Indiana wages lag behind national average, smaller states

This is the latest installment of an investigative reporting project conducted by FOX59, CBS4, and State Affairs Indiana. This collaborative effort focuses on the Indiana Economic Development Corporation and deals it makes in the name of growing the state’s economy. The agency, led by Governor Eric Holcomb, who appoints all members of its ruling board of directors, has come under greater scrutiny since establishing the LEAP District project in Boone County .

It’s not even close.

The biggest thing in Greensburg is the Honda plant.

For 16 years, Civic and CRVs have rolled out of the assembly factory. Landing the facility for Decatur County was one of the early, cherished victories of the Indiana Economic Development Corporation (IEDC).

At the groundbreaking in March 2007, then-Governor Mitch Daniels predicted the plant’s economic impact, “will be felt not just in the near vicinity in Greensburg but for many places around.”

Fast forward to today, folks in this community of 12,300 tend to agree the plant has been a gift to the community. Customers at Storie’s restaurant, dining on generous pork tenderloin sandwiches, were happy to pause their eating to heap praise on Honda.

Mandy Lohrum, executive director of the Hospital Foundation of Decatur County noted, “Some of their higher-level employees are residents of Decatur County and that’s really nice.”

“It’s made the economy go up because it’s made other places that are hiring up their ante,” said Jerri Ownes, a longtime Greensburg resident.

Mayor Joshua Marsh agrees, “It does drive some of the market and money in people’s pockets in town is an okay thing, too.”

According to STATS Indiana, since construction began at the Honda plant per capita income has gone from $32,198 to $52,101, an increase of 61.8%.

That, in a nutshell, was Daniels’ vision for the IEDC, to fatten Hoosier paychecks.

The agency’s 2006 Strategic Plan laid out an extremely specific goal, “meet the national average in per capita income by 2020”.

Daniels reiterated that target in a 2010 Speech to the Economic Club of Indiana where he stated, “The objective of our administration is to raise the net disposable income of Hoosiers.”

Now in its 20 ^th year of operation, the IEDC is not any closer to that goal.

Now, don’t get confused. Incomes in Indiana have gone up. Per capita income is the measure of all incomes divided by the total population.

In 2005, when the IEDC was created, per capita income in Indiana was $31,376, according to data from the US Department of Commerce. Compare that to the national average then: $35,699. That put Indiana incomes at 87.96% of the national average or a ranking of 41 ^st of all US states.

Last year, Indiana’s per capita income rose to $60,038. Pretty good, right?

But remember, except in recessions, incomes have consistently risen in America. The national per capita income in 2023 was $68,531 meaning Hoosiers earned 87.61% of that benchmark, good for 36 ^th among states.

And this may surprise a lot of people. A number of smaller states do better than Indiana.

People in Iowa ($62,512), Utah ($$62,823), Maine ($63,117), Kansas ($63,732), Montana ($63,918), South Dakota ($70,353) and North Dakota ($73,341) make more money.

When we pointed this out to Daniels in a March interview, he noted dollars go a long way here.

“We have one of the lowest costs of living in the country which is great,” Daniels said. “Our housing costs are about the best in the country in part due to the fact that we lowered and froze property taxes.”

However, there are clear signs from the Federal Reserve Bank of New York (FRBNY) that Hoosiers desperately need more money. The FRBNY tracks debt that is “delinquent” or 90 days past due.

Indiana has the 6 ^th highest percentage of delinquent car loans among states. For home mortgage delinquency, Indiana ranks 10 ^th highest. Hoosiers with delinquent credit card debt rose more than 36% last year.

That two decades of Indiana’s economic development efforts have not produced financial benefits for all Hoosiers comes as no surprise to Michael Hicks, “It was never going to work.”

The Ball State economic professor said the true key to growing businesses is education, “Have the same share of college graduates and associate degree holders and bachelors and high school degree holders as the rest of the country.”

What Hick is describing is called “educational attainment” and using the measurement, Indiana grades poorly.

The US Census Bureau collects data for adults aged 25 and older. In Indiana, 90.2% of the population has a high school degree or higher, good for 34 ^th among all states.

But just 29.6% of those Indiana adults have a bachelor’s degree or higher, ranking a dismal 43 ^rd .

More than anything else, Hicks said companies want a ready, educated workforce.

“Businesses are naturally looking for that talent-rich location and if you don’t have that talent-rich location, then you have to pay them a lot to come here,” Hicks said.

Or pay more to entice companies to grow here.

Just last month, Eli Lilly announced it was expanding again its commitment to the IEDC’s LEAP District in Boone County. Total capital investment growing to $ 9 billion for the twin pharmaceutical factories currently under construction.

In return, the IEDC is handing over an incentive package that includes training grants, infrastructure improvements plus tax rebates and credits worth an estimated $1.25 billion. When fully operational, it’s expected the Lilly plants will employ 900 people, bringing the state’s incentive cost to nearly $1.4 million per job.

This appears to be the IEDC strategy going forward. In the last 18 months, the agency said it has secured future capital investment of $55 billion with hints of more to come before year’s end.

Gov. Eric Holcomb predicts that money surging through the state should raise Hoosier incomes.

“Knowing what we’re seeing in the pipeline, those wages could even be elevated even more than they are right now and through the IEDC’s numbers, we could catch and surpass that national (average) as well,” Holcomb said.

Erin Sweitzer, IEDC VP of External Communication added the agency is laser-focused on increasing high-wage career opportunities for all Hoosiers but points out, “IEDC closes an average of 240 deals a year, while thousands of other deals are happening across the state without our involvement – all contributing to Indiana’s per capita income.”

But again, on that foundational goal of growing per capita income to the national average has fallen far short of the mark, to the dismay of the man who led the creation of the IEDC.

“It’s not good enough,” and Daniels added, “It’s still the right goal.”

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