A newly released national study finds that while incomes may be growing for many New Hampshire residents, the vast majority of those gains are being realized by the wealthiest. In their second edition of The Increasingly Unequal States of America, researchers at the Economic Policy Institute use IRS data to examine trends in income growth among the top 1 percent of households and the bottom 99 percent for all 50 states and the District of Columbia between 1917 and 2012. Their most recent results confirm previous findings for every state and region in the United States: income growth has been skewed heavily to the most affluent.
The analysis estimates that the average income (inflation-adjusted) of the top 1 percent of New Hampshire taxpayers grew by 30.3 percent between 2009 and 2012, while the average real income of the bottom 99 percent increased by only 3.7 percent over that same time period. Put another way, the most affluent Granite Staters have received nearly 60 percent of the overall increase in New Hampshire income. Although the situation appears worst in several areas of the nation (the top 1 percent captured 100 percent or more of the overall income increase in 16 states), the latest evidence signals that the benefits of the economic recovery have not been widespread in New Hampshire.
Furthermore, the study notes that this lopsided income growth is not a new development, but rather the persistence of a longer term trend. It finds that, while the average income for the bottom 99 percent of New Hampshire residents grew nearly 38 percent in real terms between 1979 and 2007, the average income in the top 1 percent shot up by 216 percent. Consequently, the top 1 percent of Granite Staters captured over one-third of total income growth during this 38-year period.
Policymakers can take steps to close this gap and to strengthen the state’s economy. In particular, legislators could lift the state’s minimum wage, which has not been increased since 2009 and currently rests at $7.25 per hour. Since then, inflation (as measured by the Consumer Price Index) has risen by about 10 percent, meaning a loss of purchasing power for those receiving the minimum wage. In raising the minimum wage, the state of New Hampshire would boost the purchasing power of low-wage households, which in turn, would translate into greater demand at local businesses, as low-wage workers generally spend most of their disposable income to meet basic human needs.