Stateline Story

Minimum Wage Issue Heats Up

  • June 16, 2011
  • By Pamela Prah

Republican lawmakers in New Hampshire want to get rid of provisions for a state minimum wage, but to do it, they will have to use their supermajority in the legislature to override a veto of Democratic Governor John Lynch.

The legislation that Lynch vetoed wouldn't repeal the state minimum wage law outright. But it would guarantee that New Hampshire's minimum wage won't go higher than the rate set by the federal government, currently $7.25 an hour. 

As it happens, that's the same rate New Hampshire has set now, just like 22 other states, according to the U.S. Labor Department . But just a few years ago, that wasn't the case. New Hampshire's state minimum rate was already $7.25 when the federal government's was $6.55. Businesses complained that having a rate higher than the federal government's was a drag on their bottom lines, one that discouraged them from hiring more workers.

Lynch, however, believes the state should keep its option of having a higher rate. "New Hampshire's current minimum wage is set at the federal level, and it is appropriate," Lynch said in his veto message . "But four years ago, we agreed that - after a decade of federal inaction - we needed to act to help families meet rising costs. This legislation removes the New Hampshire legislature from that debate, and gives authority to set the minimum wage solely to the federal government." 

Federal minimum wage law always supersedes state minimum wage laws where the federal rate is greater than the state's. In those states where the state minimum wage is more than the federal rate, the state minimum wage prevails.

As in New Hampshire, lawmakers in Missouri , Nevada and Wyoming considered measures that would have essentially guaranteed the federal rate applied in their states. All of those measures failed to pass before adjournment. In Maine, as Stateline reported , the legislature considered a measure that would have allowed a lower minimum wage for teens, but it failed, too.

Proponents of a higher state minimum wage see it as a way to put more money into the pockets of working families who then boost the local economy by spending more. Critics say a higher minimum wage doesn't help the poor and often forces employers to let go of workers when the rates go up.

Some in New Hampshire wonder why Republicans there, if they really wanted to send a message, didn't legislate a state minimum wage that is lower than the federal level. That's what four other states have done, even though it's largely symbolic because the federal rate applies to them.  Arkansas ' rate is $6.25 an hour; Minnesota 's is $6.15; and both Georgia and Wyoming have rates set at $5.15.

"The startling thing about the New Hampshire minimum wage repeal is its implicit deference to federal authority to set wage rates," says an editorial in the Sentinel Source. "This from Legislative leaders who ordinarily stomp their feet over Washington's ability to do anything right." 

Elsewhere on the minimum wage front, lawsuits in Florida and Washington State ensured that both states increased their state minimum wages this year. Those states are among 10 with minimum wage laws that provide for annual adjustments to reflect increased costs of living. Florida didn't want to increase its rate because of slight deflation that occurred in 2008-09. Washington businesses sued to block the automatic increase there. In both cases, courts ruled that the rates had to go up.

Florida's wage went to $7.31 from $7.25 and Washington's minimum wage increased to $8.67 from $8.55 to $8.67, the highest in the country.

"Like the majority of these laws, neither state allows for decreases to the minimum wage in the rare cases where the cost of living falls," explains Jen Kern who heads up the minimum wage campaign for the National Employment Law Project, which was involved in the litigation.

The eight other states with minimum wages that are linked to a consumer price index are Arizona , Colorado , Missouri, Montana , Nevada , Ohio , Oregon and Vermont .

Currently 18 states, plus the District of Columbia , have minimum wage rates set higher than the federal minimum wage.  Five states do not have an established minimum wage requirement but employers there must adhere to the federal level. 

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