Stephanie Ferguson
Director, Global Employment Policy & Special Initiatives, U.S. Chamber of Commerce
Isabella Lucy
Graphic Designer, U.S. Chamber of Commerce
Published
September 15, 2023
The state of Indiana has a favorable landscape for businesses and individuals, with a diverse economy, strong labor market recovery, and a robust small business ecosystem. Immigrants contribute meaningfully to the state's workforce and economy, while educational attainment, quality of life, and cost of living factors remain promising.
The Worker Shortage Across America
Explore the interactive map below to see the impact of the worker shortage crisis in each state.
The Chamber’s Worker Shortage Index ratio indicates the number of available workers for every job opening. A ratio above 1.0 indicates a surplus of available workers compared to job openings.
Indiana’s Labor Market
Prior to the pandemic, Indiana’s labor market was relatively healthy. The state had nearly enough workers to fill every open job, and more workers were being hired into jobs than leaving them. While the state's unemployment rate stood on par with the national figure at 3.5%, its labor force participation rate was higher than the national rate of 63.4%.
Indiana’s current labor market has not yet fully recovered, but it is displaying signs of improvement. While the state's labor force participation rate still lags behind its pre-pandemic levels, it is a full percentage point higher than the national rate.
Indiana’s hiring rate continues to surpass its quit rate, and its unemployment rate remains lower than it was before the pandemic. These trends are particularly promising for employers, who have a surplus of 25,000 job openings compared to February 2020. On the downside, Indiana is grappling with a workforce shortage, evident by the fact that there are only 88 available workers for every 100 open job positions in the Hoosier State.
Indiana’s Business Environment
Indiana's business environment is diverse, encompassing a rich agricultural economy, hosting multiple professional sports teams and two Big 10 universities, and serving as the headquarters for a number of Fortune 500 companies.
Most Hoosiers are employed by the trade, transportation utilities industries and manufacturing, with the financial services industry employment being relatively minimal. Indiana's employment landscape is a result of its position as a vital goods-producing state, with major companies working in the production of metal and plastic products and parts, as well as the automotive sector.
Indiana boasts a thriving small business ecosystem, with 99.4% of all Indiana businesses falling into this category. Nearly half of Indiana's workforce works within small businesses. Within this dynamic landscape, women own 42.4% of small businesses, 10.8% are minority-owned, 3.8% are owned by Hispanics, and 7.2% are veteran-owned.
Indiana’s Educational Attainment
Nearly one-third of Indiana’s population has obtained their high school diploma or its equivalent, surpassing the U.S. average of 26.1% in 2022. 19% of the population has attained a bachelor's degree, while 10.6% have secured a graduate degree, both slightly below the national averages.
Fortunately for employers in the state, the vast majority (84%) of Indiana college freshmen are remaining in the state for their higher education, where the average in-state tuition is $9,268. Out-of-state tuition in the Hoosier state is $29,500, slightly more expensive than the national average out-of-state tuition of $28,000. In total, roughly 360,000 undergraduate students are enrolled in an Indiana campus for the 2022-2023 school year. These students supply a rich talent pool from which local employers can recruit talent.
Quality of Life
Indiana's median household income mirrors the national average of around $70,000, which places the state at the 35th rank among all states. Indiana has a modest tax rate of 3.23%, with a flat rate structure that positions it among the lower tiers of state tax rates.
Nearly a quarter (22%) of Indiana’s workforce are remote workers. For those commuting into an office, the average commute time is 24 minutes. The Council for Community and Economic Research measures states’ costs of living compared to the national average of 100. Indiana’s cost of living index falls at 91.50, meaning the state is more affordable in comparison to the national cost of living. The median rent settles at $844, while the average home cost is $232,390, both falling beneath the national average. Nearly 70% of the population owned their housing unit in 2021. The state experienced a growth rate of 0.65% from 2020 to 2022.
Immigration
In the U.S., immigrants tend to be of working age in comparison to native-born individuals. Consequently, they are more actively engaged in the labor force, playing a dual role as both consumers and taxpayers, contributing to help fund programs like Medicare and Social Security.
Looking at Indiana in particular, immigrants comprise 5.3% of the state's population, totaling 360,076 individuals. Their collective spending power amounts to $8.1 billion, while their tax contributions reach $2.8 billion.
