New Year, Same Story: Private Sector Wages Increase But Most Counties Lag State

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Statistically speaking, most private-sector workers in Indiana got a raise last year, according to preliminary 2018 average wage data from the U.S. Bureau of Labor Statistics. The percentage of that annual raise varied from 0.15% for Jennings County in southeast Indiana to 27.8% for central Indiana’s Tipton County. Tipton County’s workers also enjoyed the largest dollar increase of $12,112. 

Indiana’s 2018 average wage was $47,864, which was a 3.1% increase from 2017’s $46,424. The state’s average constitutes 83.68% of 2018’s national average at $57,198. The national wage increase was 3.36%, meaning that on average, the distance between the state and national averages got larger.

Only three counties had average wages above the nation: Posey, Bartholomew and Marion. The counties with wages above the state average, aside from the three already listed, were Tipton, Hamilton, Pike, Gibson, Kosciusko, Howard, DeKalb, Elkhart, Vermillion, Lake and Warrick. Strong wage performance continues to be closely tied to significant manufacturing employment.

Average wages increased 3.74% in Indiana and 3.41% nationally for 2017 over 2016.

These wage data come from private-sector employers via the Quarterly Census of Employment and Wages. As a true average, BLS divides all the wages by all the workers within a geography. The methodology does not distinguish between full-time and part-time employees. It reflects workers’ county of employment, not their county of residence. Income statistics, which are not included here, reflect the county of residence.

Looking at statewide data, nine of Indiana’s 92 counties experienced reduced average wages. In a bit of cruel statistical irony, Ohio County in southeast Indiana had largest percentage decline – 9.47%. In 2017, it had the largest annual increase at more than 20%. The largest dollar decline went to southwest Indiana’s Pike County at $3,523. Other counties with wage declines were Owen, Parke, Hancock, Clay, Morgan, Cass, and Elkhart.

Labor market numbers

County unemployment rates stayed relatively even across Indiana when comparing 2017 data to 2018. Only 12 counties had increased unemployment rates, but the largest jump was the numeric change of 0.3 for Sullivan and Howard counties. Fifteen states had theirs stay exactly even; the remainder went down, but again it was a fractional share. The largest reduction was south central Indiana’s Lawrence County, going from 4.4% in 2017 to 3.8% in 2018.

Two counties, on opposite ends of the state, tied for the lowest unemployment rate of 2.5%: LaGrange in northeast Indiana and Dubois in southwest Indiana. 2018’s highest unemployment rate went to Vermillion County in west central Indiana at 5.5%. It was the only county with an unemployment rate above 5%, which is what many economists consider full employment to account for the natural churn of workers within the labor market.

Labor market data reflect county of residence.

People sitting on the labor market sidelines, waiting for the right opportunity while passively pursuing employment, are not included in these numbers. Since 2018’s labor market increases outpaced population gains for most counties, this employment growth indicates labor market slack that the strong job market is absorbing.

Looking at the number of Hoosiers working last year, 51 counties had their percentage of employed people grow from 2017 to 2018 at greater percentage than the state’s 1.47%. Tipton County had the largest percentage increase of workers at 8.31% growth. The largest numeric growth, unsurprisingly, went to Marion County, the most populated county, with 7,253 more people working. Allen County had the second largest with 3,771 more. Other counties with more than 1,000 additional employed workers in 2018 were Elkhart, Hamilton, Lake, Tippecanoe, Kosciusko, St. Joseph, Vanderburgh, Hendricks, Johnson and Monroe.

In the rest of the state, Parke, Delaware, Huntington, Randolph, Orange, Marshall, Pike, Wabash and Howard counties lost both employed workers and labor force members. Ripley County’s employment shrank by 5 people but unemployment grew by 7, thus giving that county a labor force gain of 2. 

By the numbers:

  • $57,198: National 2018 average wage
  • $47,864: Indiana’s 2018 average wage
  • $61,005: Posey County’s 2018 average wage, the highest in the state
  • $25,298: Brown County’s 2018 average wage, the lowest in the state
  • 3: Number of counties with wages above 2018 national average
  • 78: Number of counties with wages below 2018 state average
  • $12,112: The largest increase in average county wage, for Tipton County
  • 9: Number of counties with wages that declined from 2017 to 2018
  • 3.4: 2018 Indiana unemployment rate
  • 44: Number of counties with 2018 unemployment rates below Indiana’s
  • 2.5: The lowest unemployment rate for any county in 2018
  • 1: The number of counties with the 2018 unemployment rate above 5%
  • 47,465: The increase in the number of Hoosiers working in 2018 compared to 2017
  • Perspectives

    • Richardson is a practice lead with Centric Consulting.

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