Minimum Wage Increase

LFDA Editor

In Brief:

  • New Hampshire’s minimum wage is set to match the federal minimum, currently $7.25 per hour.
  • There are exceptions for tipped employees, some students and trainees, and workers in a handful of other occupations, who may be paid a lower rate.
  • Recent attempts to raise the minimum wage in New Hampshire have failed.
  • Pro: The current minimum is effectively lower in buying power than it was in the past and is not enough for a full-time worker to pay for basic expenses such as food, housing and healthcare.
  • Con: The minimum wage is intended for entry-level jobs. Raising it will force up other pay rates, increasing costs for businesses which could lead them to cut jobs or refrain from new hires.

Detailed Summary:

The minimum wage is the lowest hourly rate that employers can legally pay their employees.

Minimum wages can be set at the federal, state, or local level, and debates about raising or lowering them are often contentious because of different views as to how they will impact employment rates, tax revenues and economic growth.

Minimum wage in NH

New Hampshire state law currently requires the state minimum wage to be the same as the federal minimum wage. This means that in New Hampshire, the minimum wage is $7.25 per hour.

There are some exceptions:

  • Workers who get more than $30 per month in tips can be paid as low as $3.27 per hour.  (However, if a worker can show that their pay plus tips ads up to less than the minimum wage for the hours they worked, their employer must make up the difference.)
  • Workers with less than six months of experience in a job can be paid as low as $5.44 per hour, if their employer gets approval from the New Hampshire Department of Labor.
  • Workers who are also full-time high school or college students can be paid a lower minimum wage—or even no wages at all— if they’re being employed to gain professional experience and their school or employer gets permission from the state.
  • Disabled workers may be paid at less than minimum wage, but only as part of an approved work training program.
  • Certain professions are exempt from the minimum wage law: household and domestic labor, summer camp employees, newsboys, golf caddies, outside salesmen and some ski area employees. Children working for parents or grandparents are also exempt, as are spouses who work in support of their spouse’s business.

Overtime pay

All hourly employees in New Hampshire are entitled to overtime pay if they work more than 40 hours per week, at a rate of time and a half.

The only exception to this rule is for employees of some seasonal businesses.   

History of minimum wage in NH

New Hampshire passed its first minimum wage law in 1933.

Since then, the minimum wage here has equaled the federal minimum at some times, and exceeded it at others.

However, in 2011, a bill eliminated all references to the state minimum wage from New Hampshire’s state laws, leaving only language that states employees are to be paid at least the federal minimum.

Attempts since then to set a higher minimum wage in New Hampshire have all failed.

Federal minimum wage law

The federal minimum wage is set at $7.25 per hour. No state can enforce a minimum wage law lower than this rate.

However, federal law does allow for some exceptions, like those allowed under New Hampshire’s minimum wage laws for work training or for tipped employees.

Cities and towns

In other areas of the United States, towns and cities unhappy with low state minimum wages have set their own higher minimum hourly rates.

There is nothing in New Hampshire state law that clearly prohibits municipalities from setting a minimum wage of their own—but nothing in state law necessarily allows it, either. For example, regulating wages isn’t listed in state statues governing the sort of bylaws towns can set.

The matter hasn’t yet been put to the test in New Hampshire, as no town or city here has tried to set its own minimum wage.

Policies in other states

New Hampshire is one of 21 states that tie their minimum wage to the federal level. There are also five states with no minimum wage. In those states, the federal minimum also applies.

Several states have minimum wages set higher than the federal level, ranging from $7.50 in New Mexico to $12.50 in Washington, D.C.

Finally, there are two states, Wyoming and Georgia, where the state minimum wage is set lower than the federal minimum. This wage would only apply to workers exempted from the federal minimum, such as casual babysitters or newsboys.

Currently, New Hampshire is the only state in New England to use the federal minimum wage, with all other states in the region setting a higher rate.

Other areas of controversy

Indexing minimum wage increases
In eighteen states, increases in the minimum wage are tied to one or more indexes, such as the statewide median wage, the regional consumer price index, or other measures of inflation.

  • Supporters argue that indexing helps ensure that minimum wages continue to have the same buying power.
  • Opponents argue that automatic indexing could make wages get out of hand.

Full wages for tipped employees
Only eight states require tipped employees to be paid the same minimum wage as other workers. Some states set their own tipped employee minimum, while others use the federal minimum of $2.13 per hour.

