Since 2012, two Indiana University Northwest professors have meticulously tracked the local economy, utilizing one of the first economic indexes designed for a specific region of the nation.
This has led to some sweeping long-term insights, including that local growth is slower, high-paying jobs are disappearing and incomes are declining.
That doesn't mean the two academics, assistant professor of economics Micah Pollak and professor of finance Bala Arshanapalli, don't see hope for the region moving forward.
Pollak sees hope in infrastructure jobs that would better connect Northwest Indiana with high-paying jobs in Chicago. That would include the current plan to expand the South Shore commuter rail line to suburban communities in Lake County.
"Historically, Northwest Indiana has been different from other suburbs like Schaumburg," he said. "They're quite affluent areas as a result of different local policies, such as public transportation that lets residents get to downtown Chicago fast."
He points out it's more difficult for people to locate in Merrillville than Naperville, because the latter has a higher-frequency of commuter trains at a more consistent speed going to downtown Chicago. Also, people in Naperville don't have to drive 15 to 20 minutes for a 45-minute train ride.
The Region also has seen an expansion of the health and professional services industry and needs to take steps to attract those higher paying jobs, Pollack said.
Getting a grip on local economy
"We are lagging behind the state and the national economy, but we are turning it around," Arshanapalli said. "If we didn't do the index, we would have no way of knowing how our region is doing compared to the state. It is nice to have, and we're hoping the index can be used to promote the Region."
Utilizing key metrics, it tracks the local economy, not the national or state economy, to give business leaders and the general public a clearer grasp of where Northwest Indiana stands economically and where it's headed.
It was devised in part because Northwest Indiana is a one-of-a-kind area that can't be lumped in economically with either the rest of the Chicago metro or the rest of the state because of its mix of industries, such as steelmaking and oil refining.
A few states have such indexes, but it's still rare for the focus to be drilled down to a particular metro area, Pollak said.
The most recent reading of the NWI Index stood at 141 points, which shows how it's doing as compared to 1992, the first year when detailed local economic data became available. It started at a benchmark of 100 in 1992, and the current figure reflects the growth of the Region economy since that point. The Index was mainly flat last year, with little significant movement up or down.
Arshanapalli and Pollak are looking at adding more local data, including on real estate, housing, construction, wages and working hours. They also aspire to provide more educational resources to the public, including offering consulting services to local business owners, teaching them how to use the data to help them decide when to invest in an expansion or when to stock up on inventory.
Since 2012, they've published the local economic data monthly, earning an Innovation Award from the Gerald I. Lampkin Innovation and Entrepreneurship Center.
"We've made minor changes, drawing data from differing sources," Pollak said. "It's behind-the-scenes, but we've made minor changes to be a little more consistent or follow a particular area a little more closely."
Through the Index, they are able to track some of the changes taking place in the local economy and get a clearer picture as to where it's heading.
"Long-term structural shifts are happening in Northwest Indiana," Pollak said.
The NWI Index has determined Northwest Indiana has grown by 10.8 percent since 2009. That might sound good, but the reality is that 3 percent annual growth is considered good so the local economy ideally should have grown about 20 percent over that time period, Pollak said.
To put it in perspective, the nation's economy grew by 19.1 percent over the same time period. Indiana's economy grew by 25.2 percent since 2009, which Pollak said reaffirmed the need for a more local economic index.
A big part of the reason for the relatively sluggish growth is declining incomes, Pollak said. Individual earnings in Northwest Indiana fell by $2,500 over the last three years, whereas wages rose by $2,500 to $3,500 in the Chicago metro, across the state, and nationwide.
That's largely because of the decline of manufacturing, which has lost more than 5 million jobs nationwide over the last 20 years, according to the Alliance for American Manufacturing. Factory jobs that paid $25 to $30 an hour have disappeared, Pollak said.
"It's been declining nationwide with heavy job losses, but especially here," he said.
The Region has continued to add jobs, but they're largely $10 to $15 an hour service jobs that drag down the rest of the local economy.
Another lesson from the data is that, while heavy industry has been good to the Region, it needs to look at a more diverse economic mix in the future, Pollak said.
"Historically, the Region kept all its eggs in one basket, but now we're pushed to adapt," he said. "We need to attract people to new types of jobs, such as in the growing health care system."