by Judy Elliott and Arnie Alpert
When the clock struck midnight on New Year’s Eve, the minimum wage went up in 10 states. But not New Hampshire, where the minimum wage is stuck at the federal level and the state’s minimum wage was abolished by the Legislature two years ago. Without change at the state level, thousands of New Hampshire workers will have to wait for the gridlocked Congress to raise the federal minimum wage above the current rate, $7.25 an hour.
What does it mean to live on $7.25 an hour? If you work 40 hours a week every week of the year, your annual income will be $15,080. Enough to live on? Not by a long shot. You’ll earn $4,000 less than the poverty-level income for a family of three. And even the poverty income is less than you need to keep a roof over your head. At the minimum wage, you’d have to work 106 hours a week to afford a typical two-bedroom New Hampshire apartment, according to the National Low Income Housing Coalition.
Help could be on the way.
Two bills coming before the House Labor Committee today would re-establish the state’s authority to set a minimum wage and raise it above the federal level. Rep. Tim Robertson of Keene is sponsoring House Bill 241 to establish a New Hampshire minimum wage of $9.25. HB127, co-sponsored by Reps. Peter Sullivan of Manchester and Timothy Horrigan of Durham, would set the minimum wage at $8 per hour.
In 1949 New Hampshire established a state minimum wage, though it seldom rose above the federal rate. But the state law was repealed in 2011. “There is no reason for New Hampshire to set ourselves higher than the national average and make ourselves less competitive for these workers who need to gain experience,” then-House Speaker Bill O’Brien said at the time.
But would employers really hire fewer workers if the wage went up? Research suggests otherwise. Recent research by a team of economists from the Universities of California, Massachusetts and North Carolina “suggest no detectable employment losses from the kind of minimum wage increases we have seen in the United States.”
Why? Wouldn’t higher wages make it harder for businesses employing low-wage workers to earn a profit? Not necessarily. Raising wage rates tends to reduce employee turnover, reduce the costs of recruiting and training, and raise productivity. As Henry Ford discovered a century ago, increasing wages can be profitable.
Some opponents say it is mainly teens who earn minimum wage. Not true. Many of New Hampshire’s lowest-wage workers have families to support. Although we lack state-level statistics, we know that teens comprise only a quarter of minimum wage workers nationally.
Who will benefit from an increase? While most New Hampshire workers earn more than $8 an hour, plenty of workers would see their incomes rise. The U.S. Bureau of Labor Statistics reports that 14,000 New Hampshire workers earn $7.25 per hour or less.
Raising the wage also will help thousands of workers now earning above $7.25 per hour. For example, a worker who currently earns $7.75 per hour will get a raise if the minimum wage goes up to $8.
Even people with somewhat higher wages will benefit. This is because many employers intentionally keep their pay a certain margin above the minimum in order to compete for employees.
HB 127 has an important additional feature, a process to raise the minimum wage as the cost of living increases. This is critical. The federal minimum wage would be $10.58 per hour now if it had kept up with inflation over the past 40 years.
Two more minimum wage bills – one in the House and one in the Senate – will come up soon.
Raising the minimum wage will not eliminate poverty in New Hampshire. But it will make a concrete difference in the lives of thousands of people struggling to earn a living. Every New England state except New Hampshire has a minimum wage above the federal level. Our workers deserve better pay for their hard work.
Judy Elliott is a workplace safety trainer with the NH Coalition for Occupational Safety and Health. Arnie Alpert is AFSC's NH Program Coordinator. This column first appeared in the Concord Monitor on January 29, 2013.