Over the past several months, five states – Connecticut, Delaware, Maryland, Minnesota, and West Virginia – have enacted legislation to increase their minimum wages. Delaware’s wage standard will soon begin climbing towards $8.25 per hour, West Virginia’s will grow to $8.75 per hour, and, for some Minnesota employers, the wage floor will be set at $9.50 per hour. In Connecticut and Maryland, the minimum wage will eventually reach $10.10 per hour. As a result, by 2016, half of the states and the District of Columbia will have minimum wages above the current federal standard of $7.25 per hour.
Those states that have – or will have – minimum wages in excess of the federal level tend to have something in common: a relatively high cost of living. As the following graph illustrates, research by the Missouri Economic Research and Information Center (MERIC) suggests that 18 states had costs of living above the national average in 2013. (Data from the US Bureau of Economic Analysis paint a similar picture, but are available only through 2012.) Of those 18 states, all but three – Hawaii, New Hampshire, and Pennsylvania – have or will soon have minimum wages over $7.25 per hour. Stated slightly differently, of the 25 states that will have minimum wages above the federal standard in the near future, 15 have costs of living that are above average.
As for New Hampshire, MERIC’s research indicates that its cost of living was close to 21 percent above the national average in 2013, driven principally by housing, utility, and health costs. The National Low-Income Housing Coalition’s recent Out of Reach report confirms how difficult it can be to meet some of these costs in the Granite State. It finds that New Hampshire was the 11th most expensive state in the country for renters in 2014.
Legislation now before the Senate would help to ease the difficulties low-wage workers face in making ends meet in this high-cost state. HB 1403 would raise the state’s minimum wage, in two steps, to $9.00 per hour and ensure that it keeps up with the cost of living in the future. New Hampshire policymakers should follow the lead of their counterparts in other states and raise the wage.