Report finds growing wage inequality in N.H.

At 71 percent, New Hampshire has the highest labor force participation and the second-lowest unemployment and underemployment rates in New England, but recent trends in employment and wages point to growing disparities in the state, according to a report from the Carsey Institute at the University of New Hampshire.

The report, “The State of Working New Hampshire 2006,” finds a series of good news/bad news scenarios in trends of wages, job growth and workforce education. It provides a state-focused analysis of the Economic Policy Institute’s national report, “The State of Working America 2005/2006,” released on Labor Day.

“By most indicators, New Hampshire is leading New England and is ahead of the nation in the world of work,” said Carsey Institute director Cynthia “Mil” Duncan. “Yet we shouldn’t ignore troubling news of unemployment among younger workers, growing inequity in wages, and loss of jobs in certain sectors.”

Among the report’s findings:

• Workforce participation is high, it has been declining since 2000, when it was 73 percent. The drop reflects trends in employment of young adults; between 2000 and 2005, there was a sharp decline (75 percent to 67 percent) in the percentage of young adults ages 16 to 24 participating in the labor force.

• New Hampshire had strong positive job growth (approximately 13,000 non-farm jobs between 2000 and 2005), led by the construction (employment up 19 percent), education and health services (up 17 percent), and financial activities (up 15 percent) industries. Significant job losses in manufacturing, transportation and utilities, and information, however, contributed to the decline of 28,000 jobs in the state in the same five-year period.

• New Hampshire’s 2005 median hourly wage of $15.93 is significantly higher than the national average of $14.28, and it represents a 7 percent growth in the median wage since 2000. Yet the growth has been uneven: High-wage workers have experienced the most substantial growth in wages since 1979, with wages increasing 43 percent for these workers, while low wage workers have experienced only 21 percent growth in their wages over the same time period.

“There is steady growth in workers’ wages in the state, but there’s also growth in wage inequality,” said report author Allison Churilla, a Carsey Institute policy fellow and Ph.D. candidate in sociology at UNH.

• New Hampshire maintains a well-educated labor force. In 2005, over one-third of the workforce had a four-year college degree and well over 60 percent had at least some college education. In New England, only Massachusetts and Connecticut have greater percentages of college-educated workers (40 percent and 36 percent, respectively). There has been a corresponding increase in median wages for college-educated workers in the state that has far outpaced wage growth for New Hampshire workers without a four-year degree.

• Second only to Vermont, the state had a high female labor force participation rate (65 percent) and a low female unemployment rate (4 percent) in 2005. Growth in women’s median wages in the state has been positive over the last two decades, far outpacing men’s growth. Between 2000 and 2005, women workers in New Hampshire benefited from the greatest growth in median wages in New England (15 percent). Yet female workers still earned about 80 cents for every dollar earned by men in New Hampshire, the second-lowest earnings ratio in New England.