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In Washington and Concord, two different debates about minimum wage

Last modified: 12/22/2013 10:40:37 PM
As Congress weighs proposals to raise the federal minimum wage, a different debate is playing out in New Hampshire: Whether to have a state minimum wage at all.

New Hampshire’s minimum wage law was repealed in 2011, making it one of just six states without such a law. That change was symbolic; the repealed minimum wage was $7.25 per hour, the same amount as the federal minimum wage. New Hampshire employers still must abide by the federal law.

But the debate will return to the State House next year.

Several bills aimed at re-establishing a minimum wage passed the House last year and were tabled or killed in the Senate. Democrats, who control the House, are ready to try again.

A new bill proposed in the House would re-establish the minimum wage at $8.25 per hour in fiscal year 2015, and raise it to $9 per hour the following year. Minimum wage would then be linked to cost-of-living increases, measured by the consumer price index.

“It is a moderate increase, and it’s one that is way overdue,” said Rep. Sally Kelly, a Chichester Democrat and the bill’s prime sponsor.

That bill is likely to face opposition again in the Republican-controlled Senate, where minimum wage legislation failed along party lines this year. Senate Majority Leader Jeb Bradley said some Senate Republicans felt that establishing a minimum wage equal to the federal amount was “kind of pointless.”

But Bradley said he also has concerns that raising the minimum wage could have a negative impact on job creation, particularly for first-time job seekers. That debate should play out at the federal level rather than on a state-by-state basis, he said.

“So I don’t think increasing the minimum wage is in the cards in 2014 in New Hampshire,” Bradley said.

In Washington, D.C., politicians are debating proposals to increase the federal minimum wage to as much as $10.10 per hour.

U.S. Reps. Annie Kuster and Carol Shea-Porter, both New Hampshire Democrats, are among many sponsors of legislation to incrementally increase the minimum wage to $10.10.

“There is considerable academic evidence that slight increases in the minimum wage boosts overall economic performance,” Shea-Porter said in a statement last week.

Sen. Jeanne Shaheen has joined a group of Senate Democrats calling for a minimum wage increase. In an email to supporters this month, she urged voters to sign a petition supporting minimum wage legislation that would “spur economic growth and lift millions of hard-working Americans out of poverty.”

Republican Sen. Kelly Ayotte has not shown support for a minimum wage increase. She said in a statement last week that she wants to encourage job creation rather than make it more difficult for employers to hire.

“As the Senate debates this issue, we need to make sure we’re not making it harder for younger workers to find jobs,” Ayotte said. “My first job was working as a bus girl at Mame’s Restaurant in Meredith, and I know how important it is for young people to be able to break into the labor force, gain work experience and begin to climb the career ladder.”

As the debate continues among politicians, economists are weighing the same issue.

New Hampshire is one of six states with no minimum wage. Alabama, Louisiana, Tennessee, South Carolina and Mississippi also have no minimum wage, according to the National Conference of State Legislatures. Its minimum wage is also the lowest in New England – the five other states all have laws requiring higher hourly rates.

“Classical economics will tell you that a minimum wage probably leads to higher unemployment and less people working than if there were no minimum wage,” said Dennis Delay, an economist for the New Hampshire Center for Public Policy. “Where that argument sort of falls apart in classical economics circles is if the minimum wage is already set at a level that’s maybe at or below what people are willing to work for and what employers are willing to pay. Then it’s not really going to have any detrimental effect on the economy.”

Delay said the $7.25 hourly minimum wage is low enough that it does not hurt the economy. If the first minimum wage law passed in 1979 were adjusted for inflation, Delay said it would be about $9 per hour today. Some economists do believe an hourly minimum wage of $9 or more would increase unemployment, he said, because employers would not hire as many workers at a higher rate.

“There’s a lot of arguments both for and against the minimum wage,” Delay said.

Whether those arguments play out in the state or federal government, advocacy groups on both sides are ready to speak out.

Bruce Berke, the New Hampshire state director of the National Federation of Independent Businesses, said he has heard from business owners who are concerned about the impact of minimum wage increases on their bottom lines.

“New Hampshire’s economy is built on small businesses, and it would just have a real devastating impact,” Berke said.

The New Hampshire AFL-CIO is pushing for a minimum wage increase, and earlier this month held a protest outside a McDonald’s restaurant in Manchester. President Mark MacKenzie said many adults with families are working for minimum wage – not just teenagers and first-time job seekers.

“There needs to be a floor under which people don’t slip, and the minimum wage has not been adjusted for a number of years,” MacKenzie said. . . . The reality is people can’t live on that ($7.25 per hour) minimum wage.”

Greg Moore, the state director of Americans for Prosperity, said “we all want to see wages go up.” But he said wages would increase on their own in a strong economy with low unemployment rates.

“We think the way to approach wage growth is by doing it in a more organic fashion by improving the economy,” Moore said.

Jeff McLynch, executive director of the liberal-leaning Fiscal Policy Institute, has the opposite approach.

Increasing the minimum wage “would also have benefits for the New Hampshire economy because you’re putting more money in people’s pockets,” he said.

If Congress raises the federal minimum wage, New Hampshire would have to comply. But the re-establishment of a minimum wage in New Hampshire has an uncertain future. State Rep. Timothy Horrigan, a Durham Democrat and one of the sponsors of the latest minimum wage legislation, acknowledged that the bill may again face opposition in the Senate.

“We figure if we don’t try it, we have no chance of winning at all,” he said.

(Laura McCrystal can be reached at 369-3312 or lmccrystal@cmonitor.com or on Twitter @lmccrystal.)


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