Employment recovery by Indiana metro, post pandemic
Indiana aggregate metro employment recovered to 2019 pre-pandemic levels by the second quarter of 2022. This progress, however, was not consistent across all Indiana metros.
Five years have passed since the pandemic made its way to Indiana and we continue to witness and glean information about its effects on Hoosier employment.
The temporary ramifications on the workplace garnered lots of attention in the immediate aftermath, but we now know that the pandemic also caused permanent workplace disruptions. Every employment experience was not equal, dependent on both private and public sector responses at the onset and throughout the pandemic. Responses varied globally, and numerous studies have examined the effects of various policies on employment. Within the United States, the health policy response to the pandemic was shared between the federal and state governments. As a result, action taken within the U.S. was less uniform and policy variation across states generated divergent employment impacts.
Here, we examine employment variation during the pandemic in Indiana metropolitan areas (metros). Local governments in Indiana have some autonomy, but local authority was significantly limited during the pandemic. Instead, pandemic health policy was centralized at the state level. Local variations in employment were likely more a function of industrial mix and less a result of differing policy. As the pandemic uniquely impacted specific industries, local areas with significant concentrations in public-facing industries experienced the pandemic differently. The state’s policy response was common across Indiana metros, but differing industry concentrations yielded interesting outcomes in employment.
The aggregate of Indiana metros indicate that employment returned to pre-pandemic levels in the second quarter of 2022 (see Figure 1). As Indiana metros differ significantly in terms of employment size, a relative scale was created to view metros on equal terms. Employment was scaled to the fourth quarter of 2019, the approximate quarter directly prior to the pandemic and the state’s subsequent policy adjustments. The trough of employment was the second quarter of 2020, when many businesses shuttered and aggregate demand fell as people stayed home in quarantine.
Figure 1: Indiana metro aggregate employment, scaled to 2019 Q4
Note: 2022 Q3 was the latest quarter available at the time of this article’s writing.
Source: Indiana Department of Workforce Development, Quarterly Census of Employment and Wages
Figure 2: Indiana metro employment, scaled to 2019 Q4
Note: 2022 Q3 was the latest quarter available at the time of this article’s writing.
Source: Indiana Department of Workforce Development, Quarterly Census of Employment and Wages
When examining individual Indiana metros over this timeframe, it becomes clear that the Elkhart metro had the most favorable employment experience (see Figure 2). While the initial impact of the pandemic caused the metro to experience the second-largest drop in 2020 Q2 employment (only 83% of the pre-pandemic level), Elkhart quickly rebounded and surpassed all other Indiana metros. Employment recovered completely by 2021 Q1 and reached a peak of nearly 109% of pre-pandemic employment in 2022 Q2. This largest positive employment recovery is likely due to its manufacturing employment concentration, particularly its concentration of RV (recreational vehicle) manufacturers. The RV industry experienced a significant boom in demand coming out of the pandemic due to low interest rates and the desire for family isolation during recreational travel.
A cluster of Indiana metros followed Elkhart in 2022 Q2 employment. These metros mirror or slightly exceed the Indiana aggregate employment number and they include Lafayette, Louisville, Bloomington, Fort Wayne and Indianapolis (see Figure 3). All of these metros experienced a decline during the pandemic shutdown in 2020 Q2 and have since shown positive employment growth.
Figure 3: Metro employment for Bloomington, Fort Wayne, Indianapolis, Lafayette and Louisville, scaled to 2019 Q4
Note: 2022 Q3 was the latest quarter available at the time of this article’s writing.
Source: Indiana Department of Workforce Development, Quarterly Census of Employment and Wages
The next cluster of Indiana metros includes Evansville, Gary, Michigan City, Columbus, Terre Haute and Muncie (see Figure 4). These metros also mirror the Indiana aggregate, but their employment growth (while positive) lagged the metro aggregate in 2022 Q3. Of note within this group is Columbus, which displayed particular employment strength in the first three quarters of 2022.
Figure 4: Metro employment for Columbus, Evansville, Gary, Michigan City, Muncie and Terre Haute, scaled to 2019 Q4
Note: 2022 Q3 was the latest quarter available at the time of this article’s writing.
Source: Indiana Department of Workforce Development, Quarterly Census of Employment and Wages
As seen in Figure 5, the South Bend metro fell behind the metro aggregate employment growth pace. Although it experienced a modest employment rebound after 2020 Q2, South Bend endured a stagnant employment situation in the quarters that followed. In 2022 Q3, it still stood at 93% of its pre-pandemic employment.
Likewise, the Cincinnati metro also fell behind the metro aggregate employment growth pace. The metro even experienced negative employment growth in the quarters following the pandemic’s start. Despite its initial recovery to 94% of pre-pandemic employment in 2021 Q2, the metro faltered to just below 92% in 2022 Q1.
The Kokomo metro, with its reliance on manufacturing and the auto industry, suffered the most troubling outcome through 2022 Q3. In the immediate aftermath of the pandemic, its employment contracted the least of any Indiana metro. While aggregate Indiana metros shrank to 88% of pre-pandemic employment in 2020 Q2, the Kokomo metro only contracted to 91% of pre-pandemic levels. However, after a modest recovery in late 2020, it consistently lost employment. In 2022 Q3, the Kokomo metro contracted to approximately 90% of pre-pandemic employment.
Figure 5: Metro employment for Cincinnati, Kokomo and South Bend, scaled to 2019 Q4
Note: 2022 Q3 was the latest quarter available at the time of this article’s writing.
Source: Indiana Department of Workforce Development, Quarterly Census of Employment and Wages
Indiana aggregate metro employment recovered to 2019 pre-pandemic levels by the second quarter of 2022. This progress, however, was not consistent across all Indiana metros. While the state’s policy response was uniform, the industry mix within each metro was not. This resulted in a wide variation of statewide employment recovery, with some metros recovering well and others continuing to experience significant struggles.