2016 Census shows rising tide in Indiana, but some boats still anchored underwater

By Andrew Bradley, Amy Carter, Jessica Fraser and Erin Macey
Photo credit: © Copyright Donald Bain and licensed for reuse under this Creative Commons License
New Census data show that 2016 was overall a year of gains for Indiana, making incremental progress on the long-term task of reclaiming its pre-recession status. Indiana’s gains are a partial reflection of the national recovery as U.S. incomes finally pulled above their previous  high in 1999. The U.S. also saw rare year-on-year improvements in poverty and health insurance coverage. And while Indiana didn’t match these highs, it did see areas of encouraging gains, including a strong single-year rate of increase in median household income and a decrease in child poverty. However, several troubling indicators show where Indiana must focus now: a poverty rate that did not significantly improve (and a poverty ranking that worsened four spots in just one year), racial income and poverty disparities, and a gender pay gap that actually widened, making Indiana’s gap the 6th highest in the United States.

Poverty: While the U.S. saw a second straight year of significant poverty decrease, Indiana did not match this accomplishment. Despite near-record lows in unemployment, improvements in Indiana's poverty rate stalled out in 2016. Nationwide, the official poverty rate in 2016 was 12.7%, down 0.8% and with 2.5 million fewer Americans living in poverty than in 2015.[1] And while the number of Hoosiers living in poverty decreased to 906,077 or 14.1% in 2016, the decrease was within the margin of error compared to 933,181 or 14.5% in 2015, after seeing a previous significant decrease from 15.2% in 2014.

However, larger improvements in other states meant that Indiana’s poverty ranking worsened four spots in just one year, from the 26th-highest poverty rate in 2015 to 22nd highest in 2016. Poverty also remained flat in Ohio and Kentucky in 2016, while Michigan and Illinois saw a significant decline in the poverty rate. Among our neighbors, only Illinois had a lower poverty rate than Indiana. Several discrepancies among Indiana’s neglected and more vulnerable populations point to potential reasons for our post-recession progress on poverty stalling out:
  Hoosier family-level poverty decreased significantly overall, but saw mixed results when broken out by family type. Single moms with children under 18 saw a significant decrease in poverty, from 43.2% in 2015 to 39% in 2016. But poverty for married families remained flat, with a non-significant increase from 4.3% in 2015 to 4.5% in 2016.
  Child poverty decreased significantly from 20.9% in 2015 to 19.5% in 2016. However, Indiana remained 21st-highest in child poverty rankings compared to other states.
  The percentage of seniors (age 65+) in poverty increased from 7.2% in 2015 to 7.7% in 2016, 40th highest among all states. While the change over the past year was not statistically significant, the increase from 2014’s rate of 7.0% is significant.
  Both male and female poverty rates declined, with the gap narrowing between the two.

Economic Self-Sufficiency: Beyond the simple poverty metric, fewer Hoosiers lived below 200% of the poverty threshold (a basic measure of economic self-sufficiency) in 2016 than in 2015. In 2016, 2,086,942 Hoosiers were low-income by this measure, or 32.4% of the state’s population (compared to 2,142,960 or 33.4% in 2015). The rate of almost 1 in 3 Hoosiers unable to afford basic costs is still way too high but we also saw major improvements. Indiana likely saw a bigger decline in this ‘low-income’ metric than it did in actual poverty, meaning more Hoosiers moved from between 100% and 200% of poverty up, than moved out from under poverty itself. [2]

And despite continuing signs of improvement, the percent of low-income Hoosiers is still above pre-recession level of 29.6% in 2007. Since 2005, basic costs have increased 60% for Hoosier families with children while wages have increased only 9%. Among these costs, housing insecurity is a particular concern, especially for those below self-sufficiency. In 2016, 46.1% of Hoosier renters paid more than 30% of household income on rent, a key measure of housing burden. While this ratio is less than 47.8% in 2015, the small change points to the need for effective policy action to support self-sufficiency for low-income families.

