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November 23, 2001

Indiana's Still a Production-Oriented State

Drive east across the Illinois/Indiana border and you'll need to do a lot more than simply reset your watch. If you're an employer, you'll have to change your expectations about the workforce. That's because the state in your rear view mirror can count more college degreed people among its adult population than almost any other state in the Midwest. But in the state that lies before you, the opposite is true. Indiana has fewer people with college degrees than any other Great Lakes state.

That's not exactly a new story anymore. But even though the problem of the "brain drain" has been clearly identified as an issue that is vital to our state's economic development, recently released data from the Census make it clear that mere recognition of the problem isn't enough to make it go away.

To be fair, there was actually some improvement in Indiana's educational attainment ranking among the fifty states in the Special Supplement to the 2000 Census released last week. While our 19.9 percent college degree holding share was higher than only six other states in the entire country, that dismal showing was still better than a decade ago, when we ranked next to last. That simply underscores how hard it is to make meaningful strides in upgrading the skills of our workforce in a world that keeps moving ahead.

In pursuing this goal, state policymakers are not just trying to make bureaucrats at its colleges and universities happy. If the truth be told, the state economy would be just as well off if we stole all of our graduates away from universities in other states. That's been a winning strategy for states with higher educational attainment records -- who are also enjoying strong economic growth -- like Colorado, Virginia, and the District of Columbia.

What is more, when it comes to measuring the skills of our workforce, counting the diplomas on our residents' walls is just the beginning. There is overwhelming evidence that college-degreed individuals are on a faster track over their entire lives in acquiring the specialized skills that are rewarded in the marketplace. From the point of view of the entire state economy, growing these kinds of jobs makes us all richer.

That, too, has proved to be difficult. For the Census 2000 Supplement shows that Indiana continues to be a production-oriented state. The flip side of the coin that gave us fewer college graduates is a lower concentration of high skilled jobs in our economy. At 17.0 percent, Indiana's fraction of professional jobs in its workforce is lower than every Great Lakes state. Meanwhile, the 14.1 percent of Indiana workers who were engaged in production occupations in 2000 was the highest of any state in the country.

If the last ten years have taught us anything, it has been the absolute necessity of creating, attracting, and retaining industries that employ highly skilled workers. If you think otherwise, consider that fastest growing major city in the Midwest is Minneapolis. Minneapolis? Cold winters, and the absence of either mountains or coastline have not stopped personal income from growing by 336% in Minneapolis/St. Paul since 1979, leaving Indianapolis (276% growth) and Chicago (248%) in its wake. Minnesota also ranks twelfth in the nation in the fraction of its population holding college degrees.

If policy makers in Indiana want to end the slow erosion of our earnings relative to other states, they cannot afford to let up on their efforts to slow and reverse the brain drain that has cost our economy so dearly.

Link to this commentary: https://commentaries.cberdata.org/448/indiana-s-still-a-production-oriented-state

Tags: economics, finance, education


About the Author

Pat Barkey none@example.com

Patrick Barkey is director of the University of Montana Bureau of Business and Economic Research. He served previously as Director of the Bureau of Business Research (now the Center for Business and Economic Research) at Ball State University, overseeing and participating in a wide variety of projects in labor market research and state and regional economic policy issues. Note: The views expressed here are solely those of the author, and do not represent those of funders, associations, any entity of Ball State University, or its governing body.

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