Indiana's Manufacturing Counties
In 1973, George Steinbrenner bought the Yankees for $10 million, the World Trade Center officially opened, U.S. troops withdrew from Vietnam, and Indiana's manufacturing employment peaked at 758,200 jobs. Thirty-three years later, eight players on the Yankee roster earn over $10 million, the twin towers are gone, our nation is in the midst of another war, and manufacturing employment statewide has dropped to 572,900 jobs. Times change. Whether the decline in manufacturing jobs results from more efficient processes that require fewer workers or production shifting overseas, Indiana continues to cope with these changing realities.
Since the first quarter of 2001 (the start of the recession), Indiana has lost over 61,000 manufacturing jobs, with twenty-five counties experiencing declines of 1,000 or more. Nevertheless, Figure 1 shows that 20 counties actually increased manufacturing employment during that same time period; however, the total increase for these 20 counties with manufacturing employment gains totaled only 12,881, over half of which was in Elkhart County alone.
Figure 1: Manufacturing Concentration and Change
Hoosiers are more reliant on manufacturing than the nation, where production accounts for only 11 percent of all jobs. Statewide, 20 percent of all jobs fall within the manufacturing industry (as of the first quarter of 2005). From a local perspective, 33 counties fall below Indiana's average (with 2 counties being nondisclosable), leaving 57 counties to exceed it (see Figure 1). Eleven counties, most of which are concentrated in northeast Indiana, have more than 40 percent of their jobs in manufacturing. This article will look at those counties (Adams, Clinton, De Kalb, Decatur, Dubois, Elkhart, Fountain, Gibson, Kosciusko, Lagrange and Noble) to see how Indiana's most manufacturing-intensive areas are faring in this changing economy.
One-fourth of all the manufacturing jobs statewide are found in these 11 counties, which had nearly 141,400 manufacturing jobs in the first quarter of 2005 (see Table 1). Noble and Elkhart counties both have over half of their total employment in manufacturing. With over 63,000 manufacturing jobs, Elkhart County is second only to Marion County statewide in the number of manufacturing jobs. Kosciusko County is in the top ten with nearly 15,200 manufacturing jobs. Table 2 shows a few of the major manufacturing employers in these counties.
Table 1: Indiana's Manufacturing Jobs, 2005:1
Table 2: Largest Manufacturing Companies in Each County
Five of the 11 counties gained manufacturing jobs between 2001:1 and 2005:1. Elkhart County saw the largest increase from a numeric perspective (6,840 jobs), while Gibson County saw the largest percentage increase (49.6 percent).
While several counties no longer have 40 percent of their total employment in manufacturing, Gibson County is the only one of the current 11 not in that group back in 2001. Expansions at the 10-year-old Toyota plant are responsible for many of its 2,184 new jobs.
These new manufacturing jobs were responsible for about 61 percent of the growth in total employment in Gibson County, and manufacturing constituted over 71 percent of total employment growth in Elkhart County. In Lagrange County, the increase in manufacturing (443 jobs) was 66 percent higher than the increase in total employment (267), indicating losses in other industries (namely agriculture, forestry, fishing and hunting, which lost 268 jobs, and retail trade, which lost 167 jobs).
De Kalb was the only one of the 11 counties to lose manufacturing jobs and still see increases in total employment (see Figure 2). A tripling of wholesale trade (857 jobs), together with a 69 percent increase in administrative and support services (330 jobs), more than offset De Kalb's manufacturing decline. The remaining five counties with losses saw manufacturing declines range from -111 in Fountain County to -1,783 in Dubois County, with total employment losses ranging from -64 in Fountain County to -1,241 in Noble County.
Figure 2: Percent Change in Employment, 2001:1 to 2005:1
Indiana's manufacturing-intensive counties have 577,432 residents, according to 2004 estimates. Of the 11, only Fountain County lost population (256 fewer people) between 2000 and 2004 (see Figure 3). As a group, the counties picked up over 15,500 new residents. Elkhart and Lagrange counties had the largest population growth (8,226 and 1,566, respectively), nearly twice the state rate, at 4.5 percent. (Due to its large Amish population with above average birth rates, Lagrange County typically exceeds the state average.) Adams and Clinton counties grew the slowest, each gaining fewer than 200 residents for growth rates under 1 percent.
Figure 3: Population Change, 2000 to 2004
About 389,962 people work in these 11 counties, according to data from 2003. Just 69 percent of those who work in Gibson County also live there, while that number reaches all the way up to 88 percent in Clinton County. In Elkhart, Dubois, Gibson, De Kalb and Decatur counties, more people commute into the county for work than commute out of the county (see Figure 4).
Figure 4: Commuting, 2003
Those commuting into the county for work make up one-fourth of the workforce in De Kalb County and 31 percent of the workforce in Gibson County. Meanwhile, more than 25 percent of the employed residents in Fountain, Lagrange, Noble and Clinton counties earn their livings outside their county of residence. These are relatively rural areas that had high rates of commuting to begin with; however, three of these four counties (Lagrange is the exception) have seen total employment decrease in the past several years, so it is possible that even more people will need to travel farther to find work.
Quarterly manufacturing wages in the 11 manufacturing-intensive counties exceeded $1.4 billion in the first quarter of 2005. In all but Decatur and Dubois counties, the manufacturing sector made up over 50 percent of all wages earned in the county (see Table 3). The average weekly wage per manufacturing worker ranged from $632 in Dubois County to $1,139 in Kosciusko County. Growth in manufacturing earnings outpaced growth for total earnings, except in Decatur and Adams counties.
Table 3: Wages, 2005:1
Local Employment Dynamics data are a little older, but show what new employees are making compared to the overall average wage. Average new hire monthly earnings for all industries for the third quarter of 2004 ranged from $2,080 in Lagrange County down to $1,489 in Decatur County (see Figure 5). Kosciusko County had the biggest gap between new hire earnings and average earnings ($1,413), while Lagrange County had the smallest ($651). New hire earnings fell in four counties compared to three years earlier (2001:3). Not suprisingly, three of those four counties had declines in manufacturing employment. Meanwhile, average earnings went up by at least $240 in all 11 counties compared to 2001:3, with Gibson County showing a gain of nearly $540.
Figure 5: Monthly Earnings, 2004:3
- 1973 annual average
- Average of the most recent four quarters (2004:2 to 2005:1)
Rachel Justis, Managing Editor
Indiana Business Research Center, Kelley School of Business, Indiana University