The Real State of the State

A former student of mine is a researcher for Indiana’s Institute for Working Families. (I strongly encourage those of you who are interested in evidence about the status of working Hoosiers to visit and like the Institute’s Facebook page.) He was the lead researcher for the Institute’s recently released report, The Status of Working Families 2011. That report, which he shared with me, is a sobering corrective to the political hype that passes for news these days.

The punditocracy has characterized Indiana as an economic “success story,” as a state that weathered the Great Recession better than most. As the Institute’s report makes clear, that rosy evaluation ignores a number of highly inconvenient facts: the state has 231,500 fewer jobs than before the recession (Indiana is among only 17 states that have continued to experience absolute declines in the labor force since the recession began); our median wage for those with a bachelor’s degree is $0.80 lower than the national average (and a mere 14.6% of Hoosiers even have a bachelor’s degree–we rank 42d in the nation); since 2000, the state has seen a 52% increase in poverty.

These and similar statistics in the report are depressing enough, but I think the most significant analysis centers on wages. Although our political rhetoric regularly conflates job creation and wages, they are two very different indicators of economic health, and both sides of that equation are important. We need more jobs, but not just any jobs. We need jobs that pay a living wage.

So how does Indiana stack up?

  • Indiana workers earn 85% of what workers in the rest of the country earn. We rank 41st in the nation.
  • Since 2000, wages have decreased for workers in both the 50th and 10th percentiles (by 3.4% and 10.6% respectively). This cannot be explained by decreased productivity, because productivity increased by over 14% during that same period.
  • Median household income fell by 13.6%–the second largest decrease in the nation. (Michigan was first.)
  • Median family income also decreased dramatically, falling 29.6%
  • Since 2000, Indiana has experienced a 52% increase in poverty.

The current administration believes that low tax rates and decimated unions will attract jobs to our state. Evidence does not support this belief. Businesses relocate to areas offering–among other things–an educated workforce and consumers with the discretionary income to buy their goods. They relocate to environments offering a high quality of life–parks, public transportation, good schools and a reasonable social safety net. These are the very things that suffer when lawmakers care only about slashing taxes and depressing wages.

There’s a reason businesses aren’t moving in droves to Mississippi.

If we continue to starve public education and local government, if we continue to pursue policies that depress wages and make it more difficult for families to escape poverty–if we continue to emulate states like Mississippi–businesses won’t move here, either.


  1. Still, if enough jobs are “created”, then I can have three or four of them, and maybe approach a living wage. Maybe. Probably drop dead of a heart attack, though. And, some people wonder why I don’t vote Republican…

  2. No easy answers. We should be as deep in hock as California or Illinois? Lots of people migrating there to look for jobs?

    With you a thousand percent on maintaining civic virtues that are family amenities. Super bowls aren’t fixing Marion country any more than our general societal tolerance of irresponsibility. I don’t know how to fix education until we fix family.

    When do we move from blaming our problems on race, gender, income, party, and demand common sense? If you can’t afford children- you don’t have them. If you commit insider trading- you go to jail.

    There is no free lunch. There never was.

  3. And, families and children in desperate need of services and supports cannot get the help they need so that state resources can be “saved” toward building a surplus.
    “Mentally Ill Kids Caught in Catch 22”:

    Children do not have a choice as to whether or not they are born with a disability or acquire a mental illness, and parents who have a child with a disability or mental illness sometimes need supports and treatment beyond what private insurance and help for others can provide. This also is a family issue.

  4. This is a frightening report but not surprising. While Daniels and Ballard pat themselves on their respective backs about the bountiful increases they have brought about in our economy; we are hard pressed to see evidence of it in our neighborhoods and especially in our own homes. As long as education cuts increase and our tax dollars are spent on sports venues we will continue to see teachers arrested for drunk driving and sexual abuse of students, our physical safety is at risk due to poorly trained police who are often in the news being arrested and the public safety leaders cannot see there are problems, nor can they decide who their leaders should be, the state budget department either lost, found or routed to wrong counties half a billion dollars, our living conditions will not change but we are regularly fed news about the great financial state of this state. I recently saw a news item that Indiana is one of the best states in the nation in which to purchase a home; I’m sure this is true because the sellers are selling at great losses to be able to sell their homes. Please remember this most important report by Sheila come November as you head for the polls.

  5. As I read thru this post, I was struck by the overriding irony of the following fact: Mitch and his administration’s promoters (self-identified “skeptics of government”) measure the success of their tenure by the success of GOVERNMENT in amassing budget surpluses; success isn’t measured by the improvement in the lives of constituents — that might require the expenditure of resources or provision of programs that — eek — cost money, which would deplete state coffers.

  6. Hello Sheila
    I’m a new reader and I wanted to pop in and say, bravo! Your blog is a perfect example of educated Hoosiers using logic; which is what we were taught back in the day. As citizens of the world, we have to look at the numbers offered by the conservative (ha ha) government in charge, but the effect on the citizens of this state has had with numbers like that. This post outlines just a tip of the iceburg of chilling reality for Hoosiers. Some are leaving the state for jobs and leaving behind a house that won’t sell/can’t sell, foreclosed on, just speaks volumes about how the middle class was sold out.

    This congress took away the Hoosier’s bargaining rights, laid off necessary positions like teachers, firefighters and cops, and gave tax breaks to corporations. Those actions completely ignore their fellow humans and residents of this state. The numbers you posted make me lower my head in shame.

    Is this what we wanted? For Indiana? For Hoosiers?

    I don’t think so.
    I think we can do better.
    We need to get more involved, like Wisconsin.
    Let’s pick up that rug and shake out the corruption of our leaders.

    Come on, who’s with me?

  7. These facts and figures make sense. Indiana’s neo-conservative attitude is hurting the states workforce and middle class. Sad thing is that I voted for Mitch Daniels (what an idiot I was)! I figured that he was a good business man, not a corporatist stooge who believes in the whole fairly tale of less taxes equals more business stimulation. Additionally, attacking unions who advocate for liveable wages will only create more Wal-Marts and McDonalds to serve crappy products to an already unhappy population living on peanut wages. I will probably never vote for another republican Indiana governor ever again, assuming I still live in this neo-con cesspool of a state.

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