Area lags in wage growth

January 15th, 2018

In decade, earnings rise 16% here, 19% state, 22% US

By Sherry Slater | The Journal Gazette

Workers in northeast Indiana are falling further behind their peers in other states.

They even lag in earnings gains made in other Indiana regions, according to data Northeast Indiana Works released Friday. 

Wages and benefits failed to keep pace with the 18 percent rate of inflation over the past 10 years, according to the region's nonprofit workforce development organization.

During the same period, from 2007 to 2017, earnings in northeast Indiana increased by 16 percent.

That compares to an average state increase of 19 percent a national increase of 22 percent.

All earnings – or wages and benefits – included in the report reflect those paid by industries to full- and part-time workers. They also include the self-employed. But the incidental income of anyone who isn't working wasn't included in the calculations because it would have skewed the averages.

Average annual earnings in northeast Indiana were $48,064 at the end of that period, according to Emsi, an Idaho firm that specializes in labor market information using federal data.

For comparison, the average Indiana earnings last year were $53,140, and average national earnings at the end of 2017 were $63,122.

Edmond O'Neal, president of Northeast Indiana Works, is concerned the trend hurts northeast Indiana's competitiveness. Retaining and attracting workers are priorities for economic development officials.

Northeast Indiana's application for a $42 million Regional Cities Initiative grant included projects designed to make the area more attractive to young, talented workers. The Road to One Million plan set a goal of increasing the region's population to 1 million by 2030.

O'Neal said lagging earnings could undermine those efforts.

“To keep talent here and attract top-notch workers from elsewhere is dependent on a lot of factors, not the least of which are wages and benefits,” he said in a statement. “The spending power of our workers has been going in the wrong direction, and that impedes our ability to keep workers here or lure workers from other areas of the country.”

Manufacturing, which employs a higher percentage of northeast Indiana workers than any other industry, contributed to the imbalance. In the region, 82,800 people work in factories.

Although their annual earnings of $65,721 were higher than the region's average of $48,064, the 15 percent increase over the 10-year period pulled down the region's average gains.

Nationally, manufacturing earnings increased 22 percent to an average of $81,248 a year.

Earnings growth in at least one northeast Indiana industry surpassed the national rate, however. Health care earning increased 26 percent in the region. The national increase was almost 20 percent.

Even so, the 50,878 health care workers in the region earn less, on average, than their national peers – $53,671 compared to $57,933.

O'Neal, of Northeast Indiana Works, isn't satisfied with the progress.  

“While we have seen some employers raise wages and enhance benefits in response to low unemployment and a corresponding dearth of workers,” O'Neal said, “the fact that workers' earnings generally across the board have not kept up with inflation suggests that more improvement needs to take place.”

Categories Regional Leadership