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Hall economy remains insulated from some market forces, experts say
Drop in wages nationwide not felt here
0820 Workers2
A help wanted sign is seen outside Club Corners Car Wash in Gainesville in August 2017. - photo by David Barnes

Wages for U.S. workers have fallen three straight quarters when adjusted for inflation, according to a new report from the Bureau of Labor Statistics

Median weekly earnings fell 0.6 percent in inflation-adjusted dollars compared to the same time period in 2017.

Rising consumer prices, meanwhile, pushed inflation up 2.9 percent over the last year, the highest yearly change since 2012. That could prompt higher interest rates from the Federal Reserve.

But Hall County’s broad tax base and diverse industry could help keep it insulated from some short-term, and perhaps long-term, shocks to the economy.

“When you see the national numbers, it’s just that,” said Tim Evans, vice president of economic development at the Greater Hall Chamber of Commerce.

The data reflects the country, from Detroit to Miami to California, Evans said, and Hall County, for example, weathered the Great Recession better than most communities.

“Our economy locally may be very different,” Evans said, adding that local unemployment is still trending down — 2.8 percent in May in Hall County — and wages are slightly up.

Evans said one ongoing concern is rising housing costs, particularly in home purchasing, but also the rental market. Housing is typically the largest expense most individuals and families have from month to month, Evans said.

The latest employment and wage data, however, may also suggest that increases in cost-of-living and discretionary spending are a sign of an expanding economy. 

For instance, low unemployment could drive the labor force participation rate higher, meaning individuals who have been out of work for so long they are not counted anymore in unemployment statistics are again looking for a job.

There is “lots of slack there,” said John Scott, an economics professor at the University of North Georgia in Dahlonega. “There’s lots of folks who could come in.”

Scott added that he expected to see wages continue to rise in the current tight labor market, despite inflation, as well as more investment from companies as a result of the federal tax cuts passed last year.

Research firm TrimTabs reports that public companies were spending nearly $437 billion in stock buybacks in the second quarter, which analysts say helps boost the value of the remaining shareholder stock.

While shareholders and executives benefit in the near term, Scott said that stock buybacks have the potential to free up capital for other uses, such as investments.

“It’s not going into a black hole somewhere,” he added. “There’s lots of companies that are (investing).”

Scott describes himself as a libertarian, and growing debt, some of which is spurred by the tax cuts, is “certainly my No. 1 issue.”

But he offers concern, too, about current trade policies, such as newly imposed tariffs, that could “become more of a drag unless the (Trump) administration relents.”

It’s not just goods and services that are impacted, but also manufacturing costs as other nations retaliate with their own tariffs on steel and aluminum, for example.

Scott said it can be very difficult to impose tariffs in a narrow, pointed way.

“You never know which targets you’re hitting,” he added.

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