WNC's average wages inch up, but still trail NC, US

When it comes to pay in Western North Carolina, the image that often comes to mind is that of a hamster on a wheel — spinning like crazy but not really getting anywhere.

"When I interviewed for a job when we first moved to Asheville almost 10 years ago, I was told, 'This is what I'm offering, and if that doesn't work for you, then there are 10 other people who will take it,'" said Jennifer Vincenzo McLucas, who's worked as a writer and public relations professional in Asheville. "Of course, the pay was about one-third less than what I would have been paid for the same type of job in Atlanta or Charlotte. And, to be honest, all other subsequent jobs have had similar or less pay."

Overall, she's got a common lament for the Asheville job scene: "Not much salary growth in 10 years."

But federal statistics out this month offer a ray of hope. Wages are trending up for the first time in years.

Buncombe County’s average weekly wage of $796 during the first quarter of this year jumped by $59, or 8 percent, over the same period a year ago, according to a U.S. Bureau of Labor Statistics report.

"This is the largest annual absolute and percentage increase in at least 15 years," said Tom Tveidt, an economist and founder of Syneva Economics in Asheville, adding that the database goes back to 2001.

"Similarly, for the Asheville metro — Buncombe, Henderson, Haywood and Madison — the average weekly wage of $768 is up $56, or 7.9, percent over last year," Tveidt said. "Again, the largest annual absolute or percentage increase in at least 15 years."

Those figures also topped both the national increase of 6.6 percent and the statewide increase of 6.9 percent, Tveidt noted. Of the nation's 347 largest counties, Buncombe ranked 45th for its annual percent change in wages.

'Have my wages gone up enough? No.'

But before popping champagne corks, keep in mind that Buncombe and the metro still lag national and statewide averages.

Tveidt noted that the national weekly income of $1,111 for the quarter is considerably higher than wages in the mountains. Buncombe is 40 percent lower, while the metro is 45 percent lower.

Compared to statewide salary figures of $991 weekly, Buncombe is 24 percent lower, and the metro lags by 29 percent.

The Asheville area is also notorious for having one of the highest costs of living in the state, making it even tougher for working folks to get by.

"My wages have gone up over the past year, but have they gone up enough? No," said Nasha McMillan, a 45-year-old Asheville resident who works at a fast food restaurant.

McMillan, who has two grown children, also has worked as a corrections officer in Halifax County and as a personal assistant. She made more money as a prison guard but didn't like the work and came back to Asheville.

She's worked for 30 years and says she believes wages are lower here because of the nature of our economy. People want to live here for the natural beauty and the culture, and the economy caters to visitors.

"I think people in Asheville, they don't care about anything but tourists," McMillan said. "They're not worried if the people who work here can actually afford to survive here."

A complex, national problem

Stagnant pay and low wages are a persistent, complex problem in the mountains, in part because of the departure of higher-paying manufacturing jobs here over the past two decades and an economy that relies on generally lower-paying tourism and service industry occupations.

Tveidt compiled North Carolina Department of Commerce data that show the job growth for Buncombe County from 2014-17 came mostly in lower paying jobs — 16.4 percent of net job gains came in the top segment of wage industries, compared to 40.3 percent in the bottom quarter wage industries, which include retail, accommodation and food services; and arts, entertainment and recreation.

The difference in wages is significant. For example, manufacturing jobs in Buncombe County in 2017 average weekly pay of $1,052, double that of retail at $513 and almost triple that of accommodation and food services at $374.

The Asheville metro area has seen wage growth over the past five years, but it has lagged behind the state and nation. From 2012-17, average wages, not adjusted for inflation, climbed from $691 to $768, an 11.1 percent rise. But during that same time, average wages climbed by 14 percent in North Carolina and 13 percent nationwide.

Ken Flynt, associate dean of the Western Carolina University College of Business, also serves as chairman of the Haywood County Chamber of Commerce and sits on the executive committee of that county's Economic Development Council. Wages traditionally have lagged in the mountains because people want to live here, and because so many people want to visit here, he said.

"We do have a heavy mix of service and tourism-type industries, which tend to be lower wage, and that’s certainly a key part of it," Flynt said. "In addition to that, we have kind of an unfortunate circle here. We have virtually full employment, or maybe even slightly beyond full employment, but the problem is, in terms of wage impact, we don’t have enough high-paying industries."

The biggest reason for that, Flynt said, is kind of a chicken and egg problem: We haven't been able to retain highly trained workers, and people often leave the area once they have acquired high-level skills, seeking high-paying jobs in other areas.

