REGIONAL AND COUNTY ECONOMY

Commuting Area Population, Labor Force and Labor Availability

Starke County occupies a unique geographic niche in Indiana. The county has a small population base of 23,596, a relatively small economy, and an employment base of approximately 7,400 workers. It has a small town and rural setting, yet is located within the large industrial region of northwestern and central Indiana. Northwestern Indiana is home to a large share of the nation's steel industry (Gary and region), and north central Indiana is home to a variety of manufacturing industries such as automotive, aircraft parts, steel, medical instrument, and recreational vehicle industries. (South Bend, and Elkhart region).

Almost one half (46.1%) of the resident labor force in Starke County works outside of the County. (Table 5a). Some 5,713 workers travel to jobs, primarily in the adjacent industrial counties. Map 3 and Table 6a demonstrate the destination of the daily commuting workforce based in Starke County. The average commute distance is 37 miles, and average commute time is 48 minutes to these northwest and central Indiana counties. A substantial number of workers (500 to 700) commute to the Gary region (Lake County) and the South Bend region (St. Joseph County). The commute distance here is considerably longer at around 50 miles, with a commute time of about an hour.

The size of the outbound commuting labor force is an important asset to economic development. The residents of Starke County choose to live in the County to achieve a higher quality of life. New or expanded industry in Starke County could tap into this source of high quality labor. Offered a high quality job close to home would be an attractive prospect to a commuting worker, some of who are commuting two hours per day round trip.

In bound commuting to Starke County also occurs, but it is much less significant than out bound commuting. Some 713 workers from outside the County commute to Starke County employment locations. This is about 9.6% of the employment base of Starke County. (Table 5b). Map 4 and Table 6b indicate the source counties for the inbound commuting workforce.

The Regional Labor Market

The regional labor market within which Starke County is located can be defined on the basis of workforce commuting to and from the county. Defining the Regional Labor Market as those counties with commuting flows greater than 100, the market becomes a nine county region in northwest/central Indiana. (Table 7). The population base of this region is about 1.3 million, and the labor force is 636,000. This is very large in the context of the small population and economic base of Starke County.

The character of this Regional Labor Market is varied. Some counties such as Elkhart, St. Joseph, Porter, and Lake counties have a large industrial and population base. Other counties such as Pulaski and Jasper counties share the rural and small town atmosphere with Starke County.

Table 8 illustrates the small size of the urban centers within Starke County, in relation to the large communities in the adjacent Regional Labor Market. Lake County has a substantial number of larger communities, such as Gary and Hammond, for example.

Trends in Employment by Industry - Starke County and the Regional Labor Market

The structure of the economy of Starke County, in comparison to the Regional Labor Market (the "region") and the nation is illustrated in Table 9. The distinguishing features of the Starke County economy are a much higher representation of agriculture, and somewhat higher representation of retail trade, and government than the region or the nation. The county has a much lower representation in the services and finance, insurance, and real estate sectors, and somewhat lower representation of the construction sector within its economy.

The representation of manufacturing in the Starke County economy in 1990 approximated the national average, but by the year 2000, the county increased its commitment to manufacturing in sharp contrast to the declining regional and national trend. Note that the region still has a much higher representation in manufacturing than the nation, which reflects the industrial character of the region.

During the 1990s, the service trades become a much larger component of the economies of both the region and nation. The share of service trade employment also increased in Starke County but the trend was not as pronounced. The retail and wholesale trade sectors generally held a constant to mildly decreasing share of total employment at the regional and national levels.

A declining share of total employment for the trade sectors is more pronounced in Starke County. These trends are likely due to the phenomenon that retail and wholesale trades are consolidating into larger urban centers or larger shopping units on a regional basis, and that higher order business services are available only at larger urban centers. Starke County may not have the population base locally to sustain these activities.

