Northwest Indiana continues to face a number of challenges when it comes to maintaining economic growth, according to a new analysis.
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Aside from the loss of high-paying manufacturing jobs, the area is also suffering in top 10 growth sectors, where employers have added jobs that pay significantly less than the national average.
Indiana University Northwest economics professor Micah Pollak and finance professor Bala Arshanapalli developed a new economic index to provide the public and policymakers with information on economic forces affecting the area’s economy.
Pollak presented the findings — the Northwest Indiana Coincident Economic Index — Tuesday afternoon at IUN in Gary.
In order to maintain economic growth, policymakers will need to examine how to attract higher-salary services i.e. “knowledge-based” jobs in addition to manufacturing, he said.
Developing a better-educated workforce should also be a top priority, he said.
“Up until now, it’s been, ‘(let’s) bring in another factory,'” Pollack said following his presentation. “That’s not going to cut it anymore.”
With an economy roughly the same size as Vermont, Northwest Indiana made up 4.6 percent of the Chicago metropolitan GDP — $29.9 billion in 2017, according to the report.
The index examines four factors in Lake, Porter, Jasper and Newton counties to estimate economic growth — steel production, total employment, retail sales and average manufacturing hours.
Citing statistics from the U.S. Department of Labor’s Bureau of Labor Statistics, Pollak’s analysis showed the fastest growing replacement service sectors had average salaries well below the national average.
Those sectors included food services (25 percent), ambulance services (7 percent), social assistance (11 percent), professional and technical services (45 percent), educational services (33 percent), administrative services (24 percent), management (22 percent), nursing and residential care (11 percent) and food and beverage stores (23 percent).
Between 2007 and 2015, the analysis found, the area’s top seven declining job subsectors lost 8,670 jobs — specialty trade contractors; amusements, gambling and recreation; government, machinery manufacturing, professional and technical services, merchant wholesalers, and primarily metal manufacturing. Average salaries were $51,618.
During the same time, the top seven growth job subsectors added 7,766 jobs in ambulances, food services, retail, drink and tobacco manufacturing, food manufacturing and truck transportation. Average salaries were $34,242.
Driven partly by the loss of higher-wage jobs, per capita income in Northwest Indiana declined by .7 percent to $42,416 in 2017.
It declined by $4 per year in Northwest Indiana between 2009 and 2017. By comparison, per capita GDP increased by $567 per year (1 percent) in the United States and $757 per year in Indiana during that period.
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