  • Supporters of continuing to pay tipped employees a lower minimum wage argue that tips more than make up for the lower hourly rate, and that paying servers the same minimum would be unfair to non-tipped workers like kitchen staff.
  • Opponents argue that tipped workers are more likely to live in poverty, and that tipped workers rarely call out their employers when their tips and pay don’t add up to the regular minimum rate.

 Lower wages for students, young people and the disabled
In New Hampshire, students, young people and the disabled can be paid lower wages only as part of approved work training programs.

  • Supporters of continuing or expanding this policy argue that it encourages employers to give younger or less able workers a chance to gain experience.
  • Opponents argue the lower wages are a form of exploitation. 

Related Issues: 

Income Inequality
Jobs, Trades and Skills Training
Right-to-Work Law
Welfare Restrictions

PROS & CONS

"For" Position

By LFDA Editor

“New Hampshire should raise the minimum wage.”

  • A full time worker earning $7.25 per hour makes less than $300 per week. In New Hampshire that’s barely enough to cover housing, never mind other living expenses. (According to an MIT study, a single person in Concord needs to earn $23,590 per year before taxes in order to afford basic necessities such as food, rent, and healthcare. Working full time at $7.25 means an annual income of around $15,000.)
  • Minimum wage workers generally have to spend every dollar they earn, which means any increase in their wages goes straight into boosting the revenues of businesses in their communities, helping to support the economy.
  • New Hampshire’s minimum wage has actually lost purchasing power over the past several decades, making it a lower effective wage than before.
  • It’s not just young people or those just entering the workforce who are paid minimum wage. Three out of four minimum wage workers are over the age of 20.

The preceding points were made by the New Hampshire Fiscal Policy Institute in a March 2014 article, “Long Since Due: An Increase in New Hampshire’s Minimum Wage”. 

"Against" Position

By LFDA Editor

“New Hampshire should not increase its minimum wage.”

  • Raising the minimum wage will make it harder for businesses to create entry-level jobs for young and first-time workers. If New Hampshire wants to increase the demand for more hourly workers, making it more expensive to hire them is not the way to go about it.
  • Only 3.5% of workers in New Hampshire actually earn the minimum wage or less.  Over half of these are tipped employees who generally earn much more than $7.25 per hour.
  • Most minimum wage workers receive a raise within the first year they’re employed.
  • Forcing small retail or service companies, like those that dominate New Hampshire tourism industry, to pay the same high wages as big corporations could put them out of business.
  • Studies have shown that if minimum wages are raised, hours for some low earners will be cut or companies will reduce their payroll in order to even out their costs. That means fewer available jobs, particularly for new or low-skilled workers.
  • Raising the minimum wage will force increases in hourly wages all the way up the pay scale, increasing costs that will have to be made up through cutbacks elsewhere.

The preceding points were made by Bruce Berke, state director for the New Hampshire branch of the National Federal of Independent Business, in response to a 2014 effort to raise the minimum wage.

LEGISLATIVE HISTORY

Killed in the House

Raises the minimum wage to $9.50 in 2018 and $12 in 2019, with annual cost of living adjustments starting in 2020. The bill also establishes a training wage that is one dollar less than the minimum wage for the first three months of employment for someone sixteen or seventeen years-old.

Killed in the House

Repeals the state minimum wage law.

Killed in the Senate

Raises the minimum wage to $8.50 On September 1, 2017, $10 on March 1, 2018, and $12 on September 1, 2018.

Killed in the House

Gradually increases the minimum hourly rate for tipped employees to the full federal minimum wage by 2020.

Killed in the House

Raises the minimum wage to $8.25 in 2017, $9 in 2018, and $9.50 in 2019.

Killed in the Senate

Raises the minimum wage to $12 per hour.

Tabled in the Senate

Prohibits employers from employing individuals with disabilities at an hourly rate lower than the federal minimum wage except for practical experience or training programs.

Signed by Governor

Prohibits employers from employing individuals with disabilities at an hourly rate lower than the federal minimum wage except for practical experience or training programs and family businesses.

Killed in the House

Raises the minimum wage to $9.10 in 2016, $11.40 in 2017, and $14.25 in 2018. Starting in 2019, the minimum wage is adjusted according to cost of living.

Killed in the Senate

Raises the minimum wage to $8.25 in 2016, $9.00 in 2017, and $10.00 in 2018.

Killed in the House

Raises the minimum wage to $16 per hour.

Killed in the House

Enables counties and municipalities to establish minimum wage rates for all individuals employed within such county or town.

Killed in the House

Establishes a state minimum hourly wage to be adjusted by the cost of living index, starting at $8.25 in 2016.

