Thriving (2004)

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Northwest Indiana’s regional economy is in the midst of profound change. Three facts testify to the breadth of the fundamental restructuring now underway.

First, the region is increasingly a part of the Chicagoland labor market and economy. According to the 2000 Census, 22.4% of Lake County residents and 8.9% of Porter County residents who work now do so in Illinois. In addition, we are rapidly evolving into a bedroom community for the City of Chicago.

Secondly, manufacturing–the traditional foundation of the region’s economy–is in sharp decline. Dramatic reductions occurred in the 1980s and 1990s, and manufacturing employment numbers continue to decline. Over a 3-year period ending March 2001, manufacturing employment in Lake County fell by another 7.1%, and LaPorte and Porter Counties experienced comparable reductions of 11.3% and 13.5% respectively. Since a dramatic restructuring of the steel industry is now underway, additional reductions should be anticipated.

Lastly, the gaming industry now employs over 6,000 individuals in Lake and LaPorte Counties. It is one of the few bright spots in an otherwise depressed economy.

Viewed in isolation, no one of these trends is good or bad. Access to the Chicago labor market and inclusion in its real estate market can be viewed as strengths. Industries experience life cycles; they are born, they mature and they decline. The gaming industry has provided a much-needed boost–both in terms of employment and tax revenues–to an economy that has otherwise struggled over the last twenty years. Nevertheless, these trends point to the need for a comprehensive approach to planning, a regional plan which marshals the following:

1) A transportation infrastructure that takes advantage of our proximity to Chicago and our attraction as bedroom communities;

2) A tax structure that attracts and promotes capital investment;

3) An electronic and communications infrastructure that supports high tech firms that engage in clean technologies;

4) A process that catalyzes the redevelopment of brownfields and development of the logistics industry; and

5) A marketing plan that effectively packages a broad range of natural and man-made amenities as a sustainable recreation industry. 

3.1 Employment

Labor statistics indicate that Northwest Indiana retains a significant labor force. Technically, the labor force includes those who are currently employed as well as those who are actively looking for work. It is significant, therefore, that the labor force in Lake County represents only 46.2% of the County’s population, a percentage that lags behind both LaPorte County and Porter County, which more closely mirror the state’s average of 50.7%. The fact that Lake County’s age distribution does not vary significantly from the state’s age distribution suggests that this lower percentage is less a function of high numbers of young and/or old citizens and more a function of a high number of “discouraged workers.”

Table 15:  Labor Force (2001)
Lake LaPorte Porter
Number 219,320 54,230 74,270
Source: Indiana Department of Workforce Development

Table 16:  Labor Force as Percent of Population (2001)

Lake LaPorte Porter Indiana
Percent 45.2
49.0 49.9 50.7
Source: Indiana Department of Workforce Development


Unemployment rates in Lake and LaPorte Counties are higher than the state’s average and continue to lag behind with respect to this important economic performance measure. Porter County maintains a rate at or just above the state level. After the high rates reported in 2002, all three counties are experiencing lower rates of unemployment. Again, however, it must be remembered that this indicator does not include discouraged workers.

Table 17:  Unemployment Rate (2003)

Lake LaPorte Porter Indiana

2003 5.9 6.5 4.9 5.0 2002 6.9 7.0 5.1 5.1 2001 5.3 5.0 4.0 4.4 2000 4.6 3.8 3.2 3.2 1999 4.3 3.6 3.0 3.0 Source: Labor Market Information Unit, Department of Workforce Development

Gross unemployment figures do not tell the whole story. The level of unemployment in the region’s Hispanic community is much higher than it is among non-minority citizens. And the comparable rates for African-American males and females living in Lake County is nothing short of catastrophic.

