Wages continue to increase with new buisnesses
Money. Money. Money. A major concern traditionally among students is finances – students want higher wages and more jobs.
The rumor for years has been the Logan City Council put a cap an wages to keep them low.
“That’s laughable. We are not trying to hold wages down. It has never been true, and it’s not true now,” Mayor Doug Thompson said. “What motivation would we have to keep wages down?”
The community is better off if wages are higher. People pay more taxes and buy more, Thompson said.
Historically, Cache Valley has had lower wages compared to state and national averages, said Nevin Limburg, director of the economic development department.
Although it is still below the average, the gap is closing, Limburg said.
Previously, the average per capita was 85 percent of the state average and 70 percent of the national average, but now the number has risen to about 90 percent of the state average and 80 percent of the national average.
The problem with low wages is due in a large degree to the high number of students in the community who need to work and are willing to accept lower wages, Thompson said.
“There’s so many of you. It’s all a matter of supply and demand,” Thompson said.
The main reason for the increase is the stable economy in Cache Valley, Limburg said. Compared to the rest of the state, this valley has the lowest unemployment rate at 2.7 percent.
Especially this last year, overall the state economy has been decreasing because of the slowdown in Internet companies, but here the increase has continued to expand because of the diversity, Limburg said.
“We’re our own market. We can capitalize on that and be more resilient during slow-downs,” Limburg said.
Every firm in Logan, except one, has expanded in the past three years, Limburg said.
The City Council has been aggressive on attracting and helping businesses expand who offer higher wages, Limburg said.
“We have a great team, a great leader [Mayor Thompson] and good support with the school [Utah State University],” Limburg said.
In the past three years, there have been 2,800 new jobs in Cache Valley, half of those in the industrial sector with wages over $45,000, Limburg said.
The estimated salary needed to purchase a home is $27,000, Limburg said, and that’s their target.
In the commercial and retail sector, wages have also been rising, he said. With Home Depot and Lowes paying higher wages, this will force other businesses to pay more.
“Too many firms have been paying tidily for too long,” Limburg said.
With expansions in the next five years, 279 new jobs with salaries averaging $60,000 will be created at Hyclone, Limburg said. An expansion in Gossner’s was fought for and won which will add 150 jobs in the next five years paying 125 percent over the average. And Scientific Technologies Inc. will team up with the USU engineering department to create jobs for 112 people with an average of $60,000 in the next five years.
An incentive program is offered to new firms and expanding firms if they meet a formula of criteria, Limburg said. Incentives include things like land deeds and infrastructure improvements such as curb and gutter and power lines.
“It’s important to maintain and bring in businesses with higher wages,” Thompson said.
These incentives are granted after the firms build and perform, which means they don’t cost taxpayers anything extra, Limburg said.
“It works very well. I’m proud of our city for being aggressive,” he said.
The clear objective is to keep more students in Cache Valley. There are many who would like to stay if they had the option, Limburg said.
“We know that is our greatest resource [students],” he said. “We want to create jobs students can stay for.”
There are repercussions to increasing wages, Thompson said.
Right now, many of the lower paying jobs aren’t getting filled, Thompson said. The council is trying to protect these businesses to keep them from going under.
“We’ve not just been doing willy nilly. We’ve tried to be very careful of who we bring in,” Thompson said.
Long term goals to help with wages are community focused, Thompson said. Fifty percent of citizens are in rental units, and it’s more stable if they live in homes.
“We want more people to earn home-buying salaries to help create a more stable community,” Thompson said.