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Editorials

Close the wage gap

Cutter
Sampson

A recent study showing how the area’s wage gap continues to hurt economic growth coupled with Monday’s release of a rising unemployment figure may leave local economic development officials feeling disheartened. But the statistics should also confirm that a shift in strategy that focuses on increasing wages rather than just creating jobs is the prudent course.

Allen County Insight, a market analysis from the Community Research Institute at IPFW, should put to rest arguments that the area’s low cost of living compensates for local wages that consistently lag behind state and national averages. The average wage in Allen County in 2012 was $39,803, which is nearly $10,000 below the national average. It is also below Indiana’s average wage of $40,248.

That gap puts the region at a significant disadvantage.

“Right now, for every $1 someone in the U.S. makes, a northeast Indiana resident only makes 80 cents,” said John Sampson, president and CEO of the Northeast Indiana Regional Partnership. “This is why the focus of the Vision 2020 initiative is on reversing the downward trend in per capita income. We simply cannot attract and retain the talent our region needs without addressing that gap. We will not be able to compete for talent in a global economy if wages do not keep pace with the nation.”

Mike Packnett, president and CEO of Parkview Health, is chairman of Greater Fort Wayne Inc. and the Northeast Indiana Regional Partnership. He said it was similar wage gap information from four or five years ago that was the impetus for the Partnership’s Vision 2020 project.

“We believe it’s all about education and retaining talent,” Packnett said. “It’s a year-after-year focus to educate and retain that talent and create and retain good jobs. We have to ensure we have the right talent to fulfill the needs of current companies and also those that want to come to Fort Wayne.”

He said an important part of that effort is The Big Goal, which is to increase the number of residents with some training or education beyond high school from about 32 percent to an average of 60 percent in the 10-county region served by the Partnership.

The increase in educational attainment will help attract companies offering higher-paying jobs.

On Monday, preliminary figures from the Indiana Department of Workforce Development showed that unemployment in metro Fort Wayne increased to 8.5 percent in July. The rest of Indiana held steady at a seasonally adjusted rate of 8.4 percent for July and had the same unemployment rate in June.

There are reasons for optimism in all of the statistics, said Ellen Cutter, director of the Community Research Institute. While Allen County reported an increase in unemployment, the six surrounding counties recorded a decline. There was also an increase of about 2,500 jobs compared to last July.

“We still have a long way to go to see the kind of recovery seen in other states and the nation,” Cutter said. “We’re really kind of stalled out, and we want to see some greater momentum.”

She said the lesson for local economic development officials is to continue to concentrate on creating jobs with wages that are at or above the national average.

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