitely say there's places where people are making a lot more than here."

He's heard the pay is better in Texas and is thinking about moving there.

Hicks said Jackson's interest in moving to a state with higher wages reflects a problem for Indiana. He said Hoosiers go to college and graduate at rates similar to the nation, but the state has trouble retaining graduates.

Between 2004 and 2010, the Ball State study found that 14.7 percent of the state's population in-migrated to Indiana, while 15.22 percent out-migrated.

The Ball State study also found sharp differences in personal income among Indiana counties. Marion County — the home of Indianapolis — had an average personal income in 2010 equivalent to the national average in 1999.

But most Indiana counties were well behind that, with personal income levels 20 to 30 years or more behind the national average. The worst counties were LaGrange, which was at 1964 income levels, and Miami and Starke, which were at 1975's level.

Three counties — Hancock, Porter and Warrick — earned at 2010 national levels, while two — Boone and Hamilton — earned more than the national average.

The study found that the disappearance of high-wage manufacturing jobs during several recessions since the early 1980s has contributed to Indiana's lower wages.

In July, Indiana's unemployment rate was 8.4 percent, the 16th consecutive month it was higher than the national rate.