News From Terre Haute, Indiana

September 5, 2013

MARK BENNETT: Even Marty McFly wouldn’t want to go back to those paydays

Mark Bennett
The Tribune-Star

TERRE HAUTE — Reliving the 1980s may sound tempting.

Ah, simpler times. Then again … hair styles as big as mushroom clouds, “Miami Vice” jackets, the trickle-down theory, New Coke, Yugos.

OK, “Back to the Future”-style nostalgia obviously has its limits. After all, most people would hope their incomes, adjusted for inflation, have changed — for the better — since the days of “Where’s the beef?” and “Whip It.”

But, alas, the paychecks of thousands of Hoosiers and Hauteans should carry a Memory Lane address.

The average Vigo Countian enjoys a standard of living equal to that which the rest of the nation experienced, on average, in 1986.

1986. Chernobyl happened that year, and Geraldo Rivera opened Al Capone’s worthless vault.

Twenty-seven years later, a new study by Ball State University’s Center for Business and Economic Research analyzes per-capita incomes of Indiana residents in 2010. The researchers adjusted those numbers for inflation and assigned each county a year in which that county’s present standard of living corresponds to the average standard of living nationally. In most places, Hoosiers’ income levels stand a couple decades behind Americans elsewhere. The state’s average 2010 income of $34,042 matched the national level of 1996, according to BSU’s report, “The Causes of State Differences in Per Capita Income: How Does Indiana Fare?”

Vigo County, with a $30,612 average per-capita income rate, lingers a decade behind even most Hoosiers. So does Vigo’s neighboring counties of Parke (1982), Sullivan (1983), Clay (1984) and Greene (1986). Vermillion lives in comparatively robust 1994.

As the study’s lead researcher, Michael Hicks, explained the numbers by telephone from Muncie, he quipped, “I’m calling you from 1984.”

Muncie and Ball State lie within Delaware County, where average incomes are an ’84-ish $29,565.

Hicks, director of the research center and economics professor at BSU, emphasized that the income figures include caveats. The numbers are skewed a bit in counties with large Amish populations, big farms (where incomes may not reflect wealth) or thousands of low-earning college students. Still, those variables only slightly move the needle. LaGrange County in northeast Indiana, for example, is home to lots of self-sufficient Amish folks, the state’s lowest per-capita income at $19,938 and a standard of living last seen nationally in 1964.

“For LaGrange County, [the Amish variable] probably moved them from 1972 to 1964,” Hicks said.

That year, 1964, is significant. It marks the last time incomes in Indiana equaled the rest of America. Since then, the standard of living in Indiana has solidly improved (today, it’s twice that of 1960s families), yet the gap between Hoosiers and residents of other states has widened. Indiana ranked 40th in per-capita income in 2010, 30th in 1980, and 21st in 1950.

The routine response to low wages in this community and state is, “Well, the cost of living is much lower here. It all evens out.”

Sort of.

Housing and many commodities do indeed cost less, Hicks said, but those don’t necessarily translate into a higher standard of living. After an Indiana Chamber of Commerce official, interviewed on NPR’s State Impact Indiana, dismissed the low-income issue raised by the Ball State study because of a low cost of living in the state, Hicks countered in a response to the Tribune-Star. Hicks used Muncie’s situation as an example.

“Muncie is routinely labeled as one of the most affordable housing markets in the country,” Hicks stated. “Given the Chamber’s enthusiasm at that ranking, you’d suppose there’d be a rush to move here. There is not; the housing prices are low for the simple reason that the market for real estate in Delaware County leads to low prices. That is directly linked to the desirability of the community.”

Indiana saw more of its population move out (15.2 percent) than move in (14.7 percent) between 2004 and 2010, according to the study. A reversal of the trend requires patient determination to improve the quality of life in places such as Terre Haute, Muncie and Kokomo, Hicks said. Public policy initiatives help, but they take years to yield results.

Instead of hinging hopes for economic development on landing a huge factory with thousands of jobs, communities can see reliable dividends from investing resources in local schools, parks, trails and early childhood education programs, Hicks said. Improvement in the homegrown portion of Indiana’s labor force must begin in the preschool and K-12 levels. Retaining Hoosier college grads, and luring those from other states, means Indiana, Terre Haute and other communities must invest in quality-of-life amenities. Increasing the number of residents with high-demand skills will draw employers and raise incomes.

Terre Haute has room for improvement. The Ball State report assigned A-to-F grades to various categories for each county. Vigo’s report card: human capital education (C-minus), human capital health (C-minus), government impact and economy (D) and arts-entertainment-recreation (A).

“If you wish to be a prosperous community in the future, you’re going to have to be a community that attracts prosperous people,” Hicks said. “And I’m not talking about a yuppification.”

Yuppies are so 1980s, anyway.



Mark Bennett can be reached at 812-231-4377 or mark.bennett@tribstar.com.