Household Income and Pay Gaps: Indiana had a good year for household income working incrementally back to pre-recession levels, but the gains were thinner at the bottom and some racial and gender gaps widened. Indiana’s median household income increased to $52,314 in 2016 from $50,896 in 2015. While all of the state’s neighbors saw a significant increase, Indiana’s gain of 2.8% was the largest. This was also the 17th highest gain among states, and beat the U.S. average rate increase of 2.4%. Another encouraging stat is that in 2015, 49.1% of Hoosier households earned less than $50,000, while in 2016, that proportion was down to 36.9%. However, Indiana’s median household income is still the lowest among all neighbors (except Kentucky) and retained its ranking of #36 nationwide. And despite the 2016 increase, Indiana's incomes haven't recovered from the recession, and are still down  $2,616 from 2007 (in 2016 dollars). [3]

The seeming incongruity between a rising poverty ranking and strong median household income growth in 2016 can be partially explained by discrepancies in growth among income levels and by race and gender. The uneven growth of Hoosier incomes is evident among income quintiles – the largest gains were for households in the third income quintile (the middle 20% of earners) where both the mean & upper limit of quintile grew about 3% (in real dollars). However, there was only a 0.5% income growth for the poorest 20% of households. Every other quintiles’ growth was about the same.

Strikingly, Hoosiers experienced a widening gender and racial pay gap in 2016. Indiana saw a 2 percentage point increase in the gender pay gap among full time, year-round workers - from 24% in 2015 to 26% in 2016 - even as the U.S. gap declined. Men saw a $2,065 increase in median earnings over 2015 while women’s earnings climbed only $687. The annual difference in wages between full time working Hoosier women and men is now $12,717. Indiana now ranks 6th in the U.S. for highest gender wage gaps (up from 12th-highest in 2015), and has the highest pay gap of our neighbors, with Ohio at 23%, Michigan at 22%, and both Illinois and Kentucky at 20%.

Median earnings were up for White & Latinx men and women, but down for Black & Asian men and women in 2016. Biracial men gained, but biracial women saw a decline.

Health Insurance Coverage: Another bright spot for Indiana in 2016 was the continuing trend of higher health coverage due to the state expanding Medicaid under the Healthy Indiana Plan (HIP2.0). The percentage of Hoosiers with health coverage increased to 91.9% in 2016, up significantly from 90.4% and from 88.1% in 2013, also a significant change. 530,000 Hoosiers, or 8.1% of the population, remained uninsured in 2016, down significantly from 9.6% in 2015 and from 14.0% in 2013, also a significant change. In addition, in 2016 only 5.9% of Indiana children under 18 remained uninsured, down significantly from 6.7% in 2015 and from 8.2% in 2013, also a significant change. From 2013-2016, nearly 373,000 Hoosiers gained health coverage. Because health insurance is a key factor for economic self-sufficiency, the clear takeaway is that Indiana’s policymakers should not support any change to health care policies that threatens these significant improvements.

Educational Attainment: Indiana showed positive gains in educational attainment with a decreasing rate of adults 25 and older with a high school education but no diploma, from 8.0% in 2015 to 7.9% in 2016. Indiana also saw an increasing educational attainment rate for adults 25 and older with at least some college (from those with some college but no degree all the way to PhD earners), from 53.9% in 2015 to 54.6% in 2016. There was a decline in the ratio of adults with a high school diploma or equivalency – from 34.3% in 2015 to 33.7% in 2016, but this may be due to a higher proportion with at least some college education. State policies to provide better tuition support for higher education seem to be paying off, but work is not done to remove non-academic barriers for adult students. Only 87,857 (or 9.7%) of Indiana’s impoverished population was enrolled in post-secondary education in 2016, suggesting Indiana must do more to reach low-income students and support their efforts to pursue family-sustaining career pathways.

