NELP Testimony In Support of a $15 Minimum Wage in New Hampshire

Introduction

Thank you, members of the Labor, Industrial and Rehabilitative Services Committee for the opportunity to testify today.  My name is Yannet Lathrop. I am a researcher and policy analyst for the National Employment Law Project (NELP).  NELP is a non-profit, non-partisan research and advocacy organization specializing in employment policy.  We are based in New York with offices across the country. Our staff are recognized as policy experts on a wide range of workforce issues, including the minimum wage.  We have worked with dozens of city councils, state legislatures and the U.S. Congress on measures to boost pay for low-wage workers and improve labor standards. We track both, the economic experience of state and local jurisdictions that have increased their wage floor, and the academic research on the minimum wage.  As a result, we have developed strong expertise on the analysis of minimum wage policy.

NELP testifies today in support of HB731, which would raise New Hampshire’s minimum wage to $15 by 2024. This policy would benefit an estimated 173,000 workers in the state. If New Hampshire approves a $15 minimum wage, the state would join a growing number of jurisdictions across the country that have enacted or are pushing for similar policies. Five states—New York, New Jersey, Massachusetts, Illinois and California—have already adopted statewide $15 minimum wage policies, and additional states—including Connecticut, Maryland and Hawaii—are currently considering similar legislation. In addition, more than two-dozen cities and counties from Washington, D.C. to Minneapolis to Flagstaff, Arizona have approved $15 minimum wage legislation of their own, or have campaigns underway.

The most rigorous modern research on the impact of higher minimum wages—including robust increases to $13 or more—shows that these policies boost worker earnings with little to no adverse impact on employment, and that the implementation of higher local wages has proven manageable for employers. The few analyses showing adverse effects—such as the University of Washington’s study of Seattle’s minimum wage increase—were shown to have serious flaws that compromised their findings. As a result, the authors of that study were forced to reverse their position on the minimum wage.

A robust minimum wage benefits not only low-wage workers, but also businesses and the economy as a whole. Higher minimum wages have raised pay for workers in the face of larger economic trends that have led to stagnant and falling wages across the bottom of our economy. They also have been shown to reduce economic hardship, lifting workers out of poverty, and improving other life outcomes. The increased consumer spending triggered by higher wages can have the effect of boosting demand for goods and services and keeping money circulating in the economy, creating a virtuous cycle that benefits workers, businesses and the economy. These positive benefits have led a growing number of business owners and economists to endorse a $15 minimum wage.

In what follows, I will expand many on these and other key points, and will summarize the economic evidence on the impact of the minimum wage.

The Need for a $15 Minimum Wage in New Hampshire

Workers throughout New Hampshire need to earn more than $15 per hour today, just to afford the basics; by 2024, they will need even more.

According to analysis by the Economic Policy Institute (EPI), an estimated 173,000 workers in New Hampshire (more than a quarter of the state’s workforce) would benefit from the adoption of a $15 by 2024 minimum wage.[i] The average worker who works year-round would receive an extra $3,070 in annual earnings.[ii]

Throughout New Hampshire, workers need to earn more than $15 per hour today just to afford the basics. By 2024, they will need even more.  Analysis of EPI’s Family Budget Calculator shows that even single workers in rural Coos County need more than $17 per hour today to make ends meet. By 2024, these workers will need to earn an hourly wage of $20 or more. In Coos County, single and married workers caring for at least one child need to earn significantly more. (See Appendix 1).

Housing expenses, alone, can quickly drain the budgets of low-income families. The benchmark for affordable housing is 30 percent of income.[iii] Yet, in New Hampshire, with housing costs climbing over the past five years[iv] while paychecks remain flat, nearly one in two families are forced to spend more than 30 percent of their total household budgets on rent alone.[v]

Today, in rural New Hampshire, rent for a modest one-bedroom apartment averages $829 per month,[vi] or 66 percent of pre-tax earnings from full-time work at the current state minimum wage. In Western Rockingham County, a one-bedroom apartment averages $1,094,[vii] or 87 percent of gross minimum wage full-time earnings. Rent for apartments with two or more bedrooms, which parents raising children would need, cost more and account for even larger percentages of gross monthly earnings. (See Appendix 2 for additional estimates by county or region, and apartment size).

Low wages have the greatest harm on women and people of color; but a $15 minimum wage in New Hampshire would benefit these workers the most.

Women and workers of color are overrepresented among New Hampshire’s low-wage workforce, and would therefore be most likely to benefit from a $15 minimum wage—as well as be most harmed by a refusal to raise the wage floor.

