Report shows Ind. residents earn less than U.S. average

A report by the United States Census Bureau released Sept. 17, showed 2012 data on U.S. income, poverty and health insurance coverage.

The findings indicated the median household income for Indiana in 2012 was $46,707, which is lower than the U.S. median household income of $51,017.

Gerhard Glomm, an economics professor at IU, said he believes the difference in incomes may be a result of education in Indiana, where about 25 percent of people aren’t graduating high school.

According to Americanhealthrankings.org, the high school graduation rates in 2012 in Indiana were 75.2 percent.

“If you grow up in poverty, you are going to have a tough time graduating from high school,” Glomm said. “If you don’t graduate from high school, chances are you will live in poverty and your children will live in poverty.”

According to the Census Bureau, 14.1 percent of people were below the poverty level from 2007 to 2011 in Indiana. Glomm said the high poverty rate doesn’t bode well for the future.

“A lack of resources today feeds into a lack of resources for the next
generation,” he said. “If we have a large number of children growing up in poverty now, chances are their children will be growing up in poverty as well.”

Glomm said the biggest problem he sees is people at the very bottom of the
income distribution.

“The interesting comparison is not really between Indiana and the rest of the country, but why the median income in the country has not changed over the last 30 years,” he said.

Glomm said the average income for Indiana and Minnesota has been about the same over the last 40 years, but now Minnesota’s average income is higher than Indiana’s average.

“It’s a very gradual change,” he said. “One economy gradually grows consistently faster than the other. If you grow slowly, the poverty rate will be relatively high.”

Glomm said he believes the U.S. median income has to do with technological changes, because the changes tend to pull the income distribution apart.

“Technological change tends to make highly skilled people more productive, but
technological change tends to take away employment opportunities for people with relatively few skills,” he said.

— Alli Friedman