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EYE ON THE PIE: County income disparities are growing

June 2, 2008

The income disparities among Indiana's 92 counties have been growing for decades. My imperfect memory recalls no administration and no candidate that has addressed the issue.

In 1970, Marion County led the state in per-capita personal income (PCPI), at 115 percent of the state's average. At the same time, Owen County was just 66 percent of that average. Thus, the average Owen County resident had income that was 57 percent of the level enjoyed by the average Marion County resident.

Since then, the situation has gotten worse. In 2006, the latest year for which we have data, Boone County led all counties, with PCPI at 144 percent above the state average, and Starke County trailed at 67 percent of the state's figure. Now the poorest county has but 47 percent of the income of the richest county.

There are other ways of demonstrating that the PCPI gulf is widening among the counties of Indiana. In 1970, 23 counties were at or below 85 percent of the state average; by 2006, 33 counties were in this low group. At the same time, there were no counties above 115 percent of the state's average in 1970, but, by 2006, six counties were in this higher group.

Five of these six higher-income counties (Boone, Hamilton, Hancock, Porter and Marion) had been among the PCPI leaders in 1970. Only Dubois County jumped from below 100 percent of the state average to a figure greater than 115 percent above that average. Alternatively, six of the 18 counties above 100 percent in 1970 fell below that level by 2006. Plus, 17 of the 51 counties between 85 percent and 100 percent dropped below the 85-percent mark.

That's a lot of numbers to make the point: The income disparities among Indiana counties have been increasing over the past three and a half decades. It's not a function of which political party is in office. It's a function of which philosophy is in power.

The practice of our state has been to facilitate the location of companies where those firms choose to locate. In the 1980s, when Subaru wanted to locate in Tippecanoe County, were they offered greater incentives to locate in Lake or Vigo counties? More recently, when Honda was busy searching for a site, did the state encourage location in Anderson rather than Greensburg? If so, I don't know about it.

Without belaboring the point, our larger, more industrialized counties have been losing out to suburban and rural locations. The result is a steady decline in the urban core of our state, an expensive decentralization of economic activity, and a dissolution of community identity. Urban infrastructure is allowed to languish, while new facilities are built at great expense, despoiling farmland.

Sometimes it is no more than the loss of one or two major employers that leads to the decline of a community. Examples can be found in Miami County, which dropped from 31st in PCPI in 1970 to 88th by 2006; similarly, Cass County fell from 17th to 56th, Randolph from 26th to 75th, Henry from 41st to 66th, Howard from eighth to 22nd, Lake from seventh to 25th, Allen from sixth to 19th, and Elkhart from second to 18th.

Where are the environmentalists who often fight to save patches of greenery but rarely join the struggle to redevelop brownfields? Why don't local leaders (public and private) push the state to reconsider its economic development practices?

Without such a reconsideration, our pockets of plenty will become more separated from their declining neighbors.



Marcus taught economics for more than 30 years at Indiana University and is the former director of IU's Business Research Center. His column appears weekly. He can be reached at mmarcus@ibj.com.
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