The mandated $15 minimum wage has changed the way companies conduct business. Here in New Hampshire HB 731 -FN proposes to include state workers. Let’s take a look at the implications to the public sector especially public schools.
In business, companies have replaced workers with kiosks and other self-service devices. But what will be the impact of the $15 minimum wage on public sector jobs?
No doubt, many deserving employees will get a raise. But how will it impact taxpayers in service delivery and cost?
Will municipal services like DMV evolve into kiosk-based service centers?
I can see it now, walk up to a kiosk, take your license photo, pay your fee, and walk away with your driving license.
Bring your car or boat registration to the DMV or town office, scan your QR code at one of several kiosks, pay with your debit or credit card and walk away with the official seal, registration certificates and license plates all dispensed from a vending machine.
Certainly fewer lines and faster service. Certainly, the potential exists for a reduction in staff. Maybe for applications like this, the $15 wage proposal will bring some worthwhile changes.
But even if there is a reduction in force, the baseline salary for every union and non-union position in state and municipal government is going to increase.
Let’s take a closer look at public education. Generally speaking, a school budget allocates 80% of its funds to labor costs, another 14% to mandated spending for special education and transportation. The remaining 6% pays for everything else including the lights, books, maintenance, athletics, utilities and part-time employees including substitute teachers. The values vary slightly by district but payroll and benefits are the largest cost.
So, what will be the impact of this on the school budget?.
Every district will need more money but some districts will need to come up with hundreds of thousands of dollars in pay increases.
Where is this money going to come from? Not cuts in the school budget. It’s going to have to come from taxpayers in the form of another tax increase.
And what about the other hourly employees – union and nonunion – in all 234 New Hampshire municipalities? What will be the financial impact? Inquiring minds want to know.
Unfortunately, the authors of the legislation made no attempt to figure out the possible cost. Instead, they punted. These quotes from the legislation, tell the story:
“For informational purposes, the Department of Administrative Services (DAS) states there are currently 224 full-time and part-time employees earning less than $12.00 per hour. However, DAS is unable to estimate the cost of this bill across state government as it cannot determine how many employees will be affected each year of the phase-in of higher minimum wages. Factors that impact how many positions would be impacted include, but are not limited to, employee progress through the steps of each labor grade based on years of service, employee turnover, and position vacancies.”
“The New Hampshire Municipal Association indicates this bill would increase municipal expenditures. The Association does not have sufficient information to determine how many employees would be affected or what the amount of increase would be.”
Maybe they could have asked the municipal governments they represent using our tax dollars.