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Income gap not a focus for area businesses

Local industry leaders say boosting economy, jobs are keys to solution

POSTED: February 9, 2014 12:21 a.m.

The growing gap between the richest of the rich and the poorest of the poor has filled more space in national newspapers and airtime on political talk shows and sparked more studies among economists since the rapid rise and fall of the Occupy Wall Street movement in 2011.

President Barack Obama made the issue of income inequality a centerpiece of his State of the Union address last month, calling for an increase in the minimum wage and an extension of unemployment benefits to help narrow the nation’s wealth disparity.

But dispute remains among business leaders and worker advocates about whether income inequality is a real problem or simply capitalism at work. Moreover, there is debate about what can be done about it and whether government can provide the solution.

According to the U.S. Census Bureau, about 56 percent of the most populous 818 counties in the nation have less income inequality than Hall County. In Gainesville, about 28 percent of residents are living below the poverty level, compared to a statewide average of just 17.4 percent. The median household income is slightly above $40,000, while the statewide average is above $49,600.

Across Hall County, those figures fare better. The median income is more than $52,000, while less than 17 percent of residents are living below the poverty line. Areas such as Flowery Branch in the southern part of the county help make up the difference, evidenced by wealth pouring into planned communities like Sterling on the Lake.

The issue of income inequality appears not to have pervaded the local business community, however.

Kit Dunlap, president and CEO of the Greater Hall Chamber of Commerce, said businesses are more focused on dealing with the impact of the Affordable Care Act.

“We haven’t polled anybody,” but there has been no talk of the issue of income inequality in chamber meetings or conferences, Dunlap said.

While there has been debate about the merits of raising the minimum wage, its impact on income inequality would be minimal, Dunlap said, since most of the chamber’s members already pay well above the $7.25 rate set by the state and federal government.

Steven Strittmatter, owner of Horse & Hound Tack Shop, located in the downtown square, said the issue of income inequality just doesn’t register with small business owners.

“It’s not something that I deal with in my business,” he said. “I don’t think it affects the way I’m going to be making business decisions.”

Moreover, addressing the issue with a minimum wage hike would be a “job killer” for small businesses across Hall County, he said.

The growing gap between the haves and the have-nots, however, is evident in statistics revealing that income gains since the recession have funneled to the wealthiest of Americans, while middle- and low-income workers are playing catch up. Ninety-five percent of inflation-adjusted per family income trickled to the top 1 percent of earners between 2009 and 2012, while the remaining 99 percent of Americans saw their income grow less than 1 percent, according to U.S. income tax data and census figures.

Meanwhile, corporate profits have rebounded sharply since the recession, reaching a 50-year high in 2012, according to the U.S. Bureau of Economic Analysis. As a percentage of gross domestic product, corporate earnings stand at 9.7 percent. But personal wages and salaries haven’t fared as well. They sit at just 42.6 percent of gross domestic product, a 50-year low.

“We see corporate profits surge because they’ve eliminated waste, but we haven’t seen small-business profits surge,” said Frank Norton Jr., CEO and chairman of the Norton Agency, a Gainesville-based real estate firm. “Small businesses in North Georgia are still struggling.”

Norton said he believes that returning the country to full employment will allow businesses to reinvest their profits, will drive entrepreneurship and ultimately will help address the stagnation of personal wages for the middle class over the past two decades.

“I don’t think it’s an issue,” Norton said about income inequality. “I think it’s being played up as an issue.”

Whether government or the private sector can or will provide the kind of relief necessary to close the income gap remains a point of debate. But, perhaps, the answer lies somewhere in between.

“Government cannot create financial equality among people, but it can remove obstacles that allow significant income gaps to persist,” said Phillippa Lewis Moss, director of the Gainesville-Hall Community Service Center. “By partnering with the private sector, government can improve the playing field that allows for a greater number of people to thrive.”

One example, Moss said, is the CSC’s Volunteer Income Tax Assistance program, which helps low-income residents prepare their annual tax returns to ensure they receive the greatest possible return.

Though income inequality appears not to be a defining issue for many business leaders in Hall County, residents can expect it to become a topic for debate in this year’s U.S. congressional race for Georgia’s 9th District House seat between incumbent Republican Doug Collins and Democratic challenger David Vogel.

“I don’t think anybody is offering any solutions that come close to dealing with the problem (of income inequality),” Vogel told The Times last month, adding that the issue will be a focal point of his campaign.


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