Elkhart County’s unemployment rate fell in June, according to figures released Friday (July 17) from the Indiana Department of Workforce Development.

Elkhart County’s rate dropped from 17.5% in May to 16.8% in June.

elkhart-city-logoThe city of Elkhart’s unemployment rate also dropped, from 19.2% in May to 18.7% in June.

The drop in Elkhart’s unemployment rate could mean a couple of things. One possibility is that the labor force is shrinking. Some people have found work in areas such as farming or simply retired, said Michael Hicks, director of the center for business and economic research at Ball State University.

Another possibility is that workers are finding work with smaller businesses. Hicks said small firms — those with maybe 30 to 50 workers — are playing a larger role in manufacturing. Elkhart has gotten a lot of national attention lately, Hicks said, and its manufacturing history holds a lot of appeal to companies looking to set up shop in the Midwest.

Scott Tapley, vice president/portfolio manager with 1st Source Bank, said he couldn’t comment about new, smaller businesses coming to town. But he wouldn’t be surprised if they started to spring up.

Tapley said Elkhart is an entrepreneurial area full of creative thinkers. And the creation of small businesses helps end recessions, he said.

Elkhart County has posted unemployment figures in the double digits for 10 months. Hicks said the fallout from such figures can be hard on a community. Social service agencies see a lot of stress as contributions are down and needs rise, he said.

Hicks also said there’s a risk of “brain drain” with a prolonged recession. As young people graduate college they may be less apt to want to return to a community with a high unemployment rate.

But he said it’s doubtful Elkhart will push too many people away. Elkhart may have been one of the first areas to head into the recession, he said, but only by a few months.

He said it’s also too soon to tell whether the stimulus package is doing anything to boost the economy. He said it would take at least six months from when the package was passed at the end of February to see any impact.

“Anybody that thought that this was going to have an effect in less than six months other than on the confidence that the economy would eventually recover was living in Neverland,” Hicks said.