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August 22, 2008

Mark Bennett: Terre Haute area jobless rate gets higher, incomes slow to grow

By Mark Bennett

Thousands of Wabash Valley residents could’ve qualified as Barack Obama’s running mate.

As he considered potential vice presidential candidates last week, Obama said, “I want somebody who’s mad right now that people are losing their jobs, and is mad right now that people are seeing their incomes decline.”

Technically, that criteria should attract more folks than the line to ride the Son of Beast at King’s Island.

The Terre Haute Metropolitan Statistical Area — a title economists use to describe the city and surrounding communities — represents a snapshot of those two dilemmas. The jobless rate in Vigo County last month hit 6.9 percent, up from 5.2 percent one year ago. That’s higher than the state rate of 6.1 percent, and the nation at 6.0.

Meanwhile, the median household income in greater Terre Haute is $36,659. Out of 359 metro areas in the United States, Terre Haute’s median income ranks 37th from the bottom. Average paychecks here have grown just 9.8 percent since 2000, and that increase rates among the smallest in the country at No. 300, according to research by the Kiplinger Personal Finance magazine’s “2008 Best Cities to Live, Work and Play.”

Son of a beast.

“It’s about high-end jobs, and there are not a lot of those in Terre Haute,” said Robert Guell, an economics professor at Indiana State University.

Faced with the reality of the numbers, it’s tempting to compare our lot with those around us. Gazing over that fence could leave Hauteans both envious and relieved. A mere two-hour drive south on U.S. 41 will lead to Evansville, which was voted by Kiplinger.com readers the No. 1 American city in which to live, work and play, well ahead of runner-up Green Bay, Wis.

That’s not such a head-scratcher, based on the Kiplinger statistics, compiled by Kevin Stolarick, research director at the Martin Prosperity Institute in Toronto. Evansville has some advantages over cities, such as Terre Haute. Yes, the Evansville metro area population (350,172) is nearly twice as large as Terre Haute’s (167,676). But Evansville also grew by 2 percent from 2000 to 2006, while Terre Haute area population dwindled by 1.6 percent.

The amenities — things to do and see — tips in the Pocket City’s favor, too, thanks to Casino Aztar’s $40-million entertainment district, a pro baseball team, The Centre (an active, 2,500-seat auditorium), and a riverside bike and walking trail, among other virtues. Those attributes are part of the “four T’s,” as Stolarick put it, used to assess each city — the technological business base, talent and educational level of the workforce, tolerance by the community for new residents and ideas, and territorial assets such as parks, leisure sites, arts and dining.

Terre Hauteans, though, would probably first notice the income numbers. People living in the Evansville metro area draw a median household income of $43,109. More notably, those incomes rose 13.6 percent between 2000 and 2006. Terre Haute isn’t the only Hoosier city trailing Evansville. It’s one of seven Indiana cities among the United States’ bottom 60 in income growth. Muncie’s incomes haven’t gone up at all, while Anderson’s climbed just 0.3 percent, Kokomo 3.3, Lafayette and Fort Wayne 7.6, and Elkhart 8.7.

Of course, those income stats from 2000 to 2006 don’t yet reflect the loss of nearly 800 high-dollar jobs at Pfizer’s soon-to-close Vigo County plant.

Ironically, just as Kiplinger announced Evansville as its readers’ favorite, Forbes.com unveiled its “America’s Fastest-Dying Cities,” a top 10, or bottom 10, rather. Indiana escaped that tough 10, but six of the cities are in the border states of Ohio and Michigan. Terre Haute shares a key problem, in a more modest dose, with those unlucky towns — a shrinking population.

This community isn’t a candidate for that dubious list, but has entered “low-dollar city” status. “Right now, we are, and it’s not going to get any better just with the passage of time,” Guell said. “The passage of time will just solidify the problems, rather than solve them.”

The answer may not be a traditional Hoosier manufacturing industry. Instead, some of the assets Terre Haute still features might be better suited for white-collar firms, like insurance companies, or biotech businesses, or a pharmaceutical maker to move into the Pfizer plant, Guell said.

Why? Terre Haute actually tops Evansville in a demographic category Kiplinger calls “the creative class.” Almost one-fourth of this area’s workforce fits in that creative class — scientists, engineers and educators, as well as writers, artists and entertainers. The presence of three four-year colleges, including the engineers coming out of Rose-Hulman and a concentration of teachers and professors, boosts Terre Haute’s percentage to 23.7, just above Evansville’s 23.4. It still trails Indianapolis-Carmel, Muncie, Fort Wayne and Columbus, but it’s a niche.

Also, Terre Haute’s cost of living index is the best in the state, rated at 89 (with 100 considered as the national average).

“We are in a position to bring in good-paying jobs,” Guell said, “and what you would need is an influx of jobs in which you need an education to keep them.”

Terre Haute has to play to its strengths. Stolarick, who went to college in another Missouri Valley Conference town, Normal, Ill., helped remote Aberdeen, S.D., try to secure strong-paying employers. As they hunted for ideas, Stolarick discovered that hundreds of hunters visited that city of 24,000 residents each year. Many were wealthy businessmen from hundreds of miles away.

So, after their stay in local lodges, the town mailed postcards to the hunters, saying, “Hey, we hope you loved Aberdeen. We’d love to help you move your business here. Talk to us,” Stolarick said. “And they’ve had some success with this.”

Generating better paychecks here is a complex process. But local creativity is important. Also, some of that anger about lost and low-paying jobs, which Obama mentioned, would be helpful from the White House to the Statehouse.

Mark Bennett can be reached at mark.bennett@tribstar.com or (812) 231-4377.

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