Josiah Bartlett: "Does Anyone in New Hampshire Make the $7.25 an Hour Minimum Wage?" - Granite Grok

Josiah Bartlett: “Does Anyone in New Hampshire Make the $7.25 an Hour Minimum Wage?”

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Officially, New Hampshire’s minimum wage is $7.25 an hour. Finding someone who actually earns that, though, could be harder than finding a vegan in a Brazilian steakhouse on Flank Steak Friday. “You wont’ find it,” Mike Somers, president of the New Hampshire Restaurant and Lodging Association, said.

A person making $7.25 an hour in New Hampshire is “a bit of a unicorn,” Somers said. “Frankly, we haven’t seen it for years. I haven’t seen anybody paying less than 9.50 or 10 bucks an hour in years.”

New Hampshire is one of 19 states that ties its minimum wage to the federal minimum. Employees who earn tips or commissions can be paid less than $7.25 an hour. Tipped jobs are subject to a minimum wage of $3.27 an hour. But that’s not what people in those jobs actually earn.  When tips are included, restaurant servers in New Hampshire average more than $18 an hour, according to the Restaurant and Lodging Association.


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So when looking for people who are paid only the minimum wage, the search has to be limited to non-tipped positions.

Before the pandemic, non-tipped minimum-wage jobs already were unusual, if not rare, in New Hampshire. The post-pandemic labor shortage might have eliminated them.

It’s possible that some employer in New Hampshire is paying someone $7.25 an hour. But in interviews with business managers and trade associations around the state, we found no one who paid the federal minimum for non-tipped work — or who knew of any other business that paid it.

“I think it would be pretty hard to find anybody that’s paying minimum wage,” Donna Allen, manager of the Family Dollar store in Berlin, said. Her store pays $11.50 an hour to start, she said.

Kyle Daley, manager of Solomon’s store in West Stewartstown, said his store pays $9-$10 an hour to start for entry-level positions. Experienced tradespeople such as butchers make more. He didn’t know of any area employer that paid the minimum wage.

Paul McGonagle, manager of Grant’s Shop & Save in Glen, said the store typically pays inexperienced teens $10 an hour to start. Experienced employees start at $12 an hour.

“You’re not going to get any employees” at $7.25 an hour, he said. “You’re just not going to get them. And if the parent hears that you’re hiring their kid at $7.25 an hour, they’ll say don’t take it, go work somewhere else. Go to McDonald’s where they’re paying 11, 12 dollars an hour.”

Survey data compiled by New Hampshire Employment Security suggest that non-tipped minimum-wage jobs have been declining for years.

The agency does not have a database of every wage paid for every job. To estimate how many people make the minimum wage, it uses data from the U.S. Census Bureau’s Current Population Survey.

Because the survey consists of a very small sample, its estimates are not considered precisely accurate. Even if the numbers are off by hundreds, though, the surveys show a years-long decline in the number of people reporting that they earn the federal minimum wage in the state.

In 2016, Employment Security estimated based on CPS survey results that roughly 15,000 people in New Hampshire earned the minimum wage. In 2017, the number fell by nearly half, to 8,000. It fell to 1,200 in 2018 and bumped back up to 2,500 in 2019.

In 2020, the CPS survey estimated that only 235 people in New Hampshire earned the minimum wage.

The 2020 estimate is based on a single person reporting to have earned the minimum wage. And that person reported having a tipped job, according to Employment Security. It’s possible that several times as many people earn the minimum wage in a non-tipped position — or that no one does.

The 2020 number should be considered in the context of the pandemic-ravaged hospitality industry, where many lower-wage jobs are concentrated. Many of those jobs temporarily, or permanently, disappeared as restaurants, hotels, and tourism-related businesses closed or trimmed their workforces last year.

As the economy has recovered, the workforce has not. School closures, additional federal unemployment benefits, and a lingering fear of COVID have kept thousands out of the labor force. As a result, wages have risen unusually rapidly as employers have struggled to fill open positions.

“We put ads out months ago, and we’ve had two applications,” McGonagle said. “They’re just not coming to work because they’re being paid to sit home. And some of these people are making more sitting home than they’ve ever made before in their life.

“Those ads run all the time. I got signs in my windows. They’re just not coming in. Why would they come in if they get more money sitting home? You go by some people’s yards, you say, wow, their yard’s getting a lot of work. My yard’s not getting any work done.”

Asked where we could find anyone still paying the minimum wage, Nancy Kyle, president of the New Hampshire Retailers Association, said, “Good luck with that.”

“Retailers are having such a hard time getting help, they have to pay in some cases double the minimum wage,” she said.

The lowest wages paid in retail, Kyle said, are typically to disabled employees who need to have someone assist them on the job. But even in those cases, it’s unlikely employers are still paying the minimum in this job market, she said.

“Oh, no,” said Lauren Blessington, manager of O’Neil Cinema in Epping, when asked if she knew of anyone who paid $7.25 an hour.

O’Neil, a family-owned theater, pays inexperienced teenagers $8-10 an hour, the lowest starting wage we found. Experienced staff make more.

Blessington pointed out that the theater job comes with non-cash benefits that employees highly value: free movies, drinks and popcorn for the employee and a guest.

Though it’s possible that some Granite Staters are making $7.25 an hour in 2021, it’s clear that market forces have made non-tipped minimum-wage jobs extremely rare. Given recent wage growth, it’s likely that the $7.25-an-hour minimum wage job will soon be eliminated in New Hampshire if it hasn’t been already.

Drew Cline is the President of the Josiah Bartlett Center for Public Policy – Reposted with permission to read more please visit  JBartlett.org.

 

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