Indiana’s economy has come a long way back from the depths of the recession.
But a new report says we still have a long way to go. Indiana fell harder than almost any other state during the downturn. The median income of Hoosier families slumped by 27 percent from 2000 to 2011.
As a result, one-third of Hoosiers officially rank as low-income residents, and more than 45 percent of Indiana’s children live in low-income families.
Those numbers come from the Indiana Institute for Working Families, an organization that aims to fight poverty.
But its conclusions match those from a very different organization, the Indiana Chamber of Commerce. In May, the Chamber reported that Indiana had the 34th lowest poverty rate of the 50 states in 2011. That marked a major decline from 2000, when Indiana had the 12th lowest poverty rate.
The Institute for Working Families report does more than just point out Indiana’s problems. It also offers constructive ideas for raising our state’s fortunes.
Most significantly, the institute calls for the state to train more “middle-skill” workers, helping them earn certificates that lead to good jobs.
Hoosier workers need training beyond high school — but not necessarily college degrees — to qualify for jobs that will make their lives rewarding, the institute says. Plus, Indiana employers are crying for workers with more skills.
It sounds as if new Gov. Mike Pence is right on target with his push to increase job-specific training for Hoosiers.
The state could encourage the process by providing more financial aid to students who enroll in technical training, the institute says.
State leaders would be likely to see a rapid payback from investing in technical training. Studies show workers can earn at least 20 percent more money with post-high-school training. More wages equal more taxes paid to the state.
But on the topic of taxes, the institute suggests that Pence could have used more imagination on tax reform than his simple cut in income tax rates.
The report says Indiana has the ninth most regressive tax system in the nation, with the seventh-highest taxes on poor people. A regressive tax policy puts a heavier burden on low incomes than on higher incomes.
One source of unfairness comes from Indiana’s low personal exemption on income taxes. It’s been set at $1,000 per family member for the last 50 years. If it had kept pace with inflation, it would be around $7,600 today.
Hoosiers could use more tax reform, but improving job training should be an even higher priority.
In spite of our gloomy statistics on poverty, Indiana has managed to build a healthy state budget surplus. Training Hoosiers for better jobs would be a smart way to spend it.