Report: As Hoosier Economy Improves, Wages Remain Flat

Indiana’s unemployment rate sits near the national average at 5.7 percent, but the number of low-income Hoosier families is on the rise. That’s one finding of a report released last week by income issue think-tank the Indiana Institute for Working Families. 

The Status of Working Families report analyzes the current state of Indiana’s post-recession economy.

It finds that while the state’s unemployment rate has fallen and stabilized from its peak of around 10 percent in 2009, the incomes associated with the jobs gained since then don’t meet pre-recession levels—by a lot. For example, Indiana’s inflation-adjusted median household income is about $8,000 less than in the year 2000, says Institute Policy Analyst Derek Thomas.

"Median household income, twentieth-percentile wages—so right around poverty level—, hourly wages is down more than 80 cents," Thomas says. "That’s a significant hit to the pocketbooks of Hoosiers."

Thomas says a poverty-rate increase of about four percent has accompanied the wage decline, while the percentage of middle-wage earners has decreased by about eight percent.

"So, the people above 200 percent of the federal poverty line—so mid to high-wage earners—that number is declining," Thomas says. "It sort illustrates that hollowing out of the middle class that we hear about." 

The report calls on lawmakers to enact policies that its authors say would grow the middle class. Those include a minimum wage increase, a graduated income tax and an increase to Indiana’s Earned Income Tax Credit.