Signed by Governor

Creates a committee to study ending the payment of sub-minimum wages to persons with disabilities.

Killed in the Senate

Raises the minimum wage, starting at $9 per hour.

Killed in the Senate

Sets the state minimum wage at $7.25, in place of federal minimum wage.

Veto Overridden

Ties the New Hampshire minimum wage to the federal minimum wage.

Should NH raise the minimum wage?

FOR
REPRESENTATIVES

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AGAINST
REPRESENTATIVES

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Comments

BrianDunn's picture
Brian Dunn
- Henniker

Sun, 04/27/2014 - 10:28pm

Though raising the minimum wage sounds nice and is something I think every working class individual would vote in favor of, the raising of the minimum wage is a selfish personal desire and would not positively effect society as much as it would appear. By raising the minimum wage we must realize that unemployment would increase. Though everyone would like to make more money, you have to realize how this action would affect the people giving money to the working class. Raising the minimum wage increases the cost of running a business. Business and employers would now have to lay off a certain number of employees to maintain the same level of net profit they did before the legislation. Raising the minimum wage will also price people out of the workforce. The reason many people do not make more than minimum wage today is because they do not have the skill set, education or training to justify a higher salary. If the work force is cut and you are one of the previous minimum wage workers to get laid off, it is going to be exponentially harder for you to now find a job. With more unemployment and higher wages comes more competition for any new available positions. If you already did not have the skills, education and training before this legislation you run the risk of being priced out of the market entirely after the legislation.

 

Raising the minimum wage further hurts businesses by increasing taxes upon that business. Some businesses are taxed according to their payroll. The more workers you have and the more you pay them, the higher the taxes you must pay.  For example we look at Medicaid and Social Security. Both the employee and employer pay the same amount in taxes. If the minimum wage is increased from 7.25 to 10.00, the employer is now paying 6.2% in taxes on 10$ than they were at 7.25$. So not only is the business now paying more money to each employee, but they are paying more tax revenue to the government at the same time. It is an expensive double whammy. Businesses and corporations already operate under some of the highest tax burdens. In a time of recession and in a time where entrepreneurship and small business ownership are not on the rise, we can not continue to hamper peoples aspirations to be in business. In fact it is the duty of the government to do the exact opposite of this.

 

Australia has a minimum wage much higher than here in the United States, and when you hear the number you say to yourself, wow that sounds amazing I should live there. It is not until you dig a little deeper into the society that you see the downfalls of such a high minimum wage. Because employers and vendors are forced to pay such high wages the cost of the products and services you buy there are driven up. The minimum wage may be 15.00$ compared to 7.25$ here, but to go into a store and buy a bag of Doritos that would cost 2$ here costs 4.50$ there. It is not as simple as raise the minimum wage and people will have more money for a better life. All the money being spent buy the businesses to cover the new minimum wage has to come from somewhere. This comes in the cost of good and services to customers and a decrease in the total workforce.

Ananta Gopalan
- Hampton

Sat, 12/14/2013 - 8:46pm

In a recent op-ed in the Union Leader, Mr. Mark MacKenzie is arguing for increasing the minimum wage through political process from $7.25 to $10.10. There was another op-ed from a business group claiming that raising the minimum wage would hurt the very people it was supposed to help because employers would hire less.  Mr. MacKenzie  claims that such  thinking was outdated because it was not just teenagers flipping hamburgers that are involved anymore.

How did we as a nation get to the point of adults employed full time flipping hamburgers or equivalent full time jobs as their careers?  It used to be that people acquired skills and moved on.  According to Mr. MacKenzie that is not the case anymore.  What he is saying is that our economy and our inability to create high-paying jobs are creating conditions of hopelessness to a significant portions of our population.  That indeed is a sad day for America.  I remember the time not that long ago, you worked hard starting at low-paying jobs, went to school, got marketable skills (such as welding, mechanics of all types, machinists, tool and die makers etc.etc) and moved into middle class.  You saved money, bought a house, established a family of your own, worked even harder and saw to it that your children got better education than you did in the hope that they would be better off than you were.  Mr. Mackenzie tells us that is not the case any more.  But, he doesn't tell us why that is not the case anymore.

We are now a nation consumed with jealousy wanting to tear down those that became successful because politicians and the labor unions along with the academia have been drilling into our youth that they are being exploited by the rich and that they are owed a living by the government taking from the rich and redistributing to the have-nots.  Every day you hear from the president on down that the rich doesn't pay their fair share and that the country is unfair as founded. 