In short, we lose the people who could be more productive and make higher wages. Then when companies want to locate here, we don’t have enough highly trained and ready-to-work folks, Flynt said. So the companies locate elsewhere.

Flynt was quick to add that the Asheville area has snagged some real prizes in recent years, companies such as GE Aviation, which expanded its high-tech plant in Asheville, and truck engine manufacturer Linamar, which located in Arden.

Still, wage stagnation and lower pay lingers here. It's been a tenacious, perplexing problem for years nationwide, even as the economy has returned to full employment. To a degree, the mountain region is caught in the same trap.

As Flynt sees it, three factors come in to play with the national dilemma of wage stagnation:

• Growth coming out of the Great Recession of 2008-09 has been anemic. Flynt notes that historically, annual growth coming out of even some of the minor recessions since World War II has come in at 4, 5 or even 6 percent.

"We've struggled along with 1, 2 and occasionally maybe 3 percent growth," Flynt said. "We haven't had nearly as much growth as we typically do."

• Inflation has been almost negligible.

"If you look at a long span of history, post-World War II, there have been a lot of periods where inflation carried wages up 3, 4, or even 5, even 6 percent," Flynt said. "We’ve only had 1 or 2 percent inflation, and more likely one than two most of the time."

• Globalization holds wages down.

"So many of our jobs — this is true in U.S., and it's true in Asheville to some extent — are in what I call mid-level or low-level technology kinds of positions," Flynt said. "Those people are actually in a competitive pool with the rest of the world."

Some of these jobs, such as call centers or a fulfillment center, "have to be very competitive globally to make that work from a business model standpoint," Flynt said.

"If you don’t keep wages in line with someone in Asia or South America or maybe India, then you end up moving it over there," Flynt said.

Jobs are out there

But with unemployment so low in the Asheville region — 3.6 percent for the Asheville metro in July, the lowest rate in the state — employers are having trouble finding enough employees.

The metro region, consisting of Buncombe, Haywood, Henderson, Madison and Transylvania counties, has 13,874 job openings and just 10,185 people classified as unemployed, according to EMSI, or Economic Modeling Specialists, a company that monitors online job postings.

Job openings are "across the board," said Nathan Ramsey, director of the Mountain Area Workforce Development Board, part of the Land of Sky Regional Council. "Every sector that I'm aware of."

That leads to some employers in the region really struggling to find talent.

Ramsey and his organization push education and training for workers to meet that demand, and he stresses that better-trained workers will make more money, boosting overall wages. Wages do lag here, Ramsey allowed, in part because of the types of jobs we have, but also because we have a preponderance of small businesses.

Additionally, even workers at the higher end of the pay scale make considerably less here than they do in other areas, Ramsey said.

He provided a chart, based on federal statistics, that shows the average wage in the mountains for the category "management of companies and enterprises" was $59,518 in 2015, compared to $105,613 statewide, a 44 percent difference. The category "finance and insurance" had average annual pay in the mountains of $64,549 — 28 percent lower than the statewide average of $89,182.

The only two categories in which WNC tops the statewide averages are in "health care and social assistance," where the average annual pay of $50,484 was 7 percent above the state average, and "accommodation and food services," where the average wage of $18,044 topped the state average by 12 percent.

Should businesses just pay more?

Jenna Wilson, owner of Patton Avenue Pet Co., which has three locations in Asheville, gets irritated with the lingering low wage situation in the region, in part because she feels a lot of it just comes down to greed. Wilson pays her 13 employees a "living wage," as certified by Just Economics WNC.

That organization has built "the largest voluntary Living Wage Certification Program in the country with over 400 employers" in our region, according to its website.

Without doubt, Wilson said, she could amass more wealth for herself if she paid her employees less, but she wants them to be happy in their jobs — and stay with the company. This year the Just Economics living wage is set at $13 an hour without employer-provided health insurance, or $11.50 with health insurance provided by the employer.

On a 40-hour work week, that comes out to $27,040 or $23,920 annually.

"I"m really proud that most of my employees have bought homes, that they're able to do that," Wilson said, adding that managers make $15-$20 an hour.

Wilson also firmly believes her employees are more invested in the business because of their pay.

"I find that being able to invest in good wages for my employees pays for itself in lower turnover, more dedicated employees, employees who genuinely care for and work hard for our business, and are excited to see us grow," Wilson said. "I feel that the increased wages I may pay versus other retail stores are easily covered by having a better staff."