Twenty years ago, Facebook was little more than a social networking site for college students. Today, the company, now known as Meta, is one of the world’s largest technology firms, a major player in artificial intelligence, and is building a data center right here in Southern Indiana.
Thinking about Meta and other AI companies such as OpenAI and Anthropic got me reflecting on just how much the Southern Indiana economy has changed over the past two decades. Twenty years ago, Southern Indiana’s corporate landscape looked very different. Names such as Pillsbury, Key Communications, Colgate, Hitachi and Jeffboat were prominent employers. Manufacturing was the region’s largest sector, representing roughly 20 percent of all jobs and exceeding healthcare employment by nearly 8,000!
Back in 2005, the average weekly wage in Southern Indiana (Clark, Floyd, Harrison, Scott, and Washington) was $601. Today, based on the fourth quarter of 2025, that figure stands at $1,106, an increase of 84 percent. That’s an average annual wage growth of 3.1 percent. Over the same period, inflation averaged approximately 2.5 percent per year.
In other words, wages in Southern Indiana have generally grown faster than the cost of living, resulting in meaningful gains in purchasing power and quality of life for many workers. The question is why. To answer it, we need to examine which industries grew, which declined, and how wages changed across sectors.
The largest increases in absolute average weekly wages occurred in finance and insurance, where wages grew at an annual rate of 3.5 percent, and real estate, where wages grew at an annual rate of 5.5 percent. While not every occupation in these sectors requires a college degree, many are knowledge intensive jobs that depend on specialized skills and professional expertise. Wage growth was impressive, although employment growth was relatively modest, with the sectors adding approximately 450 jobs over the twenty-year period.
Healthcare and social services, which include ambulatory health care, hospitals, nursing and residential care facilities, and social assistance, was the leading growth sector, adding approximately 8,000 jobs. This is as many as manufacturing, retail trade, transportation and warehousing, and accommodation and food services combined. Wage growth of 2.4 percent trailed both inflation and the regional average. Today, healthcare and social services have surpassed manufacturing as the region’s largest sector, employing roughly 2,000 more workers.
Transportation and warehousing, a cornerstone of the Southern Indiana and Greater Louisville economy, posted the second largest gain in employment, adding approximately 6,000 jobs. Average weekly wages increased by $441 during the period, translating into annual wage growth of 2.4 percent, slightly below the average rate of inflation.
Wholesale trade, another logistics related sector, also performed well. It added more than 1,100 jobs while recording annual wage growth of 3.7 percent, comfortably exceeding inflation.
One of the strongest performers was professional, scientific, and technical services. This knowledge-based sector includes engineers, consultants, computer professionals, architects, and other highly skilled occupations. Average weekly wages increased by $752, while employment grew by nearly 1,700 jobs. Annual wage growth averaged 3.5 percent, outpacing inflation by a full percentage point. Few sectors combined strong job growth and strong wage growth as effectively.
Turning to the production sectors, both construction and manufacturing experienced solid wage gains. Construction wages grew at an annual rate of 3.8 percent, while manufacturing wages increased by 3.4 percent annually. Construction added 544 jobs despite the severe impact of the housing collapse during the Great Recession.
Manufacturing presents a more nuanced picture. While the sector lost approximately 2,000 jobs over the twenty-year period, total wages paid in the sector increased by 76 percent and average weekly wages nearly doubled. This pattern is consistent with productivity gains that allow manufacturers to produce more output with fewer workers.
Another notable source of job growth was accommodation and food services. The explosion of restaurants, entertainment venues, and lodging options throughout Southern Indiana is evident in the data. The sector added nearly 4,000 jobs and posted annual wage growth of 3.9 percent. Although average wages remain well below the regional average, workers in the industry nevertheless experienced meaningful wage gains over time.
The strongest combination of wage growth and employment growth occurred in finance and insurance, real estate, professional and technical services, and wholesale trade. Some of these sectors tend to be knowledge intensive and skill driven, reflecting broader changes in the regional economy. The two industries that generated the most jobs, healthcare and social services and transportation and warehousing, saw wage growth that lagged both inflation and the regional average.
The Southern Indiana economy of 2026 is not the Southern Indiana economy of 2005. While manufacturing and logistics remain important pillars, the region has steadily added more knowledge based and professional occupations. Healthcare has replaced manufacturing as the region’s largest employment sector.
The arrival of companies such as Meta and the growth of artificial intelligence are reminders that economic change never stops. The jobs of the future may look very different from the jobs of the past, but the data suggest that regions able to attract and grow higher skilled industries are also the regions most likely to see rising wages and improving living standards.
As we look ahead, digital infrastructure will become increasingly important to economic competitiveness. Data centers are emerging as the highways, railroads, and industrial parks of the AI economy, providing the computing power needed to support the next generation of businesses and innovations. Regions with robust digital infrastructure, reliable power, and access to advanced computing resources will be better positioned to attract investment, support entrepreneurship, and compete for the jobs of the future.
Just as access to rivers, railroads, and interstate highways helped shape the Southern Indiana economy of the past, access to digital infrastructure may help shape the Southern Indiana economy of the future.