Table 18:  Unemployment Rate by Race Information 2,221 1,870 -15.8
Lake LaPorte Porter Indiana Financial Services 7,515 7,347 -2.2
African-American Female 13.7 9.3 1.1 11.4 Finance and Insurance 5,132 5,109 -0.4
African-American Male 17.1 10.7 4.3 12.9 Real Estate/Rental and Leasing 2,383 2,238 -6.1
Hispanic Female 9.6 9.6 7.0 9.5 Professional & Business 15,234 15,963 4.8
Hispanic Male 8.3 2.1 4.1 6.8 Professional/Scientific/Technical 5,300 5,412 2.1
White Female 4.8 4.2 4.0 4.2 Management of Cos.& Enterprises 1,128 1,097 -2.7
White Male 5.1 3.5 3.9 4.2 Admin Support/Waste Services 8,806 9,454 7.4
Source: U.S. Census Bureau Education & Health/Inclu Govt 41,829 43,123 3.1

Educational Services 16,509 16,735 1.4
A more detailed analysis of employment trends at the county level provides additional evidence of the dramatic changes now underway. Lake County experienced moderate growth in four industries over the two-year period between 2001-2003. Job gains were seen in administrative support/waste services at 7.4%, ag/forestry/fishing/hunting at 4.99%, professional Healthcare and Social Assistance Leisure & Hospitality Arts and Entertainment/Recreation Accommodation/Food Services Other Services (Private) Federal, State & Local Govt 25,320 22,731 8,219 14,512 7,479 27,476 26,388 22,753 8,056 14,697 7,693 27,815 4.2 0.1 -2.0 1.3 2.9 1.2
services at 4.8% and healthcare and social assistance at 4.2%. The most significant job losses were reported in the following sectors: information, utilities, manufacturing and the wholesale trade industries at 15.8%, 13.5%, 11.6% and 9.9% respectively. LaPorte County Total Employment Natural Resources & Mining Ag/Forestry/Fishing/Hunting Mining 2001 46,868 342 248 94 2003 45,413 401 262 139 % Change -3.1 17.3 5.6 47.9
LaPorte County lost a total of 3.1% of its jobs over the last two years. Major job losses occurred in the transportation/ warehousing industry at 19.8%, followed by manufacturing at 13.7%. Losses in the utilities, professional/scientific/ technical and admin support/waste services sectors were also noteworthy. However, LaPorte County enjoyed growth of 65.3% and 47.9% in the management of companies and enterprises and mining industries. Other growth industries included the real estate and natural resources/mining sectors. Construction Manufacturing Trade, Trans & Utilities Wholesale Trade Retail Trade Transportation/Warehousing Utilities Information Financial Services Finance and Insurance Real Estate/Rental and Leasing 2,341 10,406 9,061 1,181 5,975 1,609 296 724 1,503 869 634 2,257 8,980 8,387 1,195 5,645 1,290 257 690 1,624 873 751 -3.6 -13.7 -7.4 1.2 -5.5 -19.8 -13.2 -4.7 8.1 0.5 18.5
Employment in Porter County declined by 2.3%, with significant losses reported in the information (28.6%) and ag/forestry/fishing/hunting (24.2%) sectors. Manufacturing also experienced a 10.8% decline. A bright spot emerged in the arts and entertainment/recreation sector, which Professional & Business Professional/Scientific/Technical Management of Cos.& Enterprises Admin Support/Waste Services Education & Health/Inclu Govt Educational Services 2,901 805 49 2,047 8,890 3,368 2,632 718 81 1,833 9,421 3,241 -9.3 -10.8 65.3 -10.5 6.0 -3.8
added 176 jobs, growing 33.6% over the last two years. Healthcare and Social Assistance 5,521 6,180 11.9

Leisure & Hospitality 4,820 5,155 7.0
Table 19:  Employment by Industry (2003) Arts and Entertainment/Recreation 1,462 1,556 6.4
Lake County 2001 2003 %Change Accommodation/Food Services 3,358 3,599 7.2
Total Employment 194,624 190,914 -1.9 Other Services (Private) 1,417 1,307 -7.8
Natural Resources & Mining 445 443 -0.4 Federal, State & Local Govt 7,449 7,477 0.4
Ag/Forestry/Fishing/Hunting 182 191 4.9



Mining 263 252 -4.2 Porter County 2001 2003 % Change
Construction 11,868 12,173 2.6 Total Employment 53,508 52,253 -2.3
Manufacturing 32,042 28,341 -11.6 Natural Resources & Mining 295 258 -12.5
Trade, Trans & Utilities 40,362 38,169 -5.4 Ag/Forestry/Fishing/Hunting 95 72 -24.2
Wholesale Trade 6,887 6,203 -9.9 Mining 200 186 -7.0\
Retail Trade 25,818 24,674 -4.4 Construction 3,863 3,601 -6.8
Transportation/Warehousing 5,823 5,706 -2.0 Manufacturing 10,821 9,653 -10.8
Utilities 1,834 1,586 -13.5 Trade, Trans & Utilities 10,726 10,657 -0.6