Average annual employment growth during the 1990s in Starke County, in comparison to the region and the nation are found in Chart 1 and Table 10. Chart 1 illustrates that the average annual rate of total employment growth in Starke County and the region exceeded that of the nation during the early part of the economic expansion. By 1995 and 1997, the nation's growth rate eventually grew to exceed that of the region and Starke County respectively.

The key drivers of the Starke County economy during the 1990s were construction, manufacturing, and finance, insurance, and real estate. The growth of these sectors (except construction) exceeded the nation, and the region, and had the balance of the economic sectors, such as services, wholesale, and retail trades, grown at national rates, growth in Starke County would have exceeded the nation and region. However, the average annual growth rate of total employment in Starke County during the 1990s was 0.53% per year, in contrast to 1.4% per year at the regional level, and 1.85% at the national level.

During the period of maximum growth in Starke County from 1992 to 1997, the average annual growth rate of total employment in the county was 2.58%. This exceeded the regional and national growth rates of 1.85% and 2.01% respectively.

Trends in Labor Force growth, Unemployment, and Population Growth

Labor force growth ramped up quickly during the early 1990s in the region, and particularly in Starke County (Table 11 and Chart 2), mirroring the sharp increase in total employment. (Chart 1 and Table 10). During the period 1992 to 1995, labor force growth in Starke County exceeded growth in the region and nation. Since 1995, the growth in labor force has been mainly negative, below the steady national growth trend ranging between 0.68% and 1.76% per year. Starke County appears to follow, at a lower level, the regional trend of mildly negative labor force growth since 1995.

Slower growth in total employment in the region, and for two years, negative growth in Starke County in the post 1995 period (Chart 1) did not however immediately lead to higher rates of unemployment. The trend in unemployment continued its decade-long fall until 1998. (Chart 3 and Table 12). Negative labor force growth resulted initially in declining unemployment, but after 1998, slow or negative employment growth in Starke County and the region began to trend the unemployment rate upward. However, these unemployment rates at the end of the 1990s are low relative rates experienced during the 1990-91 recession.

The national unemployment rate stopped declining during the year 2000, and began to increase during 2001, as the economy fell into recession during the first quarter of 2001. The region and the Starke County followed the nation into the recession.

In summary, throughout the 1990s the following trends in unemployment rates are evident. Both Starke County and the region track the national downward trend in unemployment for most of the decade. (Chart 3 and Table 12). Starke County rates exceeded nation by one to one and one half points, while the region had rates about a point less than the nation. The onset of the 2001 recession in terms of higher unemployment rates appeared to have an earlier impact in the region and Starke County (1998) than in the nation (2000).

Population growth on an annual basis during the 1990s was a steady 1.1% to 1.4% per year in the nation, and a steady lower growth rate between 0.44% and 0.87% in the region. See Table 13 [will open in new window] and Chart 4 [will open in new window]. Population growth rates in Starke County varied over a wide range over the decade. Population decline was experienced during both the early and late 1990s, and very high rates of population growth were experienced for four years during the mid 1990s. During three of the four years, (1995 to 1997), the population growth rate for Starke County exceeded the national rate.

Population growth over the entire decade of the 1990s is summarized in Table 14. The population base of Starke County, considering the wide fluctuations in year to year growth, increased by 3.56% during the decade. This is below the regional population growth of 7.06%, the state growth of 9.67%, and the nation's growth of 13.15%.

The growth experience within the region is varied. Population growth of three out of nine counties experienced double-digit growth that exceeded the nation. Four of nine counties exceeded average state-wide growth. Starke County is among the group of three counties that experienced the lowest rates of growth in the region, in the range of approximately 2% to 3.5%.

The Major Employers in Starke County , those establishments or organizations that employ more than 10 people, appear in the table below. Note among the 10 largest employers, (those with an employment level exceeding 100), there are 5 involved in manufacturing. This illustrates the County's major commitment to manufacturing as a source of growth. There are also 10 manufacturers among the 20 employers with an employment level between 10 and 99 employees.