By GARRY RAYNO, InDepthNH.org
CONCORD — If your paycheck does not appear to go as far as it once did, you may be on to something.
A study done by the NH Fiscal Policy Institute indicates a typical family of four disposable income over the last decade has dropped by $17,349 due to earnings not keeping up with the increased costs associated with housing, child care, health care, food and energy.
Over the last 19 years, the cost of basic living expenses has increased significantly while the cost of many luxury goods like televisions and computers have gone down, the study found.
The typical New Hampshire family has lost major ground over the past decade, said Nicole Heller, Senior Policy Analyst at NHFPI, as the cost of basic necessities has risen substantially faster than household incomes.
“Ten years ago, a typical family could cover the basics, pay for other essentials, and still have a modest cushion for emergencies and savings,” Heller said. “Today, that same family is falling short. Not because they’re earning less, but because the cost of living has grown so much faster than incomes.”
The report uses two decades of federal and state data to model household budgets for median-income families in 2005, 2015, and 2024. The organization used inflation adjustments to compare how the cost of housing, child care, health care, food, transportation and energy have changed in relation to income over time.
By holding household characteristics constant and adjusting for regional costs, the analysis isolates long-term shifts in affordability rather than short-term price changes, Heller said.
A median income household with a family of four in 2024 fell nearly $1,900 short annually covering only these core household expenses: housing, child care, food, gasoline, and health care.
The typical family of four earning $99,782 had no money available to pay for student loans, clothing, vehicle payments, recreation or other everyday family costs, the study found.
Because the analysis uses the median household income, half of New Hampshire families have even less income available to meet essential expenses.
Ten years ago, a New Hampshire family with the median household income would have had an inflation-adjusted surplus of about $15,400 after covering the same basic needs that could be used for other expenses or emergencies or to invest.
The median income for a four-member family was $90,434 in 2015 and $88,749 in 2005 adjusting for inflation.
“The squeeze families are feeling isn’t a matter of personal budgeting – it’s a structural affordability crisis,” said Gene Martin, NHFPI Executive Director. “When families can’t afford to live and work in New Hampshire, it threatens the long-term strength of our communities and our overall economy.”
During the last decade housing costs have soared more than doubling, increasing 164 percent, while home prices surged 275 percent since 1999, the report notes.
A typical family buying a median-priced home in 2024 would need income of $157,500 to avoid being cost-burdened, about $57,700 more than the state’s median household income.
Energy and food costs have also increased dramatically over the last decade.
Home energy costs have nearly doubled since 2005, while food prices in the Northeast are up 72 percent, outpacing inflation.
A healthy food plan for a family of four now costs approximately $12,000 annually, the study notes.
Health care costs are consuming more of family income now than in the past.
Average family health insurance premiums shared by employers and employees rose 121 percent since 2005, reaching $26,119 in 2024 and deductibles are up 323 percent over the same period.
Child care costs continue to be a burden on young families in New Hampshire despite the influx of federal pandemic relief and rescue money that was used to prop up the system.
Child care for two children under age five costs about $30,000 per year or about one-third of median household income.
Over a typical childhood, a family can expect to spend $300,000 for child care for two children.
College costs and student debt have also increased significantly for families.
Tuition at New Hampshire’s public colleges has risen about 60 percent since 2005 and remains among the highest in the nation.
Granite State college graduates have the highest average student-loan debt in the country making it even more difficult for young families to make ends meet.
The more rural areas of the state are also feeling greater pressure with increased living expenses as the earnings of people in those areas are much lower than those living in the golden triangle between the Seacoast, the Nashua area and greater Concord.
The study looks at median salaries by counties over the past 20 years.
The highest median salaries are in Rockingham, Hillsborough and Merrimack counties and have been for the last 15 years while the lowest are in Sullivan and Coos counties.
Today, the median income in Rockingham County is $113,927, in Hillsborough $100,436 and Merrimack $93,944 while the median income in Strafford, Belknap, Grafton, Carroll, and Cheshire counties is in the $80,000s.
But the median income in Coos County is $58,439, and in Sullivan it is $75,929.
Income has increased the most since 2009 in Carroll and Grafton counties and the least in Coos and Sullivan counties.
“The increases likely reflect both labor market changes that raised wages and, particularly in amenity-rich areas, recent population growth due to the domestic in-migration of individuals and families from other states,” the study notes. “Families migrating to New Hampshire may be bringing higher incomes to regions than many families who were already living in those counties.”
Along with those living in rural areas, young families are particularly impacted by the increasing cost of living essentials and incomes that do not keep pace.
“From an economic perspective, if New Hampshire’s households are experiencing high living costs and find themselves living paycheck-to-paycheck to afford the essentials, they will have less income to spend on other goods and services in the local and state economy, including those that support key tax and revenue streams for the state,” Heller said. “Families may also be limited in their abilities to save for emergencies and retirement, creating a system in which more Granite State families may fall into poverty, including older adults.”
Effectively addressing this combination of new and different challenges, relative to recent decades, will be a critical task for communities, businesses, and policymakers to help ensure New Hampshire will thrive today and in the future, she said.
Garry Rayno may be reached at garry.rayno@yahoo.com.