Wholesale Trade 2,464 2,400 -2.6




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Retail Trade 6,390 6,410 0.3

Transportation/Warehousing 1,583 1,591 0.5

Utilities 289 256 -11.4 Information 668 477 -28.6 Financial Services 1,818 1,799 -1.0

Finance and Insurance 1,185 1,209 2.0

Real Estate/Rental and Leasing 633 590 -6.8 Professional & Business 3,614 3,432 -5.0

Professional/Scientific/Technical 1,475 1,585 7.5

Management of Cos.& Enterprises 83 94 13.3

Admin Support/Waste Services 2,056 1,753 -14.7 Education & Health/Inclu Govt 11,180 11,998 7.3

Educational Services 5,652 5,748 1.7

Healthcare and Social Assistance 5,528 6,250 13.1 Leisure & Hospitality 5,323 5,560 4.5

Arts and Entertainment/Recreation 524 700 33.6

Accommodation/Food Services 4,799 4,860 1.3 Other Services (Private) 2,069 1,872 -9.5 Federal, State & Local Govt 8,560 8,663 1.2 Source: Bruce Bendull, Labor Market Analyst, DWD,

Farming remains an important component of Northwest Indiana’s economy. Regionally, we are home to 1,905 farms averaging 268 acres per farm that produce on average products worth $51,874,666 annually. Among the three counties, LaPorte County is home to the most farms (817) and farming acreage (243,447).

Table 20:  Farming Profile (2002)

Lake LaPorte Porter
Total Number of Farms 482 817 606
Acres in Farms 127,782 243,447 145,779
Average Size of Farm 265 298 241
Market Value of Production $ 38,944,000 79,363,000 37,317,000

Source: U.S.D.A., Census of Agriculture

Corn and soybean production, in particular, remain strong. In 2001, LaPorte County accounted for 47.3% of the region’s corn production and 44.1% of the region’s soybean production. 

Table 21:  Bushels of Field Crop Production (2001)

Lake LaPorte Porter
Corn 8,608,600 15,524,000 8,674,000
Soybeans 2,490,300 4,059,800 2,646,400
Wheat 154,200 152,400 166,400
Source: U.S. Census Bureau


Northwest Indiana’s economy has long been associated with large firms. Although they are still a part of the landscape, large firms are increasingly confined to a very few industries, most notably steel, the gaming industry and healthcare. All firms in the region employing 500 or more individuals are listed in descending order. Firms in the region that employ 500 or more individuals are listed in descending order.

Table 22:  Major Employers (2002)

Company Location # of Employees
Ispat Inland Steel East Chicago 8,500
USX Corporation Gary 8,000
ISG Burns Harbor 6,000
ISG East Chicago 3,000
NIPSCO Merrillville 2,200
BP Whiting 1,800
U.S. Steel Portage 1,600
Empress Casino Hammond 1,600
St. Margaret Mercy Hammond 1,555
Community Hospital Munster 1,500
Methodist Hospitals Gary/Merrillville 1,417
Porter Memorial Valparaiso 1,302
Trump Casino Gary 1,200
Harrah’s Casino East Chicago 1,200
St. Anthony’s Medical Center  Crown Point 1,157
Cooper Industries Michigan City 1,100
Blue Chip Casino Michigan City 1,100
Majestic Star Casino Gary 900
St. Catherine’s Hospital East Chicago 853
LaPorte Hospital LaPorte 720
St. Mary Medical Center Hobart 700
St. Anthony’s Hospital Michigan City 680
Weil-McClain Michigan City 675
St. Margaret Mercy Dyer 659
Sullair Corporation Michigan City 550
Cerestar Hammond 550
Trans-Apparel Michigan City 500
Lever Brothers Hammond 500
Source: NIRPC, 2002

Small businesses are also important. Nationally, they constitute 97% of all U.S. exports and create two-thirds of all new jobs in the economy, employing over half of all private-sector workers. Entrepreneurship drives innovation, and many new firms are established in the pursuit a new ways to deliver goods and services. In 2001, small businesses accounted for 40% of the jobs in the high technology sector.

