Children's Alliance testifies in support of $1 increase in NH minimum wage

Update: The NH Senate defeated HB 665 on a 15-9 vote

May 10, 2005

Senate Banks and Insurance Committee hearing
on House Bill 665

Testimony of Steve Varnum, Public Policy Director, Children's Alliance of New Hampshire

I am here to speak in support of House Bill 665, which provides what we believe is a modest $1 increase in the state minimum wage, phased in over the next two years.

Because poverty is a children's issue in New Hampshire, so is the need to raise our minimum wage. New Hampshire Census figures tell us that the percentage of children under age 18 who live in poverty has risen, from 6.2% in 2000 to 7.8% in 2003. That represents 23,700 children, 6,141 of whom are under age 5 and are among the most vulnerable children in the state.

Please keep in mind that these figures use the federal poverty guideline, which is a very, very low standard. In 2005 it is $16,090 for a family of three, $19,350 for a family of four. There are tens of thousands of children living in families not far above these figures -- in families we would call working poor.

Many parents earn close to the minimum wage. UNH business and economics professor Ross Gittell's research on full- and part-time workers earning at or near minimum wage found that working parents would be among the prime beneficiaries of raising the wage. He found that about 40 percent of full-time workers and more than half of part-time workers who earn the minimum wage or slightly more have children at home. His conclusion was that nearly half of those who would benefit from an increase in the minimum wage are working parents with children under age 18. More than 1 in 8 working single parents would benefit.

Low-income families live on a financial cliff. A rent increase or an illness can cost them their homes, and disrupt their children's physical and mental health, education and community connection. The poverty of working parents creates costs that the state will eventually pay.

A minimum wage increase will lessen the need for publicly funded safety net services. The farther behind the cost of living that the minimum wage is allowed to fall, the more minimum wage earners qualify for -- and rely upon -- public assistance. Even with full-time earnings of $6.15 an hour, a single parent with one child qualifies for Food Stamps; child care subsidies; the Women, Infants, & Children (WIC) nutrition program; the Commodity Supplemental Food Program (CSFP); heat and fuel assistance; the electric assistance program; free or reduced price school meals; and Healthy Kids Gold.

If you're wondering what that parent would need to earn to become ineligible for those programs, the answer is $9 an hour.

What message are we sending to children of minimum wage earners? Every public policy sends a message. In New Hampshire, and in America, a consistent message is that we expect people to work. Minimum wage workers are doing what we as a society tell them it's their responsibility to do.

But what message do we send children in these low-income working families when they see their parents go out every day to a job or a couple of jobs, and they still have to rely on food stamps, they still need to ask their local welfare office for help, they still go to the food pantry, they still hope and pray that fuel assistance comes through so their pipes don't freeze?

Much federal and state policy in my lifetime has been aimed at breaking the "cycle of poverty." If that's ever going to happen, children will have to see that work is valued and rewarded. In our society, value is expressed by price tags and paychecks.

Please recommend passage of this very modest increase in New Hampshire's minimum wage.

Learn about efforts to raise the federal minimum wage.