Hoosiers can be forgiven for thinking that Governor Pence is conducting a vendetta not just against teachers and gay folks, but working people in general. As if the much-hyped “right to work” law wasn’t enough to depress wages in Indiana, now the administration is promoting a measure to get rid of the common construction wage, and yesterday, while attention was focused on RFRA, the House obediently went along (although 13 Republicans did break ranks to join Democrats who opposed the bill).
The Governor touts Right to Work and elimination of the common wage as economic development tools. (If I may be forgiven a bit of snark, given the amount of economic damage his “Religious Freedom” bill has inflicted, he shouldn’t be surprised if we take his protestations of concern about the state of our economy with a pillar of salt.)
So–what are the actual facts that the Senate should consider as this latest assault on middle-class Hoosiers comes up for a vote in that chamber?
The Institute for Working Families (disclosure: I serve on the organization’s advisory board) issues a biennial Status of Working Families Report; it examines data on poverty, the labor market, wages and taxes.
“From the time the recession started, the rate of poverty, child poverty, and the share of low-income Hoosiers have all increased at rates greater than all neighbor states and the U.S. Moreover, while in all states around us, poverty is declining, it’s still rising in Indiana, as is the share of low-income Hoosiers. Inevitably, this means that Indiana’s middle-class is shrinking.”
Additional research findings included:
- Median household income has been on the decline since the beginning of the century – down by nearly $8,000 since 2000, and still declining as of last count. Again, while all neighbor states’ median household incomes are growing, ours is still declining.
- Median hourly wages and 20th percentile wages – which are still declining – are down by about $0.80 each since 2007.
- Of the half-million jobs in the top three industries, 74% pay below $13.00 per hour
- During the growth period from 2001 – 2007, Indiana netted only around 18,000 jobs, while the population grew by hundreds of thousands. Only the low-wage category experienced a net gain (97% of which pay less than $13.00 per hour).
- Or, since the recession started, only the low-wage category experienced a net gain. Of the jobs lost in mid-wage industries during the recession (2007 – 2010), 43% were manufacturing jobs and 38% were construction and contracting jobs. Despite a strong comeback in manufacturing, both of these middle-class jobs are still well below pre-recession levels.
Only two other states saw larger increases in income inequality than Indiana last year. That gap makes it virtually impossible to grow our middle class and/or create a sustainable economy.
So where does the common wage factor in? As Derek Thomas, Senior Policy researcher at the Institute explains,
By maintaining the common wage – especially at a time when middle-to high-skill jobs are in demand – local governments can enhance the welfare of Hoosier families and communities who desperately need quality, middle-class jobs that pay well enough to meet their most basic needs.
Just once, could Indiana’s Governor and lawmakers stop pandering to their political godfathers/donors, and resist measures to keep us at the level of a third-world nation?