Lower-paid N.H. workers have seen wages decline compared to cost of living, even as economy booms

Saturday, September 07, 2019

CONCORD — Despite years of economic growth and record employment in the state, lower-paid New Hampshire workers have seen their wages decline compared to inflation over the past decade, according to a new report.

“In straightforward terms, those individuals in the state making the median wage or less actually have less purchasing power than … before the Great Recession,” according to “New Hampshire’s Workforce, Wages and Economic Opportunity,” a just-released report from the New Hampshire Fiscal Policy Institute. “Individuals consistently making less than the median wage of $20.95 per hour in 2018 have experienced what feels like a pay cut compared to the past.”

The report found that the largest gains in pay rates came to those who were making the most in the first place.

Similar results have been found in other parts of the country, often depicted as a rich-get-richer syndrome in which the benefits of the longest economic expansion in American history are widening economic disparity.

The report, released last week by the independent nonprofit group, examined wages for workers ages 18-64 in New Hampshire from 2005 through 2018. It broke workers into 10 groups based on their wages compared to the overall range, starting with those whose wages were in the lowest 10%, then those whose wages were from 11% to 20% of the range, then 21% to 30% and so on.

The median or central point in the range was $20.95 per hour, which for a full-time worker equals $43,500 a year.

The study found that for the bottom half of these categories, covering everybody making less than 60% of the range of salaries, wages actually declined compared to inflation during this period. In other words, the number of dollars on their paychecks may have risen but they could not buy as much with it.

The relative decline was very small for those in the middle of the range, less than 1%, but some groups saw their relative wages fall by almost 3% over that period.

By contrast, all those making more than 60% of the median wage saw their pay go up compared to inflation. Those in the top 10% saw their wages increase the most — more than 6% over this period.

The report did not recommend any actions in response to this situation, but did note that New Hampshire is the only New England state that uses the federal minimum wage level of $7.25 an hour. In all neighboring states the minimum wage is at least $10 an hour this year and is slated to rise through at least 2015.

In other findings, the report said:

■Median household income in New Hampshire, which includes types of income other than wages and income from everybody in each household, is higher than the national average — $73,381 in 2017 compared to $60,336 — but only returned to pre-Great Recession levels in 2017. Median income means half of households make more than that figure, and half make less.

■Median household income varied greatly throughout the state, from $45,386 in Coos County, the northernmost county, to almost twice as much, $85,619, in Rockingham County along the Seacoast.

■About a third of the state’s households have total income below $50,000, and about one-third have income above $100,000.

The report can be seen online at http://nhfpi.org/research/state-economy/new-hampshires-workforce-wages-and-economic-opportunity.html.

Concord Monitor