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Last updated: Mon. Sep. 01, 2014 - 09:27 am EDT

Wage gap persists locally

Residents feel Labor Day no longer reason to celebrate

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At a glance

Labor Day

The first observance of Labor Day was likely on Sept. 5, 1882, when some 10,000 workers assembled in New York City for a parade. That celebration inspired similar events across the country, and by 1894 more than half the states were observing a “working men’s holiday” on one day or another. Later that year, with Congress passing legislation and President Grover Cleveland signing the bill on June 29, the first Monday in September was designated “Labor Day.”

Source: U.S. Department of Commerce

The U.S. Department of Labor says today is dedicated to the social and economic achievements of American workers. In essence, it's a national tribute to their contributions to the nation's prosperity and well-being.

Gaile Davenport doesn't feel honored.

“I'm a member of what they call the working poor,” said the 61-year-old Fort Wayne adult caregiver. “I have enough to make it, but it's tough. I make just enough that I don't qualify for any social assistance.

“It's not right, and it is frustrating.”

Her feelings jibe with a U.S. Conference of Mayors report last month that sparked fresh debate over the wage gap. True, the country has restored the 8.7 million jobs lost during the recession – but earnings have slid 23 percent since then.

Davenport said she makes about $33,000 a year, which is below the median income of $49,301 in Fort Wayne, according to the report.

And the rank and file, statewide, lag woefully behind the CEOs running the companies, based on an Indiana AFL-CIO analysis.The average CEO earned $3.9 million last year, compared with $39,841 for the average Hoosier.

“It's like how much money do they really need?” Davenport said. “What they're paying people is pathetic when you think about it.”

Factory worker Mike Asbury said companies should consider the economic impact when determining various pay grades.

“Instead of shipping jobs to Mexico and lowering the pay here, they should realize that if you pay people a good salary they're only going to turn around and spend that money in the community,” Asbury said.

A Standard & Poor's report suggests something needs to be done. The rating agency said wage inequality between the wealthiest Americans and the rest of us has made the economy more likely to experience boom-bust cycles.

S&P analysts also blamed the wage gap on the slow economic recovery. Beth Ann Bovino, chief U.S. economist at S&P, called economic disparities “damaging to growth.”

Derek Thomas is a senior policy analyst at the Indiana Institute for Working Families, which conducts research and advocates public policies that help Hoosiers maintain economic self-sufficiency.

He said the term “working poor” is the way many are beginning to describe themselves, particularly those who used to identify as middle-class earners. “Many are making it by the skin of their teeth,” Thomas said.

The vanishing of high-paying manufacturing jobs is the obvious scapegoat, he said, but the bigger issue is that the positions replacing those jobs don't compare in salary or benefits.

Thomas said a person will have to work two jobs making $14 to $16 an hour to see the kind of money many former factory workers used to feed their families on.

“Cities and government leaders will offer incentives to companies to invest,” Thomas said, “but they shouldn't only be concerned with a business-friendly environment. They need to consider working families.”

Trickle-down economics is a myth, he said, because instead of wealth gradually flowing from the richest Americans to the poorest, the poor stay impoverished.

“It's not working,” he said.

Some employers not known for good wages are responding. Retailers are beginning to offer benefits traditionally reserved for management.

For example, Fresh Thyme Farmers plans to open in the former Borders books store at 4310 Coldwater Road with 60 percent of the staff being full-time with benefits. Fresh Thyme is slated for a Oct. 23 opening, with some supervisory positions paying as much as $50,000 a year.

Founded two years ago, Fresh Thyme is a full-service specialty retailer focusing on natural and organic foods.

Rebecca Stephens is store director for the Fort Wayne location. She had a steady flow of candidates during a recent IPFW job fair and has most of her 150 positions filled.

“We want to create an environment where people aren't just looking for a job, but a career,” Stephens said. “By having a large percentage of employees full-time and with benefits we just don't hire talented workers, we retain them.”

When workers feel valued, Stephens said, turnover decreases considerably, which saves a business money in training and related costs.

“We're a very young company, so we want to develop from within,” she said. “Our entry-level position is a clerk, but we want our employees to know they can grow.”

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