"Real liberty is neither found in despotism or the extremes of democracy, but in moderate governments.
Alexander Hamilton

Monday, February 22, 2016

Making Ends Meet in NH

(The following was in this past Sunday's  Concord Monitor. Startling to me is that low wage workers have seen a 5% percent decrease in wages adjusted for inflation since 1979, while cost of living has increased to the extent that low wage workers cannot afford to live here. Politicians spend a lot of time addressing many different social issues, but most do little to help working families. They are popular among some voters, so they get the most attention. What though do we do about a vital part of  our workforce  who can't even afford to live modestly? It's easy to say that they should go to school or learn a new trade, but when they work multiple jobs and have kids to raise, it is not an easy task. What mechanisms do we have available, or should make available,  so that low wage workers can have the opportunity to improve their lives? This goes way beyond raising the minimum wage. Many companies pay wages that are higher than minimum wage, but well below a living wage. The minimum wage bar is set very low after all.
What is happening in Concord to address this? Investing in our workforce is not a terrible idea and should be an issue able to cross party lines, but sadly it probably will not.)

For a single parent of one child to live modestly in the Concord area while working one full-time job, he or she needs to be paid about $26 an hour. On the New Hampshire Seacoast, it’s $30 an hour.

Those figures were surprisingly high, even for David Cooper, an analyst for the Washington, D.C.-based Economic Policy Institute, which created the Family Budget Calculator that derived the estimates.
Cooper was among a group of analysts who spoke at a conference called Making Ends Meet, attended by more than a dozen state legislators Friday.
In comparison with the rest of the country, the cost of living in Concord is similar to the Chicago metro area, Cooper said, and the Seacoast is similar to the metro areas of Philadelphia and New York City.
Especially in light of the $7.25 minimum wage here, the analysts at the conference painted a bleak picture for the lowest-paid Granite Staters, whose income they said has effectively stagnated or fallen for decades. New Hampshire has the lowest poverty rate in the country, but for the relative few who are just scraping by, housing and transportation costs make life even harder.
Cooper said the federal poverty line is “woefully inadequate” to describe what it costs to get by, and the EPI’s calculator uses localized costs to estimate life on the “bottom rung of the middle class,” including a rented apartment, one car per family and minimal food and health insurance costs, with nothing left for savings.
“Even though New Hampshire, in a lot of ways, is better off than a lot of other states, it takes a lot more to have that modest but adequate standard of living here,” said Cooper, a Hampton native.

Compared with the median-cost city of Des Moines, Iowa, the Concord area is 13 percent more expensive and the Seacoast is 30 percent more expensive. Housing on the Seacoast is 85 percent higher, health care is 30 percent higher and other necessities – such as household supplies and internet service – are 43 percent higher.

“This was actually shocking to me when I was putting together the slides,” Cooper said.

A relatively high and rising cost of living becomes a problem when workers’ salaries aren’t increasing to match productivity, Cooper said. Sometime in the 1970s, hourly compensation nationwide “flatlined,” after keeping pace with productivity for decades.

Since 1979, the typical American worker’s wages have grown by 6 percent, adjusted for inflation, while the lowest-paid workers have seen their wages fall by about 5 percent, Cooper said.

“This is part of the challenge we’re facing now. This is why folks at my organization and other organizations in Washington would say the problem with stagnating wages is really the key economic challenge facing the United States today,” he said. “It underlies all of our other challenges.”

Local to New Hampshire, the average worker has done far better than the rest of the country, with a 22 percent increase since 1979, but the lowest-paid workers’ wages are “basically the same.”

“So what that means is that for the last 45-plus years, even though our ability to generate goods and services per hour has gone up by about 70 percent, the person in the lowest-paid job today has the exact same material standard of living as somebody a generation ago,” he said.

Even before the recession hit in 2007, wages were effectively falling, Cooper said. Local poverty rates that increased during the recession have struggled to recover.

For the people who advocate raising the minimum wage in an effort to combat this trend, a Washington Center for Equitable Growth economist at the conference said most evidence suggests such a policy wouldn’t significantly affect employment.

Ben Zipperer, a research economist, said most studies have shown there’s no trade-off between employment and raising wages, and an increased minimum wage has a “spillover effect” for employees who make more than the minimum wage.

In New Hampshire, the difference between the median wage and the minimum wage is much higher than in other states, which means the policy has a very weak effect on the rest of the economy. But it wasn’t always that way, Zipperer said.

“In 1979, the bite in the minimum wage was very strong in New Hampshire . . . much higher than most states,” he said. “The lesson from this is New Hampshire, more than many states, has a lot of scope to actually raise its minimum wage. The labor market in New Hampshire . . . can handle a higher wage more easily than a lot of other states."


Joseph Cormier said...

Reminds me of going to the supermarket to food shop, and look at the prices and the "repackaging" (usually smaller for the same price), and have the gov't declare there is no inflation. Tell that to the buyer of a loaf of bread that costs close to $3 dollars.