Analysis by the Economic Policy Institute shows that although women make up just 49 percent of the total workforce, they represent nearly 61 percent of workers who would benefit from a $15 minimum wage. Similarly, although workers of color make up just 9 percent of the workforce, they account for a greater share (13 percent) of benefiting workers.[viii] The benefits of a $15 minimum wage for women and workers of color become clearer when we look at each demographic and racial group separately:

  • A $15 minimum wage would benefit 32 percent of all women in New Hampshire, compared with just 20 percent of all men.[ix]
  • A $15 minimum wage would benefit 38 percent of all African Americans and Latinos, and 33 percent of workers of Asian or other racial or ethnic background in New Hampshire, compared with just 25 percent of all white workers in the state.[x]

Clearly, while a $15 minimum wage would significantly benefit workers of all genders and racial or ethnic categories, women and workers of color throughout New Hampshire would be most impacted.

The typical impacted worker is a woman over 20 years old, who likely works full-time, has some college experience and may be struggling to raise a young child.

As discussed above, women and workers of color are overrepresented among New Hampshire’s low-wage workforce, and would benefit most significantly for a higher wage floor. The list below restates this point, and provides additional information that characterizes the typical worker affected by a $15 minimum wage:

  • Gender: Almost two-thirds (61 percent) of benefiting workers are women, while men make up only 39 percent.[xi]
  • Race and ethnicity: Benefiting workers are overwhelmingly white (87 percent). Whoever, greater shares of workers of color are affected by a $15 minimum wage than are white workers (see section above). In addition, nearly half (48 percent) of all African American and Hispanic women would benefit.[xii]
  • Age: An overwhelming share (84 percent) are 20 or older, including 31 percent who are 40 or older. Teens comprise just 16 percent of benefiting workers.[xiii]
  • Hours: Nearly half (47 percent) work full-time, and an additional 34 percent work between 20 and 34 hours per week.[xiv]
  • Education: Almost half of all impacted workers have some level of post-secondary experience. Nearly 39 percent have some college education or have earned an Associate’s degree, and an additional 9 percent have a Bachelor’s degree or higher.[xv]
  • Family income: Fifty-one percent of impacted workers have low to modest family incomes of less than $50,000 per year.[xvi]
  • Family status: One-fifth (20 percent) of benefiting workers are single or married parents raising minor children.[xvii]
  • Family poverty: One-third (33 percent) of benefiting workers and their families live in or near poverty.[xviii]

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Endnotes

[i].          Economic Policy Institute, Economic Policy Institute Minimum Wage Simulation Model, [February 5, 2019], https://www.epi.org/files/uploads/EPI_15_by_2024_state_tables.pdf.

[ii].         See Appendix Table 5 of David Cooper, Raising the Federal Minimum Wage to $15 by 2024 Would Lift Pay for Nearly 40 Million Workers, Economic Policy Institute, February 5, 2019, https://www.epi.org/files/pdf/160909.pdf.

[iii].        Urban Institute and National Housing Conference, The Cost of Affordable Housing: Does it Pencil Out? July 2016, http://apps.urban.org/features/cost-of-affordable-housing/.

[iv].         New Hampshire Housing Finance Authority, 2018 New Hampshire Residential Rental Cost Survey, June 2018, https://www.nhhfa.org/assets/pdf/data-planning/RentSurvey_2018.pdf.

[v].          New Hampshire Fiscal Policy Institute, New Hampshire’s Numbers: 2017 Census Bureau Estimates for Income, Poverty, Housing Costs, and Health Coverage, September 13, 2018, http://nhfpi.org/research/state-economy/new-hampshires-numbers-2017-census-bureau-estimates-for-income-poverty-housing-costs-and-health-coverage.html.

[vi].         National Low Income Housing Coalition, Out of Reach 2018: New Hampshire, https://nlihc.org/oor/new-hampshire. Comparison to pre-tax monthly income assumes 2,080 hours of work per year.

[vii].        Ibid.

[viii].       Economic Policy Institute, op. cit.

[ix].         Ibid.

[x].          Ibid.

[xi].         Ibid.

[xii].        Ibid.

[xiii].       Ibid.

[xiv].       Ibid.

[xv].        Ibid.

[xvi].       Ibid.

[xvii].      Ibid.

[xviii].     Ibid. For the purpose of this testimony, we define near poverty as between 101 and 200 percent of the federal poverty line.

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