Maureen Groppe, writing for Gannett has a good article entitled Income inequality study finds gap widening in Indiana. Incomes for Indiana’s upper and middle classes did not grow over the past 30 years as much as they did for the nation generally. And, during that time, Indiana was one of seven states where the average income of the bottom quintile actually fell.
The average income for the bottom fifth of Hoosier households declined almost 7 percent ($1,378) since the late 1970s. Average income for the top fifth grew 57 percent ($53,906). The average income of the middle fifth grew 22 percent ($10,567).
One source cites the “skills gap” (about which, see) and the decline in manufacturing jobs. The departure of manufacturing jobs no doubt contributes significantly to the drag on Hoosier incomes, particularly at the bottom. It used to be, I gather, that if you had a basic education and followed some basic rules about punctuality and working diligently at your assigned task, you could do o.k. by yourself and your family. Now, I think we have a very difficult time articulating precisely what a person should learn in order to earn a stable, family-sustaining income. So, it’s not terribly surprising if people come up short on their education.
Our tax policy isn’t exactly helping either. We got rid of inventory taxes, capped property taxes and raised sales taxes. We are eliminating the inheritance tax and reduced the corporate income tax. This is particularly awesome if you are heir to a corporation that owns real estate and inventory. Doesn’t do as much for you if you are a wage earning renter that buys stuff.
A textbook example of conservative women voting against there own best interest.
Liberals fought for decades to win them the right to vote. And they turn around and vote for less pay for themselves.
Go figure.
Good post, Doug. Indiana has in place a regressive tax system. Elections have consequences. Wealth is being redistributed upwards.
But your larger point that Americans always believed that if you had a basic education, showed up every day and did your work, you would get the two chickens, the two cars, and a ten-cent version of the American Dream. That vision has become much dimmer.
I wonder, though, given the ahistorical nature of Americans, our delusional optimisim, and our myth wallowing nature gave us a passing dream in the economic reality of time, place and circumstances. The post-WWII boom in America was probably unparalled in recent history. The US emerged victorious and with an entact manufacturing base and infrastructure when the rest of the world was devastated and denuded. Through the remarkable machine of the Marshall plan, we rebuilt much of the developed world with our factories, our capital, and our hands. The future looked bountiful.
But nothing lasts forever and it is never different “this time.” I believe that the post-war boom was unique and very fortitous. Reversion to the mean is always the message. It was good while it lasted.
Reminds me of the days of my youth–a long long time ago. Many of my high school classmates took their high school education and went right to work with only investment in their lunch pail. After 2 college degrees I found out they were making more per year with better fringe benefits than I achieved. My wife who prepares taxes has commented many times over the years at the income level of some of her clients in comparison to what our family was making. Time marches on—– and Indiana has not kept pace even with all the favorable actions.
“Doesn’t do as much for you if you are a wage earning renter that buys stuff.” The last sentence in your post hits the nail on the head. The under educated in Indiana keep getting hammered with rising energy prices, local governments that are trying to raise taxes and lower wages and benefits. While the big to medium size businesses are getting tax breaks to relocate or do business in their communities. I cringe every time I hear a politician or energy (gas, water,electric, etc) executive (mostly Republicans) state it is only an extra $120 a year to a family of four, when they talk about tax or energy increase. They have no idea how it hurts the working class poor and the retired people on fixed incomes.