What Northeast Indiana Business Leaders Must Understand about Regional Income Growth
Increasing Economic Prosperity for Residents Requires Wage Increases
November is one of my favorite months of the year. With the Thanksgiving holiday and the release of per capita personal income (PCPI) data, November gives us a moment to set aside time to recount the blessings in our families, friends and our strong regional economy.
In 2012, just six years ago, my granddaughter was born in Fort Wayne the day before Thanksgiving. I recall sharing a plentiful carry-in dinner with our families around a hospital dining room table and marveling at the miracle of life often taken for granted.
Coincidently, that same year, I expressed appreciation for the huge strides forward in Northeast Indiana’s collaboration, another important factor in our region’s success that can be often overlooked.
I cited “economic development” as a noble endeavor of community leaders, partners and economic professionals alike, seeking to better lives and the places in which we live and work. That’s why we as economic developers exist. It’s our mission. We’re here to increase the prosperity, and income, of residents in the region.
It’s been a long road, and we’ve experienced achievements along the way.
Of particular note, 2012 marked a historical milestone of economic significance which is not lost on me yet today. I wrote, “Despite the great recession and numerous naysayers, the counties of Northeast Indiana reported that we have turned the corner to raise per capita income, the first time in almost 20 years.”
Here we are six years later still making substantial progress.
In a Nov. 15, 2018 news release, the Bureau of Economic Analysis (BEA) reported that PCPI in our region’s 11 counties grew at 3.3 percent. Although we did not keep pace with the national rate, this annual growth rate is the strongest growth we have experienced in recent years.
While the growth rate is strong, Northeast Indiana's PCPI was 82.4 percent of the national PCPI in 2017.
Here are some additional noteworthy facts that may be buried but should not be overlooked.
- Fueling the PCPI growth is a strong increase in average wages throughout the region.
- Since 2012, the region's PCPI has kept pace with the national increase by a total of 15.9 percent.
- On average, PCPI increased by $1,371 per person, increasing to $42,545 throughout 2017.
- LaGrange County achieved the lead growth rate in PCPI at an impressive 5.1 percent. Allen, Huntington, Kosciusko and Steuben also beat the region's average. Click here to see a list of results from all 11 counties.
- This increase in wages accounts for more than $33.2 billion of total personal income circulated in the region’s 11 counties in 2017. That was an increase of $1.2 billion of total personal income compared to 2016.
An important fundamental that cannot be overlooked by business and community leaders is the significance of increased average wages for residents in the region, which directly led to increased PCPI in 2017.
Source: U.S. Bureau of Economic Analysis (BEA) and Purdue University Fort Wayne Community Research Institute
“The most available mechanism to increase Northeast Indiana’s per capita personal income is to increase private-sector wages," says Rachel Blakeman of Purdue University Fort Wayne Community Research Institute. “Northeast Indiana’s history of low wages presents a challenge for attracting the skilled workforce we need. Our low cost of living only goes so far. A competitive wage is critical for talent attraction, and ultimately, talent retention.”
All in all, 2017 was a very good year with substantial progress for our region’s economic growth. And yet, this is also a reminder that our work is not done. Our clear objective is to increase PCPI and average wages faster than the nation.
Check out Forbes' most recent “Best States For Business” annual analysis. Indiana falls just shy of a “top ten” finish at number 11. Our state achieves high scores in business costs, regulatory environment and quality of life. The stark downside is labor supply where, at our very best, Indiana is ranked way back in the pack at No. 42. This deserves our most urgent attention and focus.
I cannot leave it unsaid that we are in a national and global war for good jobs. Today’s battleground is all about developing, retaining and attracting skilled talent. We must confront and embrace the reality that competitive wages are our key to winning strategies for PCPI.
Can we do it? Without hesitation, yes, we can. As others have done it before us, so must we, for the future generations of the residents of Northeast Indiana.
We can. We must. We will.
Want to learn more about why PCPI is important to the region's economic growth? Read the press release with more details.Read More