Four years ago this month, Lehman Brothers filed for Chapter 11 bankruptcy with other banks following suit shortly afterward, leading to the 2008 stock market crash. Indiana employment levels and buying power all plunged along with the rest of the country. Banks cut back on loans and businesses responded to the uncertainty and financial losses by cutting their workforce, bringing the United States into one of the worst recessions in its history.
IU student Sam Bass, who at the time was living in China translating contracts for an Australian mining company, says although his life has improved in other ways, he’s not making as much money.
“I have to work harder now. I’m in school,” he said.
Bloomington resident Emily McCord said her job change has improved her outlook. Being in a new relationship also has made a difference.
“Financially I’m the same, but my quality of life is better off,” McCord said.
Timothy Slaper, director of economic analysis at the Kelley school’s Indiana Business Research Center, says the outlook for Indiana is rosier these days, but the state is still rebounding.
“[Indiana residents] are better off than a lot of other states because we didn’t have that housing boom and that tremendous bust afterwards,” Slaper said. “That said, there’s been a lot of restructuring in the Hoosier economy, and when the auto industry laid off all those workers several years ago, a lot of them haven’t come back to work.”
Slaper credits recent progress in the auto industry with helping keep unemployment down, but he cautions that many workers who were laid off need to retool their skills.
“Back in the old days you might not even graduate and still get a job at the auto assembly line and make a fairly decent living,” he said, “and those days are long gone.”
He said analysts are predicting more than 14 million new autos sold in 2012, an encouraging sign compared to 2009, when barely 11 million were sold.
The average Hoosier’s ability to buy a home is improving as well. The IBRC’s Leading Index for Indiana (LII), which signals change in the state’s economy, moved up slightly last month because of Indiana’s positive housing outlook. Slaper said the change indicates, in part, that homebuilders are hearing from potential buyers who are reporting better credit scores.
“And [the builders] are saying, ‘Oh, this isn’t sub prime, this is somebody who has a steady job and can afford the house.”
One area in which Hoosiers continue to lag is wages. Groceries might be cheaper in Terre Haute than Chicago, but even taking those differences into consideration, Indiana residents aren’t on par with some other states.
“We’re still at about 92 percent of the national average, so that means that our household and our personal income is just not up to national standards,” Slaper said.
Although it might be tempting to rely on hard numbers to gauge Indiana’s fiscal health, Slaper warns that people who look at small decimal changes in the unemployment rate might be misled.
“The economy is really twisted in directions that it hasn’t been before,” he said, “so getting a truly accurate read of its direction and the strength of that direction is extremely difficult.”
Adrianna Zhang and Zhe Huang contributed to this report.