>> WELCOME TO NEW HAMPSHIRE'S BUSINESS. IS THE MINIMUM WAGE IN NEW HAMPSHIRE ABOUT TO GO UP? MAYBE, WE WILL A FIND OUT SOON. HERE IS WHAT THE MINIMUM WAGE LOOKS LIKE IN NEW ENGLAND AND LOOK AT NEW HAMPSHIRE. WE DEFAULT TO THE FEDERAL MINIMUM WAGE OF 7.25 AN HOUR, BUT THAT'S THE LOWEST IN NUPPING, CONNECTICUT 10.10. RHODE ISLAND, MAINE AT 11 AND MASSACHUSETTS AT 12. SO, HERE IS A MINIMUM WAGE PICTURE IN NEW HAMPSHIRE. 13,000 WORKERS ARE AT OR BELOW THAT 7.25 FIGURE. IT EQUALS ABOUT 3% OF THE WORKERS PAID HOURLY AND IN MAINE, COMPARISON, THAT'S 3% IN NEW HAMPSHIRE. IN MAINE 1.8%, MASSACHUSETTS 1.9 AND U.S. 2.1%. NOW, SENATE BILL 10 IN THE NEW HAMPSHIRE LEGISLATURE WAS JUST CONFERENCED THIS PAST WEEK BY THE HOUSE AND SENATE AND AGREED THAT $10 THE MINIMUM WAGE IN NEW HAMPSHIRE WILL BE CREATED AT $10 AN HOUR IN 2020. $12 AN HOUR IN 2022, BUT THE ISSUE HAS BEEN THE TREATMENT OF TIPPED EMPLOYEES AND WE'LL TALK ABOUT THAT WITH MY GUEST, RUST THIBEAULT, THE PRESIDENT OF APPLIED ECONOMIC RESEARCH. WELCOME BACK. >> GREAT TO BE HERE, FRED, THANK YOU. >> THERE ARE PROS AND CONS TO THIS ISSUE. SMALL BUSINESSES SAY IT'S GOING TO COST ME MORE, I'M GOING TO HAVE TO LAY PEOPLE OFF AND THOSE WHO ARE FOR IT SAY, IT MAKES OUR EMPLOYEES HAPPIER BECAUSE THEY'RE MAKING MORE MONEY. AS AN ECONOMIST? >> WELL, THE ECONOMISTS HAVE KIND OF TWO VIEWS ON IT, ALSO. ONE IS LET THE MARKET DECIDE IF PEOPLE ARE WILLING TO WORK FOR 7.25 AN HOUR, AND EMPLOYERS ARE WILLING TO PAY 7.25 AN HOUR, LET IT BE. >> YEAH. >> ON THE OTHER HAND, AND THERE'S ALWAYS ANOTHER HAND IN ECONOMICS. >> SURE IS. >> THERE'S A SENTIMENT THAT PEOPLE AT THE BOTTOM OF THE FOOD CHAIN JUST DON'T HAVE ENOUGH INFLUENCE TO GET THEIR FAIR SHARE OF THE ECONOMIC PIE. >> RIGHT. >> SO THEREFORE, A MINIMUM WAGE HELPS THEM. A LOT OF THE STATES HAVE GONE ABOVE 7.25 THE FEDERAL MINIMUM WAGE WHICH HASN'T BEEN CHANGED SINCE 2009. >> THERE'S OUT OF OUR 50 STATES, 20 ARE STILL WITH NEW HAMPSHIRE AT 7.25 AND 30 ARE ABOVE THAT. >> AND SOME CITIES HAVE GONE ON THEIR OWN. >> EMPLOYERS, TOO, FRED. >> AND EMPLOYERS. >> McDONALD'S, WALMART. I SAW AN AD, McDONALD'S, $11 AN HOUR. AT McDONALD'S. I KNOW THAT SOME OF THE BANKS IN THE STATE ARE $15 AN HOUR MINIMUM. SO, THERE IS A KIND OF A COMBINATION OF THINGS GOING ON. SOME EMPLOYERS REALIZE THAT IN ORDER TO ATTRACT GOOD