Fort Wayne’s metropolitan statistical area was among 10 in the nation to see the greatest loss in economic status through the shrinking of its middle class between 2000 and 2014, according to a recent study by Pew Research Center.
The study looked at 229 MSAs across the country, and the share of adults living in middle income households fell in 203 of them. Among the vast majority of MSAs with an eroding middle class, the average share of adults in that income category fell by 4 percentage points.
Fort Wayne did not lose as much of its middle class, but the loss had greater impact than average on a change that resulted in its economic status, and that showed up in the Pew ranking.
Nationally, for a three-person household, the annual income considered necessary for a middle class lifestyle ranged from $42,000 to $125,000.
To compare changes in the 229 MSAs, Pew adjusted incomes for differences in the cost of living. In expensive metro areas, incomes were adjusted downward; in cheap areas, incomes were adjusted upward.
“What Pew has attempted to do is create an apples-to-apples comparison across very different markets,” said Ellen Cutter, director of the Community Research Institute at Indiana University-Purdue University Fort Wayne.
“Other communities also have a very low cost of living, but have seen more rapid wage growth since 2000. The lower cost of living or doing business advantage is weakened when our wages aren’t growing as fast as they are in other communities with a lower cost of living.”
The study’s income tier breakdown shows Fort Wayne’s share of adults of middle income households fell to 58.7 percent in 2014 from 61 percent in 2000 ; lower income households grew to 26.9 percent from 20.1 percent and upper income households dropped to 14.4 percent from 18.8 percent.
A percentage point gain or loss of economic status for each metro area ranked was measured by subtracting the change in the share of adults who were lower income from the change in the share of adults who were upper income.
Fort Wayne lost 11.2 percentage points in economic status, putting it around the middle of the 10 MSAs that saw the greatest loss.
All of the MSAs in the study saw their economic status change. For 119 it improved, and for 110 it worsened.
A characteristic Pew identified as common to each of the 10 metro areas with the greatest loss was “a greater than average reliance on manufacturing,” it said in a summary of the study.
“These areas generally experienced a significant drop in manufacturing employment from 2000 to 2014, ranging from 23 percent in Fort Wayne, IN, to 51 percent in Hickory-Lenoir-Morganton, N.C., compared with 29 percent nationally,” it said.
The manufacturing job losses in these metro areas were not offset completely by job creation in other categories of private sector employment. Pew said the number of private sector jobs declined in each of the 10 MSAs.
It is important to note that almost half of the 229 MSAs in the study lost economic status, Cutter said. And in Fort Wayne’s case, “I would agree with Pew’s analysis, that it’s due to a greater reliance on manufacturing,” she said.
Bureau of Labor Statistics data shows Allen, Wells and Whitley counties – the three that comprise the Fort Wayne MSA – were down by 6,165 jobs in 2014, compared with 2001, Cutter said.
The MSA was down 6,372 manufacturing jobs, but had seen increases in the number of jobs added to some of its other employment categories, she said.
“There was a double whammy in terms of not only losing manufacturing jobs, but high-wage manufacturing and engineering jobs,” Cutter said.
“And when we look at what’s happened in our service sector, we’ve gained in some areas and lost in others, but those fluctuations have not been sufficient to make up for those losses and the wealth lost in the manufacturing sector.”
The Fort Wayne area has tremendous assets in its service sector, with important employers in health care, insurance, professional and technical services and information technology, she said.
And the need to offset years of manufacturing job losses by adding new jobs in the service sector as well as advanced manufacturing is why we see so much emphasis on supporting education, work force training, quality of life initiatives, Cutter said.
“To build the workforce and infrastructure necessary to really accelerate growth in many of these areas is really going to take some time,” she said. “These are not dynamics that can be changed overnight; it takes a long term commitment.”
Data used in the nationwide study were from the Integrated Public Use Microdata Series versions of the 2000 decennial census and the 2014 American Community Survey, Pew said.
Each of the three tiers in the study saw income decline from 1999 to 2014, with the median falling 10 percent for the lower tier, 7 percent for the upper tier and 6 percent for the middle tier.
The study showed 2014 medians for the Fort Wayne area were $24,676 for the lower tier, $176,503 for the upper tier and $71,410 for the middle tier.