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Editorial: N.H. moves toward a minimum wage increase, but Sununu veto looms

  • Target has said the minimum hourly wage for its workers would rise to $15 by 2020. (AP Photo/Lynne Sladky) Lynne Sladky

Published: 4/6/2019 10:10:47 PM
Modified: 4/6/2019 10:10:49 PM

The New Hampshire House and Senate have both approved legislation that would gradually raise the state’s minimum wage above the woefully inadequate federal standard of $7.25 per hour, which has not increased since 2009 even as prices have increased by about 17 percent. Assuming that the two chambers, both controlled by Democrats, work out the differences between their two bills, the legislation would advance to the desk of Gov. Chris Sununu, who, according to The Associated Press, has indicated that he does not support decoupling New Hampshire from the federal minimum wage. That presumably means a veto is in the offing.

We hope the governor will reconsider, because few things have a more positive effect on the lives of the working poor than a minimum wage that truly helps make ends meet. Other states and cities around the country have begun to recognize this. At least 10 big cities and seven states have enacted minimum wages in the $12 to $15 range, and dozens of smaller cities and counties have followed suit. The current minimum in Vermont is $10.78 an hour, and pending legislation seeks to raise it to $15 an hour by 2024.

In New Hampshire, the Senate version would raise the minimum wage to $10 an hour in 2020 and $11 or $12 an hour the following year, depending on what benefits employers provide. The House bill would set the minimum wage at $9.50 in 2020, $10.75 in 2021 and $12 in 2022. For context, even at $12 an hour, employees working a 40-hour week would gross just $480 a week, or $24,960 a year, while those working 60 hours would earn $720, or $37,440 a year. Readers who make, say, two or three times the minimum wage are invited to examine their own household budgets to see how far those wages would actually go.

Two objections are often offered to raising the minimum wage in New Hampshire. One is that virtually everyone is paid more than the minimum at present, so no reason exists to increase the legal minimum above the federal level. (A bill pending in Congress would raise the federal minimum wage to $15 over five years, but is unlikely to be enacted given Republican opposition.) If this assertion about New Hampshire employment is true, then raising the minimum wage should have little to no impact on employers.

The second objection was articulated by the state Senate’s Republican leader, Chuck Morse of Salem, who contended that states and cities that have raised their minimum wage have experienced a decline in jobs and a decrease in take-home pay for low-wage workers because of reduced hours of employment. Indeed, a 2017 University of Washington study of Seattle’s experience found just such an effect.

However, a number of other studies looking more broadly at the minimum wage picture have found little negative impact on employment and significant positive impact on earnings. Researchers at the University of California, Berkeley, last year analyzed the effects of a higher minimum wage on the food service industry in six early-adopting cities: Chicago, Washington, D.C., Oakland, San Francisco, San Jose and Seattle. Using two different models, they concluded that a 10 percent increase in the minimum wage boosts earnings between 1.3 and 2.5 percent, while the impact on jobs of such an increase ranged, on average, from an estimated 0.3 percent decrease to a 1.1 percent increase. Similarly, researchers at the University of Massachusetts at Amherst looked at the impact on all low-wage jobs of 100 state-level increases in the minimum wage since 1979. They concluded that low-wage workers saw a wage gain of 7 percent, but little change in employment.

It’s also worth noting that big private employers apparently are coming around to the view that a higher minimum benefits all, especially in an exceptionally tight labor market. Amazon, for example, announced last October that it would raise the minimum pay for all its United States employees to $15 an hour; Target has said its minimum wage would rise to $15 by 2020; and Costco has raised its minimum to $14 an hour. At the end of last month, McDonald’s, for many years a leading low-wage employer, announced that it would no longer lobby against minimum wage increases at the federal, state or local level. (To be fair, critics pointed out that more than 90 percent of its restaurants worldwide are owned and operated by independent franchisees, who presumably would bear the brunt of minimum wage increases.)

Compelling as they are, the economic arguments are not the only ones in favor of increasing the minimum wage. Matthew Desmond, a professor of sociology at Princeton, covered some of them in The New York Times Magazine in February. He noted that a number of studies around the country have focused on the public health effects associated with increased minimum wages, which include decreased rates of smoking and child neglect, increased utilization of health care, and decreases in low birth-weight babies and teen births. Given the continuing struggles that afflict New Hampshire’s child welfare agency, the associated decrease in child neglect should be of particular interest to state officials.

Something less tangible is also in play in raising the minimum wage. If there is dignity to be found in work — and we believe that there is — being compensated fairly is key to an employee’s self-respect. Many low-wage workers take just as much pride in their work as do people who earn 10 or 20 times the minimum. They deserve compensation that reflects the value of what they do.

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