GOSHEN -- The staff at The Electric Brew are taking home something not many workers in Elkhart County are getting: fatter paychecks.
While nursing the beans in large roaster, Myron Bontrager, owner of the downtown coffee house, downplayed the recent raise, calling it only "a token of appreciation" and noting his employees deserved it.
Token or not, wages have become a victim of the economic recession, with the supply of workers exceeding the demand of employers. In St. Joseph and Elkhart counties, average weekly income fell $40 from the first quarter of 2008 to the first quarter of 2009, according to a study by Grant Black, director of the Bureau of Business and Economic Research at Indiana University South Bend.
Along with depressing wages, recessions tend to decrease the price of goods and services. On average, however, income seems to be declining faster than prices, Black said. Being careful not ot overstate the possibilities, he explained this situation could magnify the downturn as consumers cut back and forego spending money at such places as hair salons, restaurants and coffee shops.
In September 2008, when Wall Street collapsed, Bontrager noticed a slight drop in the number of customers coming for a latté or baked good and those who did walk through the doors were buying less. Since then, patrons have become accustomed to the economy and adjusted their budgets, enabling the business to stay profitable.
"I think they've kind of found their stride again," he said.
Still, Bontrager has not hired replacements for departing employees and he reduced the number of workers on a shift.
"No use paying them a good wage if they have nothing to do," he said.
For local workers, the average loss of $40 a week balloons to more than $2,000 a year. And if wages do not rise with the uptick in available jobs, consumers will continue to refrain from spending and that, Black said, could slow the recovery.
And if inflation begins to grow and wages do not keep pace, paychecks will have less purchasing power and workers could fall further behind, Black said.
Most likely, Black said, consumers should expect their wages to rebound as the economy improves, although how long it will take for income to plump up and how fat paychecks will get remain unknown.
"It shouldn't be just interpreted as greedy business owners out to get their workers," Black said of the slumping earnings. "The business, just like a person, is trying to maintain the company and services. They're having to make adjustments when no revenues are coming in."
At Shutter Hugs, owner Lyman Hug diversified his framing business to attract customers into his Main Street store. When the photographer who shared the building left, Hug bought his equipment and now offers studio and portrait photography. And to capitalize on the crowds that fill the streets during Goshen's First Friday events, he began exhibiting the work of local artisans.
The economy has squeezed his bottom line as other businesses do not use his large-format printing service as often and individual customers consider the price more carefully. Hug will modify and swap materials to meet clients' budgets.
"I don't try to talk people into something I don't think they can afford," he said.
Since a piece of art or a frame for a picture are not something people need, Hug believes he is seeing the impact of shrinking income. If people were working full time and getting good compensation, he said, they would be spending money on discretionary items.
Black is not surprised that wages in the manufacturing sector have sunk 5.6 percent given the "massive drop" in demand for labor.
However, the reason behind the 36.3 percent decline in pay for the professional, scientific and technical services jobs is unclear. Perhaps, he hypothesized, those wages were inflated or with layoffs and an influx of college graduates, more of these workers are available.
Also, the 9 percent fall in management wages may be the result of business professionals accepting pay cuts in exchange for being allowed to keep their positions, Black said.
The economy has not prevented Clarissa DuBois from buying hot coffee from The Electric Brew. A server at a local restaurant and a freelance photographer, DuBois said the customer service -- in particular the staff greeting her by name -- keeps her indulging at the java house.
Despite the recession, she is not worried about her paycheck and she is confident she will always be able to find a job.
"If I'm not having fun somewhere, I'm out the door. Life's too short not to have love and happiness," DuBois said, advising if you do what you love, God will bless you and "you'll be able to buy a really good cup of coffee."