According to the Indiana Economic Development Council, small businesses account for 49% of the state’s establishments. A substantial portion of small businesses in the region employ between 0 and 9 employees. Those businesses which employ over 250 employees represent the smallest portion of the small businesses sector, yet employ the highest number of workers. Growth, in terms of employment, is occurring in all but one small business category in Northwest Indiana, those that employ between 50 and 99 workers, to the regional economic base.

Together, 15,632 small businesses in the region employed 285,810 workers in the first quarter of 2003. Between 2000 and 2001, both the number of small businesses and the number of workers employed by them declined. This appears to be reflective of the larger national economic downturn. During this same time period, only seven new small businesses were added to our economic base, not nearly enough to offset the loss of 388 small businesses.

The number of small businesses is now rebounding somewhat, but the number employed in this sector is still 5.3% below peak levels. Between 2002 and 2003, both the number of small business and the number of workers employed by them increased by 1%. During the same period, Porter County experienced a net increase of 2% in its number of small businesses and added 0.23% in employment. Lake County also experienced a net increase of 1% in the number of small businesses, and employment in this sector grew by 1.36%. LaPorte County’s performance was mixed, with a 0.6% decline in its number of small businesses and a 2.2% decline in employment. Businesses with 10 to 19 employees and 50 to 99 employees accounted for these losses.

These data highlight the need for the development of a coordinated economic development strategy for Northwest Indiana. A strategy of this kind would contribute to the development of a more balanced and environmentally benign economy. This does not mean that the region should concede the decline of its manufacturing base. It simply means that certain public policy choices pertaining to taxes, transportation and land use will encourage one form of development over another. These choices are too important to be left to chance and the vagaries of incremental decision-making processes. In our view, progress can only be sustained if a measure of coordination is employed. 

Table 23:  Small Business by Size and Employment (2003)
2000 2001
2002
2003
Lake County Class Size # Employed Class Size # Employed Class Size # Employed Class Size # Employed
0-9 6,870 21,277 6,666 20,846 6,779 20,973 6,869 21,091
10-19 1,348 18,171 1,340 18,310 1,343 18,207 1,339 18,227
20-49 1,070 32,711 1,003 30,209 990 30,147 998 30,180
50-99 373 25,960 366 25,270 356 24,365 359 24,497
100-249 212 30,787 199 28,887 185 26,928 186 27,243
250 & Up 74 70,467 77 70,821 79 66,438 80 68,361
Total 9,947 199,373 9,651 194,343 9,732 187,058 9,831 189,599
LaPorte County




0-9 1,791 5,833 1,754 5,730 1,799 5,800 1,815 5,863
10-19 362 4,917 344 4,624 338 4,471 312 4,146
20-49 236 7,180 227 6,868 238 7,152 242 7,410
50-99 97 6,464 92 6,080 87 5,840 78 5,194
100-249 49 7,078 50 7,408 49 7,367 49 7,240
250 & Up 30 15,937 29 15,819 28 15,343 28 15,105
Total 2,565 47,409 2,496 46,529 2,539 45,973 2,524 44,958
Porter County




0-9 2,273 6,828 2,262 6,818 2,318 6,829 2,372 6,985
10-19 420 5,623 411 5,457 397 5,343 429 5,758
20-49 306 9,475 307 9,397 318 9,544 308 9,608
50-99 114 7,958 113 7,793 104 7,238 97 6,848
100-249 62 9,183 57 8,491 53 7,666 55 8,370
250 & Up 17 16,111 19 15,516 18 14,517 16 13,684
Total 3,192 55,178 3,169 53,472 3,208 51,137 3,277 51,253
Source: Bruce Bendull, LMI, DWD









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3.2 Leading Industries

The state has identified four industry clusters— health sciences, advance manufacturing, 21st Century logistics and information technology—as future growth areas that can “energize” Indiana’s economy, both with respect to business investment and high wage employment. Locally, investment in each of these clusters, as well as the hospitality/recreation cluster, is well-underway.

