Leaving Lower-Wage Workers Behind – Business NH Magazine

First Published in the Business NH Magazine, December 10, 2019

While gross state product, overall employment opportunities and the labor force have steadily grown, and unemployment has decreased, many workers are not better off than they were before the Great Recession.

In fact, there are notable disparities between different geographies of the state and income groups. Many residents may be struggling more now than before 2008.

The NH Fiscal Policy Institute’s recent analysis, “New Hampshire’s Workforce, Wages, and Economic Opportunity,” explores the condition of the labor market, particularly as it pertains to wages, job opportunities and expenses for workers.

The southeastern portion of the state, specifically the counties of Hillsborough, Rockingham, and Strafford, have been the growth drivers. The labor force and number of jobs have seen the largest increases there. While average wages have stayed relatively flat across all counties since the recession, these three counties still have some of the highest average weekly wages in the state.

Lower-Wage Jobs on the Rise

While the state saw a net increase in the number of jobs—27,519—between 2008 and 2018, not all industries saw such increases. Those sectors with the largest job growth had average weekly wages below the statewide private-sector 2018 average of $1,107 per week.

While lower-wage jobs have the largest increases in NH, jobs with wages higher than the state average have some of the largest declines in the past decade. While manufacturing, finance and insurance, and utilities boast some of the highest private-sector weekly wages in the state, there are also fewer of those jobs available.

Industries with greater job growth also have higher numbers of part-time employees and tend to be in health care and social assistance and accommodation and food services. As a result, jobs being added pay below-average wages.

Wage Increases for Higher Earners

This trend of rising lower-wage jobs has occurred in tandem with changes in who is seeing wage increases. Adjusting for inflation, average wages decreased for those earning at or below the median wage in NH between 2004 to 2016 and the tail-end of the recovery between 2016 and 2018.

Median wage is where half of the states’ workers make below this wage and half make above it. In 2018, the median wage was $20.95 per hour. Only those who made consistently more than the median income saw their wages increase to levels greater than they were making before the recession. Individuals who have consistently earned a median wage or less over this period have seen no real wage growth when adjusted for inflation and have actually experienced real wage decreases.

They essentially have less purchasing power than individuals earning at or below the median wage before the recession.

At the same time, expenses in NH, specifically for housing, have increased. In the past five years, rental costs in the state have jumped by nearly 22% on average for a two-bedroom apartment. What’s worse, apartments and single-family homes are in low supply in the state, further driving up costs.

In the decade since the recession, NH’s economy has improved by many measures, yet uneven wage growth, decreases in access to economic opportunity and increasing expenses have left many Granite State residents behind.

     – AnnMarie French, Executive Director