Incomes for the top 1 percent of New Hampshire residents have grown much more rapidly than for the rest of the Granite State, both in recent years and over the past several decades, according to a new analysis released today by the Economic Policy Institute. Such findings underscore the need for New Hampshire policymakers to take action to help build an economy that works for everyone, now and in the future.
Titled The Increasingly Unequal States of America, the analysis estimates that the very richest 1 percent of Granite Staters garnered 83 percent of all income growth in New Hampshire between 2009 and 2011; that is, between the end of the Great Recession and the most recent year for which data are available. The average income for the top 1 percent of individuals and families in New Hampshire has grown 13.7 percent in real terms over the course of the recovery – to roughly $1,010,000. That rate of growth is well above that for the remaining 99 percent of Granite Staters. Those individuals and families saw their average income grow just 0.5 percent – to about $50,300 – over the same period.
The analysis further indicates that these latest figures represent an acceleration of a longer term trend in the unequal distribution of incomes in New Hampshire. Specifically, 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 for an individual or family in the top 1 percent shot up by 216 percent. Consequently, the share of all income received by the top 1 percent of Granite Staters climbed from 8.8 percent in 1979 to 18.0 percent in 2007.
New Hampshire policymakers can take steps to strengthen the state’s economy by helping to close this gap in incomes. In particular, policymakers could raise the state’s minimum wage, which has not been increased in five years and which has lost nearly a quarter of its real value since 1979. In doing so, they would boost the purchasing power of low-wage households, which would see the aggregate wages they receive climb by $64 million if the New Hampshire minimum wage were to climb to $9.00 per hour over the next two years. That greater purchasing power would, in turn, translate into greater demand at local businesses, as low wage workers by necessity spend every dollar they earn. At the same time, a higher minimum wage would likely lead to a more equal distribution of incomes in the Granite State, as research suggests that the erosion of the minimum wage’s real value has contributed significantly to inequality at the bottom of the wage ladder.