Health Sciences

The Center for Workforce Innovations recently conducted a survey of area healthcare providers and found that the healthcare industry is one of our fastest growing industry clusters. While the percent change of employers in the three subcategories of this important cluster are mixed, increasing employment levels and wages were recorded between 2001 and 2002. The average wage in our 16 hospitals in the region is $34,908. Sonographers, registered nurses, radiological and medical technicians report the highest median hourly wages at $21.82, $19.04, $17.65 and $18.90 respectively. Further, healthcare employers acknowledge a continuing need for qualified workers in key positions, such as diagnostic imaging, health technicians, pharmacists and therapists. Due to a persistent supply shortage, which is compounded by turnover, employers are resorting to sign-on bonuses, flextime and mandatory overtime. When combined with other expenses, such as Medicare/Medicaid, hospitals are now operating with net margins at or below 5%.

Table 24:  Healthcare Profile (2003)

NAICS Employers Employment Ave. Annual Wages

Ambulatory healthcare services 2002 1,238 11,925 43,159 2001 1,219 11,698 42,555 Percent Change 3.3 1.9 1.4

Hospitals 2002 16 16,514 34,908 2001 16 15,913 33,038 Percent Change 0 3.8 5.7

Nursing/Residential Care Facilities 2002 107 7,594 20,344 2001 109 7,055 19,518 Percent Change (1.8) 7.6 4.2

Source: Center of Workforce Innovations, Healthcare Industry Report 2004

Advanced Manufacturing

Indiana University Northwest Professor Donald Coffin recently predicted in the Indiana Business Review Outlook for 2004 that Northwest Indiana would experience a 3% decline in employment within the advanced manufacturing sector in 2004, even though productivity would increase by 0.7%

Reflecting this trend, employment in the steel industry has declined by 4.2% per year since 1991, while productivity increases have averaged 3.6% annually over the same time period. In fact, in the face of increased international competition and saddled with the burden of substantial legacy costs (i.e., the costs of retirees’ healthcare and pension benefits), the steel industry reeled through much of the 1990s. From 2000 to 2002, the overall production of steel in Indiana declined by 19.7%. Additionally, three of the region’s steelmakers (i.e., LTV, Bethlehem Steel, and National Steel) were forced to declare bankruptcy. Despite this downturn, the steel industry in the United State remains one of the most efficient in the world.

Table 25:  Tons of Steel Produced in Indiana (2002)

2002 20,600,000
2000 25,667,000
1990 21,231,000
1980 19,820,000
Source: Indiana Department of Commerce

With the imposition of temporary tariff relief in 2002, the steel industry secured time to reorganize, a process that is now underway. The assets of bankrupt LTV were purchased by ISG, a newly formed steel company, and Bethlehem Steel and National Steel were purchased by ISG and United States Steel respectively.

21st Century Logistics

The Port of Indiana is cited here because of its significant potential to the region. The nexus of major highways, railways and the southern terminus of the Great Lakes, all of which are located on the doorstep of the nation’s third largest city, suggest that further development of a vibrant intermodal transportation industry might be in order. In fact, the decline of the manufacturing sector and the increasing efficiency of those manufacturers who remain make land available for this purpose. Recent developments bode well for this prospect, most notably, the repeal of the state’s inventory tax. Other barriers must still be overcome, however, including the resolution of environmental impacts that could attend to increased use of the Port’s facilities. For this reason, it is more likely that the Port of Indiana will play a complementary role in an intermodal network that is largely rail and highway-based.

Table 26:  Tons Processed at Ports of Indiana (2000)

2000 2,264,628
1990 1,686,139
1980 1,250,312
Source: Ports of Indiana

Professional Services

According to Richard Markwart, an Innovation Fellow at Rose-Hulman Ventures who consults with the Hammond Development Corporation, Indiana’s job deficit in technology services costs the state almost $350 million in tax revenue each year. Only 1.5% of Hoosiers are employed in the information technology, engineering and architectural services and research and development employment clusters. The outlook in Northwest Indiana is particularly grim with respect to employment in these kinds of jobs. For example, Lake County is now home to a mere 1/7th of the per capita national average of IT jobs. Our current deficit in this employment category is 3,201 jobs. At the same time, Northwest Indiana should be competitive with respect to this employment cluster, given our close proximity to the Chicago market, the kind of geographic centrality that is desirable for backup and disaster recovery sites, a robust transportation infrastructure and our proximity to Chicago’s data communications infrastructure.

