LACONIA — "For me personally it's a moral thing," said State Senator Andrew Hosmer (D-Laconia), who is among a group of senators championing legislation to reintroduce and increase the state minimum wage. "I believe it is a valid act of government to set a floor for wages."
Hosmer, accompanied by Jeff McLynch, executive director of the New Hampshire Fiscal Policy Institute, brought his campaign to the offices of The Daily Sun yesterday. Two days earlier a bill to set a minimum hourly wage of $8.25 in 2015 rising to $9 in 2016 and thereafter adjusted to the cost of living carried the New Hampshire House of Representatives, 173 to 118.
In 2011, the Legislature repealed its own wage standard and currently the state is subject the federal minimum wage of $7.25 an hour, which amounts to $15,080 a year or less than $300 a week. Tipped employees may be paid a wage equal to 45-percent of the minimum wage, or $3.27 an hour.
McLynch singled out two shortcomings of the current minimum wage. First, the erosion of its purchasing power has left those working for the minimum wage unable to purchase basic necessities. Since 1979, he said that adjusted for inflation the purchasing power of the minimum wage has shrunk by 23 percent, or more than $2 per hour. Second, the state's minimum wage is the lowest among the New England states, where Vermont at $8.73 per hour is the highest followed by Connecticut at $8.70, Massachusetts and Rhode Island at $8 and Maine at $7.50. Moreover, all the other five states will likely have minimum wages of $9 or more within the next few years.
"Minimum wage workers are constantly falling farther and farther behind," Hosmer said. "They can't make ends meet." Stressing that "our goal should be to enable people to get off public assistance through work," he said that "a reasonable minimum wage should be part of our strategy."
The increases proposed in the bill, McLynch estimated would directly and indirectly raise the earnings of some 76,000 workers, including tipped employees, representing 12 percent of the state's workforce. He said that 48,000 currently earning less than $9 per hour would benefit directly while the wages of another 28,000 earning between $9 and $11 would also rise, although not as much.
Of these 76,000 people, McLynch said about three-quarters are 20 years old or older, about 60-percent are women, a third are full-time employees and 10,000 are parents. "The minimum wage is not just a starting wage," he said.
"These people are not savers, Hosmer noted. "They're spenders." Raising the minimum wage, he continued, would increase spending, particularly in the retail sector and "prime the pump" to hasten the recovery of the economy. McLynch projects that a minimum wage of $9 per hour would increase aggregate earnings in New Hampshire by $64 million.
At the same time, Hosmer suggested an increase in the minimum wage would decrease dependence on public assistance. McLynch referred to one study that found that a 10 percent increase in the minimum wage could reduce enrollment in the food stamps program by as much as 3.2 percent and expenditures by 2 percent. Finally, Hosmer ventured that a higher minimum wage, comparable to those of neighboring states, could help to mitigate the rapid aging of the population by dissuading young people from leaving the state.
Hosmer described the bill before the Legislature as "a moderate approach," conceding that while a steeper increase may be warranted what he called "the political tolerances" could not be overlooked. Although the bill is opposed by the National Federation of Independent Businesses, representing small business, the New Hampshire Retail Merchants Association and the New Hampshire Business and Industry Association, Hosmer said that it enjoys the support of a "a strong and diverse coalition."