EMPLOYEES, YOU CAN'T DO IT AT 7.25 AN HOUR. >> RIGHT, RIGHT. >> SO THEY GO ABOVE IT. >> AND THIS SHORTAGE OF EMPLOYEES, TOO. AND ONE OF THE TACTICS THAT STATES ARE USING, I GUESS WE ARE, TOO. IF WE GO FROM 10 IN ONE YEAR TO 12 THE NEXT. THEY'RE PHASING IN. >> THAT'S RIGHT, IT'S BUILT INTO SOME OF THE LEGISLATION IN OUR LABORING STATES THAT THEY ALSO WILL BE MOVING UP. REMEMBER, IF WE GO TO $10 AN HOUR IN NEW HAMPSHIRE. IF WE GO BACK TO THE FIRST GRAPH AND LOOK AT THAT, YOU SEE EVEN AT $10 AN HOUR, WE STILL WOULD BE THE LOWEST IN NEW ENGLAND. >> AND CURRENTLY, THE TIPPED EMPLOYEES, THOSE WHO GET TIPS, WHO ARE WAITRESSES AND WAITERS. THEY'RE PAID-- THEY'RE SHORT 45% OF THE CURRENT MINIMUM WAGE OF 7.25 AN HOUR AT THE MOMENT. WHICH IS ABOUT 3.27 AN HOUR. AND THEN THE-- IF THEY DON'T MAKE THAT, THEN THE EMPLOYER HAS TO MAKE UP THE DIFFERENCE. IT APPEARS THEY'RE GOING TO KEEP THAT IN THE LEGISLATION AT THE STATE HOUSE IN CONCORD TO SOME DEGREE, ALTHOUGH THEY HAVE GONE TO THE NEW MINIMUM WAGE, WHICH WOULD BE, IF IT'S SIGNED INTO LAW BY THE GOVERNOR AND THAT'S A QUESTION MARK, WE DON'T KNOW YET, WOULD GO TO $12 AN HOUR. >> RIGHT, WELL, A LOT OF THE STUDIES NATIONALLY HAVE SHOWN IF YOU DO RAISE THE MINIMUM WAGE, SOME EMPLOYERS WILL CUT BACK ON THE NUMBER OF EMPLOYEES THAT THEY COPE -- KEEP ON THE PAYROLL AND I THINK THAT MIGHT HAPPEN IN SOME OF THE RESTAURANTS AND THE STATE AND THEY MIGHT STAFF A LOT TIGHTER THAN THEY OTHERWISE WOULD. >> LET'S GO TO THE GRAPH, THIS IS THE HISTORY OF THE MINIMUM WAGE IN THIS COUNTRY AND LOOK AT THAT, 1938 AND THIS IS IN 2017 DOLLARS, ADJUSTED FOR INFLATION. SO THE NUMBERS YOU'RE SEEING ARE IN TODAY'S DOLLARS, SO TO SPEAK, BUT LOOK WHERE THEY ARE, 1938, 1968, 11.18 OVER $2 MORE THAN WE HAVE NOW AND OF COURSE, 7.25 CURRENTLY. THIS IS FEDERAL. >> YEAH, WHAT IT SAYS IS THAT THE MINIMUM WAGE HAS NOT KEPT PACE WITH INFLATION. IF YOU LOOK TO THE LAST INCREASE, 2009, TEN YEARS AGO, THAT'S ABOUT THE LONGEST WE'VE GONE WITHOUT A HIKE IN THE MINIMUM WAGE, AND DURING THAT 10-YEAR PERIOD INFLATION HAS EATEN UP 20% OF THE BUYING POWER OF THAT 7.25 AN HOUR. >> RIGHT, AND THAT'S THE HISTORY OF THE MINIMUM WAGE, SO MAYBE NEW HAMPSHIRE WILL GET A MINIMUM WAGE THAT'S OUR OWN, AND HIGHER THAN WE HAVE NOW, BUT WE DON'T KNOW YET BECAUSE WE DON'T KNOW WHAT THE GOVERNOR'S GOING T