Unemployment and Labor

Indiana incomes rose in 2010 despite jobless rate

March 24, 2011

Indiana residents' personal income grew at one of the fastest rates in the nation last year despite the state's 9.1-percent unemployment rate, according to a Bureau of Economic Analysis report.

The report released Wednesday showed personal income in the state increased 3.68 percent, from $218 billion in 2009 to $226.5 billion in 2010, making Indiana eighth in the nation in income growth and the leader in the industrial Midwest. The only Snow Belt state to surpass Indiana was New York, which saw 4.1-percent growth between 2009 and 2010.

However, Indiana stayed put at 41st in the rankings for per-person income despite the substantial growth in total income. The average per person income was $34,943 last year, up 2.6 percent from $33,912 in 2009, based on STATS Indiana's breakdown of BLS figures. That puts the state $5,600 below the national average for that category.

Willard Witte, co-director of the Center for Econometric Model Research at Indiana University, told the Indianapolis Star the BLS numbers show an income split between the educated, working class and the unemployed. The $8 billion climb in income while the state labor force shed jobs suggests higher salaries have been going to white collar workers.

That split has prompted many discouraged workers and unemployed people to go back to school and improve their skillset in the hopes of finding good jobs.

"Clearly there's been a tendency for people in the professions, people with more education, for a long time to have done better," Witte said. "For people at the bottom, even if they are working, they haven't been gaining ground."

The report also showed that many of the people who dropped out of the labor force could have retired because pension fund and Social Security Administration payments increased by more than $1.5 billion in Indiana over the past year.

But Witte said a $1 billion increase in income for farmers and owners of unincorporated start-up companies was a positive sign for the state.

"It certainly indicates that people who run their own businesses are doing OK. And we might be seeing a lot of startups," he said.

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