The Hippo


Mar 19, 2018








Wage wars
The pros and cons of a minimum wage increase


 State lawmakers have a long history with minimum-wage law proposals, but Fergus Cullen, former GOP party chairman, said the issue “is mostly about politics and not mostly about economics or helping low-wage workers.” 

Rep. Sally Kelly (D-Chichester) says it shouldn’t be that way. She’s the primary sponsor of a new bill that would re-establish the minimum wage at $8.25 per hour in fiscal year 2015 and raise it to $9 per hour the following year. Then minimum wage would be linked to cost-of-living increases, measured by the consumer price index. New Hampshire’s minimum wage currently defaults to the federal $7.25 per hour rate.
“What I’m reading in the press, they try to make it a political issue and it really shouldn’t be,” Kelly said. “We have to always be concerned about labor. We have to balance the issue of both the workers and employers.”
Party disagreements may keep the media tuned in to the issue, but it will keep coming back to the legislation as long as state and federal minimum wages are dismally lower than the living wage. According to the Massachusetts Institute of Technology’s living wage calculations, the living wage for one adult and one child in the state is $21.29 an hour. 
“We don’t have a living wage in our country … so we are not even trying to get anywhere near that. We’re just taking a step,” Kelly said. 
Last time the state Legislature passed a minimum wage bill was 2008 (it raised minimum wage to $6.50 per hour), Kelly said. She was new to politics then and the bipartisanship was encouraging, she said. Since then, this issue has been anything but a legislative unifier. The state’s minimum wage of $7.25 an hour was repealed in 2011, which was a symbolic gesture, since the federal rate was the same. The Democratic House passed  proposals to re-establish a state minimum wage last year but they were tabled or killed by the Republican Senate. That made New Hampshire one of only six states without minimum wage legislation of its own.
Some New Hampshire Republicans argue that increased minimum wage harms the people it is purported to help. When minimum wage goes up, it can cause employers to cut positions so fewer people would be employed or shorten workers’ shifts so their paychecks do not increase.
“While it sounds good in principle … that you’re going to help people who need help, the fact of the matter is minimum wage costs jobs, in particular to younger-level employees,” said Republican Sen. Jeb Bradley. “With the ever-advancing reach of technology, it’s easier for employers to replace minimum wage workers with technology. One of the big restaurant chains has a tablet computer on people’s tables to minimize wait staff. This is what happens.”
Sen. Bradley attributed the problem to botch-ups at the federal level that led to the build-up and collapse of the national housing bubble, and suggested that an increased minimum wage might work only if there were a “starter wage” law, or a minimum wage for the first six months of employment, and then higher wage requirements after that time period. 
Democrats argue that the idea a higher minimum wage would create fewer jobs is a myth and claim that higher wages would mean more money spent on local goods and services, and a boost to the economy. 
Kelly said that last year the timing wasn’t right for an increase. The state was feeling stronger effects of the recession than it is now, and the proposed minimum wage increases would have been too expensive for businesses.  She also said that the new bill is much more manageable than past proposals because it raises minimum wage by only a marginal degree, slowly over two years. It also comes at a time when the economy is stronger, so businesses can afford it. 
As the legislators take on the issue from their end, organizations and researchers invested in the lives of minimum wage workers are calling for changes that make tangible improvements for people affected by the lawmakers’ decisions. 
“Even though [the increase] doesn’t seem like a lot, there is potential to make a big impact,” said Jessica Carson, vulnerable families research scientist at the Carsey Institute at the University of New Hampshire.
It could be a substantial boon to weekly earners, and would amount to a 10 percent or higher weekly increase in urban areas and up to a 15-percent increase in rural areas, she said. 
“The reality is many of the people who work at the fast food restaurants can’t even afford to eat there. We can do better,”  said Mark S. Mackenzie, president of AFL-CIO, a federation of labor organizations. “The median age of a low-wage worker is 34 years old. ... The fact is this is a group who is working, trying to support a family at $15,000 a year.”
Mackenzie, who supports the new bill, has been heading up efforts to get low-earning workers to stand up for themselves. In December he spearheaded a protest outside a Manchester McDonald’s as part of a national effort to raise minimum wage. 
“They can go to the street and talk about the problems with minimum wage,” he said. “More and more people around the country are taking to the street to say enough’s enough.” 
Opportunities to advance in the workplace are intrinsically linked to education and economics, Carson said. 
Nationally, more than 24 percent of affected workers have less than a completed high school education and 34.2 percent are high school graduates without any college education. More women, people of color and people living in rural areas also fall into this category of minimum wage workers, she said.
While Cullen said that the state’s anti-poverty safety nets like earned income tax credits, food stamps, Medicare and subsidized housing are more efficient ways to provide for this demographic than raising the minimum wage, Mackenzie suggested that the increase could mean fewer state funds would be needed for these programs. 
“There are some people who enjoy what they’re doing,” Mackenzie said. “While they may like the job, they can’t live on it. [Increased wages] could reward people who are good employees, who are trying to stay there and live on the wage.”   

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