NELP Statement on Override of Governor Lynch Veto of House Bill 133 on Minimum Wage

FROM THE NATIONAL EMPLOYMENT LAW PROJECT

For Immediate Release: June 22, 2011

Contact: Tim Bradley, 314-440-9936

NELP Statement on Override of Governor Lynch Veto of House Bill 133 on Minimum Wage

 Statement from Christine Owens, Executive Director, National Employment Law Project

 Today, the New Hampshire Legislature voted to override Governor Lynch’s veto of an unnecessary bill that eliminates language in New Hampshire’s minimum wage law allowing the state to enact a higher minimum wage than the federal floor.  The override is regrettable, on both policy and economic grounds.

While there will be no immediate effect on New Hampshire’s workers from this override because the current state and federal minimum wage are both $7.25 per hour, the vote speaks volumes about the priorities of this legislative session.  With countless crises facing working families in today’s bleak economy, this legislature chose to direct its energy instead toward passing needless legislation – twice -- that sends an unequivocal message that its proponents do not support the minimum wage. The minimum wage is a bedrock workplace standard, which the public broadly supports, that sets a modest floor beneath which wages cannot fall and helps stimulate the consumer spending that drives our economy.  Though the winners of this override may not be apparent, the losers certainly are. 

At $7.25 per hour, the current minimum wage is just $15,080 for a full-time worker.  Contrary to the repeated claims of minimum wage opponents, the vast majority of minimum wage earners are adults, many supporting families on this meager income.  With job growth in our nascent economic recovery concentrated in low-wage industries like home health care and retail that pay at or near minimum wages, families will be increasingly dependent on minimum and low-wage jobs.  Given the fact that minimum wage workers spend every penny they earn in their local businesses, a strong wage floor is also vital to stimulating the consumer spending necessary for real and lasting economic recovery.

House Bill 133 eliminates language that explicitly provided the flexibility legislators need to respond to local conditions with a higher wage rate than the federal standard.  For example, under the language now excised from New Hampshire law, the state minimum wage was $6.50 in 2008 when the federal minimum wage was $5.85, and $7.25 in late 2008 and 2009 before the federal minimum wage rose from $6.55 to $7.25.  The higher state minimum wage during those years was a result of simple state legislative action, taken in response to the economic conditions of the time.  While the elimination of this flexibility may not have an impact now, the legislature’s action is completely unnecessary and in future years, could impose needless additional hurdles to legislative action to increase the state’s minimum wage rate. 

With his veto, Governor Lynch rightly sought to preserve the important role of the state in redressing the failure of Congress to legislate in the minimum wage policy arena.  Indeed, when Congressional inaction kept the federal minimum wage stuck at $5.15 per hour for ten years between 1996-2007, nearly half the states in the country took matters into their own hands and raised their minimum wages above the federal level.

Those who overrode the Governor’s veto say that the minimum wage is “anti-business” and a job-killer.  These are talking points routinely trotted out by opponents of the minimum wage.  But up against real world experience – and rigorous economic research – they fall flat. 

For example, analyses of states with minimum wages higher than the federal floor between 1997 and 2007 showed that their job growth was actually stronger overall than in states that kept the lower federal level.   More recently, new economic research published in December 2010 and April 2011 provides the most rigorous and sophisticated analysis to date on the effects of increases in the minimum wage on job growth, and finds that even in times of high unemployment, the minimum wage does not cause job loss or slow economic growth.  These studies also demonstrate how research frequently relied on by business lobbyists to oppose minimum wage increases is inaccurate and misleading.  

Over the last 40 years, the real value of the minimum wage has eroded substantially, lagging far behind rising costs of living.  The role of states in addressing this critical problem cannot be overstated.  Eighteen states – including Maine, Massachusetts, Vermont, and Connecticut – currently have minimum wages above the current federal level of $7.25.   With prices rising and no federal increase on the horizon, there is little doubt that New Hampshire’s low-wage workers would welcome being among them.  

Instead, New Hampshire – once among the states that led the way – has now fallen behind.  Worse yet - with this veto override, the legislature has sent a clear signal to the state’s workers that it intends to stay there.

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For more information about the importance of a strong minimum wage, visit NELP’s minimum wage website at www.raisetheminimumwage.org.