Hospitality/Recreation

The gaming industry’s contribution to Northwest Indiana’s economy over the last 7 years has been significant. With over 18 million boardings in 2002, the region’s five casino boats have exceeded the expectations of those who promoted the industry in the 1990s. The construction industry has benefited significantly from the development of public infrastructure that supports the industry as well. And the benefits in terms of jobs have already been noted.

Table 27:  Gaming Boats Admissions (2002)
Casino $
Blue Chip 2,670,288
Harrah’s 3,868,094
Horseshoe 3,778,642
Majestic Star 1,797,564
Trump 1,795,318
Source: Indiana Gaming Commission

The impact on the tax bases of the host cities and counties
has been no less dramatic. In all, gaming boats in Lake and

LaPorte Counties paid $283 million in taxes in 2002. Since 1996, more than $850 million in gaming tax revenue have been distributed to various units of local and state government. Although the use of these revenues has engendered some controversy, a significant share of these tax proceeds have been used for infrastructure development. The gaming industry is not without its critics. While Northwest Indiana’s five gaming boats are generally regarded as “good corporate citizens,” it would behoove the state to monitor the social impacts of gambling on an ongoing basis, especially if this can be accomplished in conjunction with the “problem gambler” programs all of the casino boats now have in place.

Table 29:  Gaming Boat Taxes Paid (2003)

Table 28:  Gaming Tax Distributions (2002)
Casino $
Build Indiana Fund 502,253,579
Cities with Gaming Boats 253,754,956
Lake County 74,163,392
LaPorte County 1,217,470
Convention and Visitors Bureaus 8,633,809
Division of Mental Health 8,633,809
Source: NIRPC

Casino $

Blue Chip 67,332,062 Harrah’s 95,039,089 Horseshoe 112,077,559 Majestic Star 38,513,802 Trump 35,518,193

Source: Indiana Gaming Commission

The region’s commerce and workforce investment boards have embraced these several employment clusters and have added the hospitality/recreation industry because of our vibrant casino industry, our proximity to Chicago and the shoreline. In order to stimulate economic growth, the local workforce must match the needs of the business community. In changing times, this translates into a need for a highly skilled and trained workforce.

To this end, the Lake County Integrated Services Delivery Board and the Center of Workforce Innovations have signed a regional Community Workforce Compact to promote the local workforce and economy. The Compact is a grassroots effort involving over 150 community volunteers from seven counties. The Compact is being advanced by four goal teams, each of which is focused on a particular area: increasing skill levels, preparing youth for success, diversifying the economy, and improving employer/employee systems. Each team is working on short-term objectives, including “WorkKeys” job assessments, the development of a virtual career center

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at www.cwcompact.com and the updating of regional site selection database. Longer-term goals are being pursued as well. Prospects for Northwest Indiana’s economy cannot easily be separated from the implications that economic development or stagnation hold for individuals and families. Historically, high paying jobs are the most effective antidote to poverty. At the same time, however, regional and sector-based analyses can obscure some of the impacts that follow in the wake of economic change. They can also mask impacts that fall disproportionately on certain sectors of the community. This section of the report should thus be read together with the preceding section. It is closely related to economic development, that is, to the creation of a thriving community. It focuses, first, on individual and household income and, second, on poverty.

Grade: D Trend: Promising

The grade of “D” is assigned to this domain in order to call attention to the need for coordinated planning pertaining to Northwest Indiana’s economic future. At the same time, there is good news with respect to our economy. Indeed, a fundamental transformation is now taking place. The restructuring of the steel industry is underway. The gaming industry in Northwest Indiana has stabilized at a high level of productivity. Much of the infrastructure needed to support the development of a viable logistics industry is in place. The region’s housing market is strong. The inventory tax has been abolished. And the property tax imbalance between homeowners and the business community is now being addressed.

At the same time, the kind of coordinated planning that will be required to support a thriving community is not yet in place. Tax policy, land use policies and infrastructure development, especially transp