Time to raise the minimum wage

Full-time workers should be paid enough to feed and house their families without government assistance

March 24, 2005

By Jonathan Baird
Member, New Hampshire Child Advocacy Network steering committee

The Legislature is poised to take up again the issue of raising the state's minimum wage. House Bill 665, which has many sponsors, including Rep. Sandra Keans, Rep. Terie Norelli and Sen. Dick Green, proposes to raise the minimum wage from $5.15 an hour to $6.65 an hour over a three-year period. The bill proposes yearly 50-cent increases.

This will be the fourth attempt at the state level to raise the minimum wage over $5.15 an hour. It has been eight years since the last increase. Last year, the House speaker broke a tie vote to kill the bill. Before that, the House had passed an increase, but the bill died in the Senate.

The reasons to raise the minimum wage are both moral and practical. As an economic justice issue, it is fundamentally about fairness for low-wage workers. There is a core value in America that if you work hard, you should be treated fairly and you should have adequate resources to provide for your family. That means full-time workers should be paid enough to feed their families and put roofs over their heads without government assistance.

The current minimum wage fails to protect low-income families against hunger and homelessness. A wage of $5.15 an hour does not provide enough income to pay for basic necessities. Finding affordable housing in New Hampshire on that wage would be a miracle.

A minimum wage increase is not a guarantee against economic hardship. No doubt, families will still struggle. But an increase would provide more tangible help to pay for food, rent or medicine. Having a little more money might prevent an eviction, a utility shutoff or repossession of a car needed to get to work.

During the last eight years, while the minimum wage has stagnated, the cost of living has risen. Consider gas prices or rents. When the minimum wage does not keep pace with living costs, its value erodes.

The value of the minimum wage in 2005 is less than it has been in 46 out of the last 48 years. The minimum wage is worth only 33 percent of the average American wage, its lowest level since 1949. The minimum wage was instituted in 1938 and reached its peak value in 1968.

There has been one unrecognized cost in the erosion of value of the minimum wage. More people need to seek town, city or state government to survive because their wages have not kept up with the cost of living.
Welfare, food stamps and fuel assistance see more applicants. Government ends up subsidizing the businesses that pay bottom-of-the-barrel wages.

Polls and referendums find raising the minimum wage is overwhelmingly popular. In the last election, in two red states that voted for George Bush, voters approved ballot measures to raise the minimum wage by $1, to $6.15 an hour.

In Florida, over 70 percent of voters supported the increase. In Nevada, over 68 percent supported it. In these states, hardly liberal bastions, the minimum wage increase won in every county in both states. A new poll by the nonpartisan Pew Research Foundation found that 82 percent of Americans stated that raising the minimum wage was an important priority. Only 6 percent opposed an increase.

In New England, all our surrounding states have raised the minimum wage above $5.15. Vermont is at $7 an hour, Massachusetts $6.75 and Maine $6.35. The latter two states are considering additional increases. Rhode Island is at $6.75, and Connecticut leads at $7.10.

Having observed the debate over this issue over the years, I believe most opponents of the increase in New Hampshire do not think there should be any minimum wage. They see a wage floor as intrusive government regulation of the marketplace.

There has been no consistency in opponents' arguments. Arguments have included: not enough people would be affected; too many people would be affected; and small business would be hurt.

Having a minimum wage protects the value of work and the idea that work should be rewarded fairly. Without an hourly wage floor, employers could exploit the lack of bargaining power of low-wage workers. Nothing in the market would prevent a down spiral in worker pay scale. Pretty soon, some employers could be offering the equivalent of Third World wages.

Congress will not act on the issue. Even though Congress has given itself cost-of-living pay raises five years in a row, the U.S. Senate failed to step up when it recently defeated the minimum wage amendment to bankruptcy legislation.
A modest minimum wage increase like that presented by House Bill 665 makes good economic sense, and it is the right thing to do.

Jonathan Baird lives in Wilmot and works for New Hampshire Legal Assistance.