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High Cost of Living States Adopting Higher Minimum Wages

USmap of US minimum wage ratesOver 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.

Cost of Living in New Hampshire Among the Highest in the NationAs 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Legislature Passes Budget, Now Heading to the Governor

22 Jun 2017

tree with coins

On June 22, both the New Hampshire House and the Senate passed HB 144, the primary budget bill, and HB 517, the budget trailer bill, as proposed by the Committee of Conference. These two bills allocate and direct funding for the next two State fiscal years (SFY), which begin on July 1, 2017 and end June 30, 2019. HB 144 authorizes and appropriates $11.855 billion for SFYs 2018-2019 for State agencies to use, although the Legislature assumes State agencies will lapse a certain percentage of their appropriations and spend less money overall. This lapse, however, is not included in the amount agencies are legally appropriated in HB 144.