How Many In NH Could Benefit From Increased Minimum Wage

A quarter of workers in New Hampshire would see a noticeable pay bump if federal lawmakers pass the “Raise the Wage Act of 2019,” which would increase the minimum wage to $15 an hour, according to the Economic Policy Institute.

An interactive map, released Wednesday by the EPI, a liberal-leaning think tank, shows that just over 25 percent of workers in each of the state's two congressional districts would be affected by legislation raising the federal minimum wage to $15 an hour by 2024 for nearly 40 million workers.

The map also breaks down the share of workers in each district who would benefit by age, gender and race.

Here’s what would happen in the First District, which includes Bedford, Exeter, Hampton, North Hampton, Londonderry, Merrimack and Portsmouth:

• Total workers affected: 88,600
• Change in average annual earnings for year-round affected workers (2018 dollars): $2,700
• Change in average yearly earnings among affected year-round workers: 14.4 percent

Here’s what would happen in the Second District, which includes Concord, Nashua, Amherst, Milford, Salem and Windham:

• Total workers affected: 84,800
• Change in average annual earnings for year-round affected workers (2018 dollars): $2,600
• Change in average yearly earnings among affected year-round workers: 13.5 percent

David Cooper, senior economic analyst at the think tank, said in a release that the map gives shows a detailed picture of where congressional action can “help the most people.”

“Lawmakers have let the federal minimum wage erode to the point where today’s low-wage workers earn significantly less than their counterparts did 50 years ago,” he said.

The federal minimum wage was established in 1938 as part of the Fair Labor Standards Act. The goal of the legislation was to ensure that workers were fairly compensated and that regular employment would lead to a “decent quality of life,” according to the EPI. Congress thus periodically has to increase the wage so that workers in the lowest-paying jobs can still make ends meet and share in the rewards when the economy sees improved productivity, wages and quality of life.

But that hasn’t happened since the 1960s. While inflation has continued, the minimum wage has stagnated, leaving low-wage workers with less buying power. The federal minimum wage in 2018 was $7.25 — 14.8 percent less than when it was last raised in 2009, after adjusting for inflation, the EPI wrote. Even more distressing, it was 28.6 percent below its peak value in 1968. That means low-wage workers now have to work more hours just to attain the bare-minimum standard of living from a half-century ago.

“Since the 1960s, the United States has achieved tremendous improvements in labor productivity that could have allowed workers at all pay levels to enjoy a significantly improved quality of life,” the EPI wrote. “Instead, because of policymakers’ failure to preserve this basic labor standard, a parent who is the sole breadwinner for her family and who is earning the minimum wage today does not earn enough through full-time work to bring her family above the federal poverty line."

The rising wage floor would generate $118 billion in additional wages, said EPI economist Ben Zipperer. That would be shot in the arm that would benefit low-wage workers, their families and their communities, he added.

“Workers all across the country will soon need $15 in order achieve a modest but adequate standard of living for their families,” said Zipperer.

But raising the minimum wage all the way to $15 an hour might not be all sunshine and roses for America’s lowest earners. If that were the case, it likely would have happened already.

Most mainstream economists agree it would increase the average earnings for low-wage workers, But they also agree it would likely result in many workers losing their jobs.

What’s less clear is just how many would be lost.

If you listen to the Employment Policies Institute, a business group, up to 2 million jobs could be lost by passing the legislation. The Heritage Foundation, a right-leaning think tank, says increasing the minimum wage to $15 an hour could result in 7 million lost jobs. This is because employers would react strongly to higher labor costs, they say, and reduce employment.

“Such a large increase in starting wages would make it difficult for less skilled workers to find jobs,” wrote James Sherk, research fellow at the organization. “Employers will not pay workers more than the value they produce. Employers would respond by reducing employment of affected workers by approximately one-fifth, eliminating roughly seven million [full-time-equivalent] jobs.

Doomsday predictions of massive job losses are, however, challenged by other research, including a statistical analysis on the actual effect of the minimum wage on employment. That analysis, published in the Tuck School of Business at Dartmouth College, suggests the two aren’t as inextricably linked as many prominent economists and business groups would have you believe.

The working paper identified dozens of U.S. data analyses conducted since 2000 and found that the minimum wage’s impact on employment is muted. For one thing, teens aren’t working as much as they used to. Moreover, restaurants are much more popular than they used to be.

“Rather, over the last 15 years, the labor market has become much less important to the lives of teenagers and teenagers have become much less important to the functioning of the labor market,” the authors of the working paper said. “On the other hand, over the last 25 years, importance of Eating and Drinking Establishments to the labor market has grown, with their share of employment increasing by at least 25% (both for production and non-supervisory workers, and for all employees.”

In other words, the country’s labor market has drifted towards a workforce that is less responsive to minimum wage changes, the paper asserts.

The Economic Policy Institute, which published the interactive map, addressed concerns over job losses citing the above statistical analysis as well as other research that indicates narrowly focusing on possible employment effects is a “deeply flawed” method of evaluating the merits of a policy. What matters, they said, is how a worker’s total earnings are affected, not their work status.

There is a “high degree of churn” in the low-wage labor market and they cycle in and out of jobs frequently, the EPI said. So any reduction in hours would probably be spread across many low-wage workers. This means some will work fewer hours per week and some will see longer periods of unemployment, but they will all be earning more per hour than they would have otherwise.

“It’s entirely possible that few, if any, workers will actually see a reduction in their total annual take-home pay,” the EPI said.

Patch national staffer Dan Hampton contributed to this report.