Chicken wings .. can remember they were just about thrown away, so inexpensive. Now ... sell your first-born.

No inflation ... because the gov't changed the definition, and how it's monitored.

A little strange though, that 1979 (not "1984") is used in the article. That's what, 37 years, younger than the analyst, I think! What the hell have folks been doing for 37 years?

That's a lot of different politicians and ideals!


From LinkedIn:

David Cooper:


Specialties: Policy research and analysis, econometric and statistical analysis.

Policy expertise in: Wages and living standards, poverty, labor markets, federal budget policy, and social mobility.

Proficient in SAS, STATA, C++, Javascript, HTML, Adobe Design Software and Microsoft Office; Language proficiency in Spanish and Russian

Political Consultant, Campaign Manager
Professional Fire Fighters of New Hampshire
September 2008 – July 2009 (11 months)

Maybe he can run for the MoBo BOS!

Moultonboro Blogger said...

Walmart just increased their minimum wage this past Saturday: "The company will boost its minimum wage to $10 an hour from $9. But it's not just minimum wage workers who are getting raises. The change applies to virtually all of its hourly workers, including some supervisors, which make up the majority of the company's 1.4 million U.S. workers.

The wage hike will boost a full-time worker's average hourly wage by 3% to $13.38. Part-timers will get an an average hourly wage of $10.58, up 6%."

Joseph Cormier said...

I'm sitting here at Dunkies in MoBo waiting for a call from the wife up the street, where she is getting a hair cut, then off to Concord.

I'm leery of too many wolf avatars on the left of this blog, but what the heck ...

Same press release as blogger's:

"The changes do not come cheap -- they will cost the company an additional $1.5 billion this year, on top of the $1.2 billion that last year's wage hikes. "

"Making Change at Walmart," a union-backed group, has called for a $15 minimum wage and has called the increased wages at the chain a "publicity stunt."

"Walmart is in the process of closing 269 stores worldwide, 154 of which are in the U.S. About 10,000 U.S. jobs will be lost, ... "

I've love to see a Super Walmart at the West End of MoBo almost across Rt. 25 where I'm sitting; a pharmacy, supermarket, shopping, jobs for "our Kids" ...

There's empty land for sale there. Wouldn't that be great.

And you think the Community Center is causing an uproar!

Hope the wife calls soon, so nobody tracks me down and ...


Anonymous said...

Recommend comparison between Des Moines, Iowa demographics versus Concord, NH demographics. Des Moines population is 207,000, much more diversified and growing, with cost of living and cost of labor attractive to employees and employers, respectively. Des Moines has become a major insurance and publishing hub, while, with a population of 42,000, Concord's cost of living and cost of labor remains much higher than national averages. I think it important to include Walmart's announcement of 154 store closings in 2016 while bringing attention to modest pay increases. Des Moines has developed sophisticated infrastructure, transportation, affordable housing while, in the shadow of our NH state capital building, businesses flounder while we endeavor to repair Main Street in our lifetimes.
While I am a proponent of fair play, my confidence that government without leadership and vision can solve the problems has eroded.

Moultonboro Blogger said...

According to Walmart CEO: "Walmart will continue to invest in its future, with plans to open more than 300 new stores worldwide over the coming year — in the U.S. Walmart intends to open 50 to 60 Supercenters, 85 to 95 Neighborhood Markets and seven to 10 Sam’s Clubs. We will also open 200 to 240 stores internationally." Of the 154 stores closing, 102 of the closures are "express" stores and 95% of the US closures are within 10 miles on average of a Walmart Super Center. Not defending Walmart by any means, but the company is responding to increased online business and focusing on the super center concept.
As to Des Moines vs Concord, NH still needs a workforce, one that can actually afford to live here. That won't happen on it's own.

Joseph Cormier said...

The wife and I just got back from Concord. Had to have lunch at Buffalo Wild Wings in Concord, with just a little chat with Sam Adams to wash down the wings. She's designated driver anyway!

The wife and I were in Des Moines about this time last year. My son, whom we visited, is in HVAC there ... large buildings, hospitals, etc. types.

He took us on a quick tour of Des Moines and I couldn't believe the changes, since I'd been to the "older" Des Moines, when I was in trucking. Since he was aware through work, he took us to the new Google plant just finishing being built ... $2.5 Billion. A data center is what I think it was. We went to two more, a few miles apart ... Microsoft, for $1.5 Billion, and Facebook for about another $1.5 Billion. Some guy named Warren Buffet's name was also coming up!

The point being, if a town/city can attract some kind of industry ... then ... just get out of the way. I read/was told, while there, that a Saturday Farmer's market could attract around 30,000 folks. That's a lot of cabbage!

The west end of Des Moines, I don't remember being there, on previous trips through, in the 90's. It sure as hell wasn't as beautiful with all of the new homes and office buildings.

Maybe it was the Caucuses? Ya ... right!

They probably have a Grange as well .. but broadband is well known.