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The Journal Gazette

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Monday, November 27, 2017 1:00 am


A narrowed gap

Pay catching up to area's reinvention

There has been some good news this month on northeast Indiana economic growth. But the long battle to make this area once again competitive on wages and salaries is far from over.

Bear with us as we plow through a few numbers – some good, some not so good.

Per capita income last year increased over 2015 in eight of nine northeast Indiana counties, according to estimates by the Bureau of Economic Analysis. And, The Journal Gazette's Matthew LeBlanc reported, data from the Indiana Department of Workforce Development show unemployment down from 3.6 percent in October 2016 to 3.1 percent last month in the Fort Wayne metropolitan statistical area of Whitley, Wells and Allen counties.

Though per capita income in the region still lagged behind statewide and national numbers, the MSA's unemployment numbers were better than both the state and national rates. This is all encouraging news, of course.

But as The Journal Gazette's Sherry Slater wrote, wage rates in the region are only 82.4 percent of the national average.

While more people who want jobs are finding them, their individual and family earnings are still far too low, and that's been true for years. In a look at regional economic trends in the period 2001 to 2015, the IPFW Community Research Institute reported earlier this year that Fort Wayne's per capita income, which comprises individual earnings from all sources, tied for the slowest growth within 13 comparable Midwestern metropolitan areas. It was also almost 10 points lower than the 51 percent average growth in all U.S. metropolitan areas.

It's tempting to dismiss Fort Wayne's longtime struggle to raise wages as overblown, because the cost of living is low here. In an oped piece last July, Rachel Blakeman and John Stafford, the current and former directors of the research institute, explained why that “is not an equal trade.”

“The Bureau of Economic Analysis' Regional Price Parity tool for 2015 puts the distance between the buying power of Fort Wayne's metro wages for goods and services and Des Moines' at about 5 percent, yet Des Moines (Iowa)  residents on average make about 23 percent more than we do,” they wrote. So even though a Fort Wayne worker's dollars go further, there are fewer of those dollars to spend. The danger, as Blakeman and Stafford argued, is that if wages aren't truly competitive over the long haul in Fort Wayne, the skilled workers we so badly need to keep in order to grow as a region could be lured away.

We have to move faster to catch up, and in more recent years, that appears to have happened. In its review of area economic trends prepared for the Allen County Council in May, the research institute found that since the end of the recession, between 2009 and 2015, per capita income in the Fort Wayne area grew 22.8 percent – which was the fourth-largest increase among comparable Midwestern metropolitan areas, including South Bend and Indianapolis; Kalamazoo and Grand Rapids, Michigan; Des Moines; Toledo; and Dayton.

It can't be coincidence that those increases came at the same time Fort Wayne's efforts to reinvent itself by remaking its downtown, its riverfront and other areas slipped into high gear.

Wages remain key, but there are good jobs available that could raise those numbers if we can attract, train and retain the workforce to fill them.

So there are compelling reasons to care about all these dry statistics, and not to conclude that a year's worth of better numbers means we can ease up on efforts to improve education, training and quality of life in our region.