Indiana Income Growth Ranks Near Bottom Over Past 50 Years
Hoosiers’ incomes have posted some of the weakest gains in the country over the last five decades, according to a new analysis from the Urban Institute.
Why it matters: Sluggish income growth can make it harder for Indiana to attract and keep workers — particularly young professionals who can choose where to live as they look to buy homes and start businesses.
The big picture: The widening earnings gap adds another challenge for local leaders pushing an ambitious goal to increase downtown Indianapolis’ population by 20,000 residents over the next 10 years.
By the numbers: After adjusting for inflation, Indiana’s median household income rose just 14% between 1970 and 2023, increasing from $60,907 to $69,477.
That trails the national growth rate of 32% and ranks as the fourth-smallest increase among U.S. states. Indiana now has the 37th-highest median household income nationwide, a sharp drop from its 16th-place ranking in 1970.
What they’re saying: “Income alone does not determine a family’s prosperity, but it does offer a snapshot of economic growth,” the Washington, D.C.-based think tank wrote.
Between the lines: Education stands out as the single strongest factor linked to income growth, according to the report.
Another contributor: Immigration also plays a role.
“This could be because immigration leads to economic growth, immigrants seek out growing areas, or both.”
Zoom in: The share of Indiana residents with a bachelor’s degree increased by 22% from 1970 to 2023, Urban Institute data show. Over the same period, the state’s foreign-born population grew by 5%.
Zoom out: Income growth has been strongest in parts of the West, Mid-Atlantic and Northeast, while many other regions have seen little change.
New Hampshire (62%), California (61%) and Arizona (60%) posted the largest gains. Michigan recorded the weakest growth at 2.9%, and West Virginia was the only state where median household income declined, slipping 0.4%.