The safety net: Over the last few years, Indiana has seen decreases in the percentages of households using the Supplemental Nutrition Assistance Program (SNAP). In 2013 the rate was 13.1%, and in 2014 it was 12.8%. The new data follow this pattern, showing a statistically significant decrease from 11.5% in 2015 to 10.8% in 2016. While reductions in SNAP numbers are welcome as a result of poverty decreasing, it is important to measure the success of the program based on how many people it helps lift out of poverty, not on how many people are dropped from the rolls. With a statistically flat poverty rate, this significant decrease in SNAP raises questions about how Indiana administers safety net programs and policies.

On the whole, the new Census data show that a rising national tide is now lifting many boats in Indiana, but certain groups remain anchored below water. Unfortunately, stagnant poverty rates and incomes for the poorest Hoosiers are not going away on their own, neither are gender and racial gaps closing themselves. In order to see improvements, state policy must address the systemic barriers some groups of Hoosiers experience that are holding them back even as others see gains. But the good news is that Indiana has a history of solving problems when we give them attention, as has happened with our consistently high ‘business-friendly’ rankings. When Indiana sets its mind on improving the economic status of low-income Hoosiers, it will see success there, too. 

[1] Note that the official national poverty rate is determined using the Current Population Survey, while state and local poverty data comes from the American Community Survey.
[2] However, this movement isn’t necessarily sequential - people who came out of poverty could have jumped well above 200%, and conversely people above 200% could have fallen all the way down below the poverty threshold due to individual circumstances.
[3] IIWF calculations of Census ACS data from 2007 and 2016.

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Friday, September 22, 2017

ACTION ALERT on Tax Reform

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Monday, September 18, 2017

This Labor Day, More Hoosiers Working with Weaker Voice, Less Pay than Neighbors

Andrew Bradley
Senior Policy Analyst

This Labor Day, Hoosiers are back on the job in record numbers - and the state needs only 75,900 more jobs to reach its pre-recession employment rate - but our hard work is less likely to be protected by union coverage, and our pay keeps slipping compared to our neighbors’, too. Hoosiers who have been left out of the national economic recovery should ask themselves why attacks on labor rights should be allowed to keep shrinking our paychecks, job quality, and families’ futures. 

Hoosiers do better when we band together to make our voices stronger - whether in the PTA, in ag & rural electric co-ops, or in collective bargaining on the job. But attacks on our rights to negotiate better deals at work have had a negative impact in recent years that can be seen in the declining rate of workers protected by union contracts. A new report by the Economic Policy Institute shows that only 11.4% of Hoosier workers have union coverage, down from 22.6% in 1989.  32% of Indiana’s public sector workers are covered (after years of attack), and a mere 8.5% in the private sector have union coverage following the so-called ‘right to work’ law. Indiana now has the lowest union coverage of any of our neighbors, including Kentucky.
This disproportionate lack of workers’ voice in Indiana is doubly a shame, because today’s unions are increasingly diverse and are one of the best routes for workers to secure guarantees for high paying, high quality jobs. EPI found that unions workers are more likely to have essential job benefits like employer-sponsored health insurance, paid family leave, paid sick time, and fair schedules. Unions have helped raise wages and standards for members and non-members alike. Nationwide, about two-thirds of workers age 18 to 64 covered by a union contract are women and/or people of color, and unions help close gender and racial wage gaps. More than half of union members have an associate degree, and two in five have a bachelor’s degree or more education. And in Indiana, a new generation of workers’ voice is bringing the spirit of social activism to counter Indiana’s restrictive state labor laws that go hand-in-hand with flagging incomes.
Indiana’s decline in union coverage and attacks on labor rights correlates with declining income rates. Hoosiers' incomes peaked in value in 1999 and haven’t been the same since. In fact, Advisor Perspectives labeled Indiana a ‘21st Century Loser’ in incomes, tied for the 9th-largest drop since 2000. This trend hasn’t abated since Indiana passed its so-called ‘right to work’ law in 2012. In fact in 2015, the same year Indiana repealed the common construction wage, Indiana’s median household income grew so little compared to other states that our income ranking dropped from 34th to 36th in the nation. Indiana now has the lowest median wages of any of our neighbors, including Kentucky. If there are benefits to undercutting Indiana’s labor standards, they aren’t showing up in the average Hoosier’s paycheck, or even in employers’ ability to find a skilled workforce. So why keep them?

