News From Terre Haute, Indiana

July 15, 2013

Report: ‘Working families’ worse off

One out of three Hoosiers is now in low-income category

Maureen Hayden
CNHI

INDIANAPOLIS — While Indiana is enjoying a surplus of funds, many of the state’s working families are having a tougher time making ends meet, according to a new report issued by an anti-poverty advocacy organization.

The report found this sobering fact: Only five other states have seen a bigger increase in the number of people who are officially “low income” since the recession began in 2007.

In the report, the Indiana Institute for Working Families found that about one out of every three Hoosiers is now in that low-income category — which translates into $22,980 for an individual or $47,100 for a family of four.

The report also found the poverty rate increased in Indiana from 2010 to 2011 – the latest data available – meaning about one in six Hoosiers is living on less than $11,000 a year.

While some parts of the state have seen a recovery from the recession, statewide there’s still plenty of pain. According to the report, poverty rates have increased for Hoosier children, with almost 46 percent of Hoosier children now living in low-income families.  

The report notes that Indiana’s unemployment rate has remained above the national average for much of the last year, topping off a decade that saw declining earning power. The state’s median family income dropped to $57,148 in 2011 from $78,599 in 2000 -- the second largest decrease in the nation, according to the report’s authors.

“What we know generally is that Indiana families are falling behind,” said Derek Thomas, a policy analyst with the institute.

Thomas said the last 10 years have been the “lost decade” for many Indiana families. “Especially the people who are just hanging on, who’ve been trying to get into the middle class, they’ve really fallen down,” said Thomas.

In May, the Indiana Chamber of Commerce released a report that contained similar numbers. It found, for example, that Indiana had the 12th lowest poverty rate in the nation in 2000, but that it dropped to the 34th lowest poverty rate by 2011.

The Institute for Working Families report found grim indicators that show how tough it is for families to recover from the recession’s economic hit. For example, about 70 percent of new jobs in 2011 – many in the service industry – paid full-time wages that aren’t enough to pull a worker out the low-income category.  

The report’s release came this week came within days of state officials’ announcing a rosy fiscal picture for state government. Indiana Auditor Tim Berry and Gov. Mike Pence announced Thursday that the state ended its fiscal year on June 30 with a structural surplus of $483 million — $93 million more than had been projected in the budget the legislature passed in April. The state also now has reserves of $1.94 billion.

“The balance sheet of Indiana is strong and growing stronger,” said Pence said, who predicted the state’s sound fiscal status will lead to more prosperity by attracting job-creating businesses that see the surplus as a selling point for the state.

But critics, including Democratic legislative leaders, said the state’s surplus comes at a time when the state is hurting in other areas.

House Minority Leader Scott Pelath of Michigan City, said in a statement that “the leaders of our state worship these surplus numbers like they are ends in and of themselves. … Families still are struggling to keep their heads above water.”

One topic upon which Pelath and Pence agree is the need to close the skills gap in Indiana, and the Institute for Working Families’ report weighs in on that issue, too. The report found a majority (54 percent) of all jobs in Indiana are still “middle-skill” jobs – often requiring less than a four-year college degree but more than a high school degree. But only 47 percent of Hoosier workers have the appropriate skills and credentials to fill those middle-skill jobs.



Maureen Hayden covers the Statehouse for CNHI, the Tribune-Star’s parent company. She can be reached at maureen.hayden@indianamediagroup.com.