With increase in Vt. and federal push from Biden, NH’s minimum wage in the spotlight

  • At the Lyme Country Store, Sky Schwarck, left, of Lyme, N.H. and Emma Dunnet, of Thetford, Vt., work at the store on Tuesday, Jan., 12, 2021, in Lyme. Both women work at the store fulltime. The business pays its employees above minimum wage. ( Valley News - Jennifer Hauck) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com. Valley News — Jennifer Hauck

  • Deomark Acob works by himself in a large greenhouse at Long Wind Farm on Tuesday, Jan. 12, 2021, in East Thetford, Vt. The tomato farm starts its employees above minimum wage. Acob has been working at the farm since 2012. ( Valley News - Jennifer Hauck) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com. Valley News — Jennifer Hauck

Valley News Business Writer
Published: 1/16/2021 9:44:15 PM
Modified: 1/16/2021 9:44:14 PM

WEST LEBANON — The minimum wage suddenly looks like it will receive maximum attention.

With the White House and both chambers of Congress all soon to be under control of Democrats for the first time in 10 years, increasing the federal minimum wage — which has been set at $7.25 per hour since 2009 — is likely to gain traction among lawmakers.

Indeed, President-elect Joe Biden on Tuesday tweeted, “It’s long past time to raise the minimum wage, so hardworking people earn at least $15 an hour. I hope that Democratic control of the House and Senate will ensure prompt action to get it done.”

Biden followed through on that plea Thursday, including a $15 federal minimum wage in his $1.9 trillion economic rescue package, along with an end to the tipped minimum wage and the sub-minimum wage for people with disabilities.

In the Twin States, the divide on minimum wage has long been as wide as the Connecticut River. Vermont on Jan. 1 increased its minimum wage by 79 cents to $11.75 per hour for non-tip workers, and the floor is set to rise again to $12.55 per hour in 2022. New Hampshire pegs its minimum wage to the federal minimum of $7.25 an hour — the lowest allowable wage in any state — which hasn’t increased since 2009.

In practice, especially in the Upper Valley, many employers say the legal minimum is far from the actual wages they pay. Some companies, such as employee-owned King Arthur Baking Co., already have a $15 minimum wage policy. But others, especially mom-and-pop businesses, can’t always reach that level.

J.J. Pippin, whose family owns the Lyme Country Store in Lyme, said they already pay their nine employees — including family members — at least $11 an hour. She has no choice, she said, if she hopes to find people to work at the store.

“We can’t hire people at minimum wage. It would be insane,” Pippin said.

False floor

Many small business owners, who shoulder the heaviest burden when payroll expenses rise, say that the minimum wage is largely an artificial floor because they need to pay more just to attract and hold onto workers.

This is especially the case in the Upper Valley, where unemployment is traditionally low compared to national unemployment.

Defenders of the status quo in New Hampshire argue that, although New Hampshire’s $7.25 minimum wage is the lowest in New England and among only 20 states in the country paying the federal rate, very few workers in the state actually earn the minimum level.

Only about 2,000 out of New Hampshire’s 395,000 hourly workers earn at or below $7.25, according to the U.S. Bureau of Labor Statistics. (BLS reports that 10,000 workers in the state earn less than $7.25, although they are likely to be workers in tipped jobs who are subject to a different minimum wage, according to Mike Polizzotti, a policy analyst with the New Hampshire Fiscal Policy Institute.)

Still, by most standards the federal minimum wage isn’t enough. The federal poverty line for a family of four is $26,200 annually, while a 40-hour week at $7.25 per hour tallies to $15,080 annually. A wage of $15 per hour totals $31,200 annually.

Political headwinds

In New Hampshire’s live-free-or-die tradition, the state’s Republicans have long resisted increasing the minimum wage, and Gov. Chris Sununu last year vetoed a bill that would have raised the state’s minimum wage to $12 over three years, including to $10 this year.

Nor does the governor appear likely to change his long-running opposition to a state-imposed increase in the minimum wage. Sununu spokesman Ben Vihstadt via email pointed to the governor’s past statements that any change in minimum wage “must be made at the federal level.”

Despite the long odds of the New Hampshire Legislature raising the minimum wage after both chambers swung back to Republicans in November, there are nonetheless two higher minimum wage bills before the House Committee on Labor, Industrial and Rehabilitative Services, said state Rep. Brian Sullivan, D-Grantham, who sits on the committee.

Sullivan acknowledged the political reality that neither bill is likely to get passed — assuming they even emerge from committee — but there are other motivations for lawmakers to introduce them.

“The bills are coming forward to keep the issue before the public. We — Democrats — believe the minimum wage should increase. But I don’t think we’re delusional the minimum wage will increase this year,” Sullivan said.

Instead, “the best chance to increase the minimum wage in New Hampshire over the next two years would be a change in the federal law,” Sullivan said.

But, Sullivan said, “make no mistake about it, $15 is not a livable wage. $15 is not something you can easily live on.”

Businesses above the minimum

Boloco owner John Pepper, who has long been vocal about the need to raise minimum wage to at least $15 — he said even $20 barely qualifies as a “livable wage” — sees the issue as less controversial now than during the last push to raise the federal minimum during the Obama administration’s second term — when the $7.25-an-hour wage was less than 7.25 years old.

“I think you’re going to see a real push for $15 over the next three years, just like you’re seeing in Massachusetts,” said Pepper, a Norwich resident whose restaurant chain is based in Boston.

Minimum wage in the Bay State is $13.50 — the second-highest in the nation behind Washington’s $13.69 — and is scheduled to increase in steps to $15 in 2023.

The minimum wage in New York City is $15 an hour, and $14 in Westchester County and Long Island, but for upstate New York it is $12.50.

At Boloco’s Hanover location, workers start at $13 an hour but “our average is just over $16,” Pepper said.

Even though the vast majority of employers pay above minimum wage, that is not the issue, according to Pepper.

“The problem is it sets a floor and makes somebody think it’s ‘OK’ to pay $11, when it’s not,” he said.

Pippin, of Lyme Country Store. also said she would support a higher minimum wage, even though it would increase the cost of the store’s payroll, although she doesn’t commit to a specific amount. Pippin said she is aware that any increase in the minimum would likely only lead to paying more since staying at the same level with other employers would make it hard to attract workers.

“When we get to that stage, we’ll just have to deal with it,” she said.

At West Lebanon Feed & Supply, employees — unless they are high school or college kids working seasonal shifts — start at $12, owner Curt Jacques said. But most of the store’s 30 employees earn more than that, he said.

As a brick-and-mortar retailer, however, Jacques said he struggles to remain competitive with online sellers such as Amazon and Chewy and that if he can’t match them on price he will lose sales. So, given that payroll is his largest expense, he is limited to how much he can raise prices so he doesn’t push customers to his online competitors.

But Jacques said the work environment and culture can sometimes go a long way toward attracting and retaining employees. For example, he spends $8,000 on employee health care with a sliding scale that covers more of an employee’s medical costs the longer they remain (70% in the case of one recently retired 30-year employee, he said).

Regardless, after years of the economy growing, the stock market soaring and, despite the setback dealt by the pandemic, expected to pick up again once the vaccine is widely administered, businesses would be wise to expect that the minimum wage will get its first raise after a decade of stagnation.

“It’s going to $15,” Boloco’s Pepper predicted about a national minimum wage. “And, honestly? I don’t even think I’m a contrarian on this stuff any longer.”

Contact John Lippman at jlippman@vnews.com.

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