Tired of Indiana falling behind our neighbors? Contact your state legislators and ask them to sponsor a study of the ‘return on investment’ of Indiana’s so-called ‘right to work’ law and other attacks on labor standards. Any laws that get in the way of Hoosiers standing together for higher wages and job quality should be terminated before next Labor Day comes around.

Note: the Indiana Institute for Working Families receives no funding from union or labor sources, but supports collective bargaining for workers based on data and principle.

Please donate to help us advocate for an Indiana economy that works for all Hoosier families!
Thursday, August 31, 2017

Dropping Pay Data Collection Removes a Vital Tool Needed to Promote Equality

Dropping Pay Data Collection Removes a Vital Tool Needed to Promote Equality 

The news that the Trump administration’s Office of Management and Budget issued a ‘review and stay’ of equal pay data collection is extremely disappointing. At last summer’s Republican National Convention, Ivanka Trump vowed that her father would fight for equal pay for women. However, this move diminishes the Administration’s ability to reach that outcome.

In September, the Indiana Institute for Working Families will publish a first-of-its-kind report on gender disparities in wages, wealth, and poverty. Comparing Hoosier men and women working full time, year round, our wage gap is 24 percent or $11,339. These earnings differences contribute to gaps in assets like home equity and retirement savings. Women in Indiana are also more likely to experience poverty. At the current rate of progress, Indiana’s gender wage gap is not projected to close until 2082.

The revised EEO-1 equal pay data collection form would have increased the speed at which we could close these gaps. At the Institute, we firmly believe that data can fosters productive self-reflection, dialogue, and action. This data collection tool - developed with extensive public input - was designed to both encourage large employers to reflect on their own pay practices and provide useful data to make the Equal Employment Opportunity Commission more efficient and effective. Now, it is less likely that either of those goals will come to fruition.   

Action is needed on multiple fronts to address gender and race-based wage gaps and their far-reaching consequences for families, communities, and our economy. Leading employers in Indiana and beyond have already recognized the importance of pay audits and addressing pay gaps; they know it is the right thing to do and that gender diversity boosts productivity. But not all employers will follow suit. The Administration’s decision to call a halt to this carefully considered, common sense proposal raises serious questions about its commitment to the economic well-being of Hoosier families and our economy.

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Trump Tax Plan Would Shortchange Indiana, Middle Class & Working Families (But Would Let Them Eat Cake)

Andrew Bradley, Senior Policy Analyst

The Trump Administration’s proposed tax plan would shortchange Indiana as a state, especially its middle-class and working families, while top earners would pocket a windfall. Although the administration hasn’t yet released full details of the plan, their public statements show that Indiana wouldn’t get its fair share of tax cuts, which would disproportionately benefit the nation’s very wealthiest and would likely be offset by damaging cuts to vital services.

A new analysis of the Trump tax plan from the Institute for Taxation and Economic Policy shows that Indiana would only get an 87% share of tax cuts relative to the state’s ratio of the U.S. population. This is the 23rd-smallest share among states. In part because the plan is aimed at high-income households and Indiana is a poorer state, no matter how you slice it, Indiana gets shortchanged compared to the average state by Trump’s plan.