Mr. MacKenzie does not say that our policies (mostly socialistic, replacing market-capitalism) have degenerated our economy to the point that it can not provide meaningful employment with rising standard of living.  Unions have forced the capital to flee abroad taking all the high-paying jobs with it.  Government regulations through environmental extremism have choked off any growth in any high-tech jobs.  It has gotten to the point where we have to have Chinese welders and companies build the Bay bridge in Oakland.  We have essentially shut down our own energy resources believing in the man-made hoax called global warming.  We are highly educated but extremely stupid in believing snake-oil science.  Or, how about propping up the so called renewable energy of wind and solar by the billions of tax payer dollars that will never succeed because there is such a thing called the Second Law of Thermodynamics?  How about the hysteria about bringing oil from Canada through pipes? We have been doing it for decades without any problem.  How about the Obamacare taxing the medical device manufacturers so that they can be killed off,one of the industries in which we lead the world?  How about the union rejection of Boeing offer in Washington state recently to stay in Seattle but expecting concessions?  Boeing will probably move the production of the new 777X to some other place including overseas, such as Japan and China.  How many jobs are lost for the future workers of America.  Mr. MacKenzie, your statement that we have more people working at full time jobs at the minimum wage levels is an indictment of the socialist policies of the Progressives aided and abetted by your organization.  Market capitalism is the only means by which mobility in the economic ladder and the potential to constantly improve one's standard of living and lifting people from settling on minimum wage jobs as their careers can be assured.

Mr. MacKenzie doesn't say, why his organization is supporting legalizing illegal immigrants who are mostly low-skilled and will compete for the same minimum wage jobs?  He must be fighting for enormous growth in low-skilled, low-paying jobs because the majority high-paying jobs are going abroad in spite of government regulations enacted by legislators supported by the unions trying to prevent them.

Mr. MacKenzie, wage must be determined based on economic worth of the job and not through political power.  Soviet Union paid everyone the same regardless of the job content and economic worth.  We know what happened there.  It will repeat itself here if we try to do the same.  Think about it this way.  If I want to have my lawn mowed, I hire some one to do it and the government says that I must pay $10 an hour, I will probably try do it myself not hiring anyone or have the lawn mowed less often.  It is human nature all over the world regardless of the political system.  This idea of government declaring what the minimum wage will be will definitely reduce employment or result in more under employment.  People have limited resources to conduct business and forced wages would require adjustment or they will go out of business.

If $10 per hour is good for those people why not make it $20 an hour?  Wouldn't that help the economy even more?  I guess when we are printing money to cover expenses we can certainly afford it, right? Hamburgers will cost $15 and that means we would have to increase the minimum wage to $25 hour.  At one time in Germany, they had to wheel in to the grocery store wheel barrow full of Marks to buy bread.  Based on the current logic, they must have been affluent.

If you are concerned about the people stuck in low paying jobs, we must fight to expand the economic pie, increase opportunities, remove artificial government-imposed obstacles from private enterprises, encourage obtaining needed skills (not a degree in medieval art or some such useless subjects for making a livelihood) and most of all get rid of the entitlement mentality.  You should be allowed to keep what you make through your own effort, however small or large that may be without demonizing those that make more than you do.  The only system that can make that happen is the free market capitalism and not socialism which is only good in redistributing poverty.

Amanda Cram
- Loudon

Mon, 01/28/2013 - 8:21pm

Why do I say no to these bills? Is it because I'm a business owner or a wealthy citizen? The answer is, no. I'm neither. I'm a stay-at-home mom managing a household on the lower end of the middle class tier. So why would I say no?

This is a basic economics question. Have you heard of trickle-down economics? Same theory! Let's say you're a manager at a store. The stock person makes $7.25 an hour. New Hampshire raises their minimum wage to $8 or $9.25 an hour.

Let's say the next person above them is currently making $9.25. They have worked there longer and don't like that the person below them is now making the same wage. They then ask their boss for a raise stating their case and are now making $11.25 an hour. This goes on all the way up the chain to the store manager or further. The store is now losing A LOT of money! What is the store going to do?

Raise prices on their goods! So now, not only will that stock person who said they couldn't live on minimum wage have to pay higher prices on goods and services, but everyone else does as well. Do you get where I'm going with this?

Raising the minimum wage causes inflation, which then increases the cost of living, which then requires raising the minimum wage again. It is a vicious cycle with untold consequences, yet we keep going on this merry-go-round.

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