Minimum wage legislation heads to crossover

Senate bill would require public works contractors to pay prevailing wage

Employers will have to pay workers more if bills passed by both sides of the Legislature become law.

The House passed a bill upping minimum wage to $12 an hour in three years, and increased the tipped wage as well.

The Senate passed a bill requiring contractors on state public work projects to pay the prevailing wage and benefits.

The House passed its minimum wage bill after shrugging off an amendment to raise it to $15 an hour as not “practical.” Currently the state doesn’t have a minimum wage, relying on the federal minimum of $7.25 an hour. The surrounding states pay at least $10.50 an hour.

“This is about a movement not me,” said Rep Kristina Schultz, D-Concord, who pushed for $15 an hour citing the overwhelming support for it at public hearings.   “We heard story after story about people who can’t make ends meet and [even] $15 would be a struggle.”

But the House voted that down 79-274.

“We took a more modest approach,” said Rep. Brian Sullivan, D-Grantham, who chaired the committee.   “For those that want $15, we hear the drumbeat. We can reassess two or three years from now.”

HB 186 would increase the minimum to $9.50 an hour next year, $10.75 the following and $12 an hour in 2021. It would also increase the tipped minimum from 45 to 50 percent of the minimum. That would put the tipped minimum higher than SB 10, passed by the Senate Commerce Committee Tuesday, which also aims for a $12 minimum but would set a fixed tipped wage at $4, independent from the minimum.

Only 1,400 people make the minimum wage, out of workforce of over 700,000, said Rep. Jack Flanagan, R-Brookline, arguing that it wouldn’t make any difference. But business groups have opposed it because it would make a difference, partly because many make under $12, and by pushing up the starting wage, it would push up wages generally.

Flanagan cited other reasons for not passing the bill, arguing that the increase in wages would cause employers to lay off staff, cut benefits, move toward automation or outsourcing overseas and drive up consumer prices. It would also increase other business costs, since unemployment compensation and workers compensation taxes are tied to payroll.

But on the other hand, supporters said it would increase disposable income, resulting in more consumer spending, lower inventories and more hiring. It would also reduce the need for low-wage workers to take advantage of public benefits, saving taxpayers money. Others said that continuing to have wages comparable to the Deep South would drive the workforce to neighboring states at a time when the state desperately needs workers

“The minimum wage has been stagnant for 10 years,” said Timothy Soucy, D-Concord.  “New Hampshire should have its own minimum, not default to the federal government.”

The House passed the bill over to the Senate, 210 to 145.

A similar debate was taking place on the Senate side over SB 271, which would require a prevailing wage on state-funded and -administered public work projects. Again, all of New England has prevailing wages, so the Granite state becomes a haven for “many out-of-state contractors that underpay their workers.  New Hampshire tax dollars should be used to support workers in New Hampshire,” said Kevin Cavanaugh, D-Manchester.

But Sen. Morse, R-Salem argued that the bill would increase UNH construction costs by $7 million on $80 million job. If that was true, added Sen. Jeb Bradley, R-Wolfeboro, it would cost the Highway Fund an extra $20 million a year, resulting in a 3-cent increase in the gas tax.

There was also concern as to whether this would apply to municipalities, schools board and counties, since all rely on state funding for construction projects, but the bill’s backers insisted that the words “state-administered” carved them out.

Sen. Dan Feltes, D-Concord, cited research that higher-paid construction workers got the job done on time under budget with fewer materials, so it would actually save the state money. And well-paid workers have more disposable income, creating jobs.

If New Hampshire remains the only state without a prevailing wage in the area, it would mean “fly-by-night operations” will come here and we will have a “race to the bottom,” Feltes said.

SB 271 passed 14-10, over the objection of the Republicans, and will go on to the House without being considered by the Senate Finance Committee.