Middle- and low-earning Hoosier families together really get the short end of the Trump tax stick, while the wealthiest earners profit big-league. Added together, the three low- and middle-earning quintiles (making up 60% of Indiana’s population) would only get 11.7% of the planned cuts, while the top 1% alone would take home 46.1% of the state’s share of tax cuts. The top 1%, all with incomes of at least $500,500 annually, would get an extra $95,940 each year (at $1,845, enough to pop the corks on three cases of Mo√ęt & Chandon champagne every single week). That $95,940 in additional cuts for the top 1% is more than nearly 80% of Hoosiers earn in a year. By contrast, the bottom 60% of middle- and working-class Hoosiers, all with annual incomes less than $64,000, would get just $410 per year on average (at $7.88 each week, barely enough for a small cake from Wal-Mart). So while the outcome of Trump’s tax plan would shower the wealthiest with luxurious benefits, it would lead to the destruction of the safety net that provides a measure of economic security for middle-class and working families. (But it would let them eat cake.)

The upside-down nature of the Trump tax scheme would only exacerbate Indiana’s regressive state tax structure, and would do nothing to improve inequality and stagnant incomes for the vast majority of Hoosier families. Indiana already makes the ‘Terrible 10’ list of most-regressive state & local tax systems that tax lower & middle-income residents at far higher rates than wealthy earners. Meanwhile, the same top 1% of earners who benefit most from Indiana’s regressive tax structure (and who would get the largest payoff from the Trump plan) already saw incomes grow by 86.9% since 1979. By contrast, the other 99% of earners - largely shortchanged by the Trump plan - saw their incomes grow by only 2.3% over that same time period. Even with outsized earnings at the top, Indiana had the fourth-lowest real median income growth since 2000.

Trump’s tax cuts wouldn’t come without strings attached. The tax proposal would cost at least $4.8 trillion over the next decade, and would mean higher government deficits, forcing a planned $1.85 trillion in devastating cuts in safety net programs, including $116 billion in cuts to SNAP alone. The puny share for middle & lower-earning Hoosiers would pale in comparison to gutting services that lift over a million Hoosiers out of poverty.

Hoosiers should call the U.S. Capitol switchboard at (202) 224-3121 to let Congress know that voting for Trump’s tax plan would be choosing benefits for the elite over standing with Indiana’s middle class & working families. Ask what they will do to make sure this damaging Trump tax plan never sees the light of day!
Photo credits: goo.gl/Z74jJa & goo.gl/q8jgqs

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Tuesday, August 15, 2017

ACTION ALERT: Indy Council to Vote Monday to #RaiseTheWage to $13 for City-County Employees

ACTION ALERT: Indy Council to Vote Monday to #RaiseTheWage to $13 for City-County Employees
The final vote on Proposition 92 will be August 14th at 7 p.m.

This coming Monday the Indianapolis City-County Council will take a final vote on Proposition 92, which would raise the minimum wage for City-County employees to $13 per hour. The vote will come after Mayor Joe Hogsett presents his 2018 budget proposal.

Also, be sure to call Mayor Hogsett at (317) 327-3601 and ask him to make his support for Prop 92 loud and clear!

In May, IIWF Director Jessica Fraser said this at the unveiling of Prop 92:
Our research has shown us that in NO county in Indiana can even a single adult be self-sufficient on the minimum wage of $7.25.  For Marion County, the real self-sufficient wage is about $10 an hour for a single adult. Keep in mind that $10/hour is not a thriving wage-- it’s a making-ends-meet wage.  It is the first rung on the ladder of upward economic mobility. Proposal 92, which moves all city-county employees to a minimum of $13/ an hour goes a few rungs higher on that ladder and will help some city county employees not only get to economic self-sufficiency but to start on their own paths toward upward mobility and the middle class."

Supporters of Prop 92 should pack the house Monday night to show your support. If you can’t make the meeting in person, watch the Council LIVE to see if your Councilor votes the way you ask them to!

IIWF Director Jessica Fraser Speaks at Prop 92's Unveiling, May 2017

Thursday, August 10, 2017

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