As Indiana voters head to the polls, Scott Lincicome explains in a Federalist column why they should be less susceptible than most to Donald Trump’s stump speech about American manufacturing woes.
Perhaps the most important fact about Indiana’s economy—and one you won’t be hearing from Trump or his media buddies—is that the state’s manufacturing sector is thriving. According to government data compiled by the National Association of Manufacturers (NAM), Indiana leads the nation in manufacturing’s share of state gross domestic product (a whopping 29.45 percent, while most states are in the low teens) and jobs (17.06 percent).
Meanwhile, Indiana’s annual manufacturing output has soared since 2000 (coincidentally when everyone’s favorite trade punching bag China joined the World Trade Organization, or WTO) from a little more than $60 billion in 2000 to well more than $93 billion in 2014 (the last year of data available).
Unlike many other states, Indiana also has experienced significant gains in manufacturing employment since the end of the Great Recession, adding more than 90,000 manufacturing jobs between late 2009 and early 2016.
The long-term trend for Indiana manufacturing jobs is, as with the rest of the United States and the world, downward, but—as the aforementioned output stats and reams of academic research demonstrate—that’s mainly due to changing consumer tastes and productivity gains like robots and computers, not trade. (The state has also gained around 375,000 total non-farm jobs since the North American Free Trade Association and WTO came into effect in the mid-1990s.)
There is also little sign of a “race to the bottom” to keep these factory jobs in the state. NAM estimates that average annual compensation for Indiana manufacturing workers in 2014 was $72,256 (versus $44,806 per year overall), and data from the St. Louis Federal Reserve show relatively impressive wage gains for these employees over the last several years.
