NJ’s minimum wage rises in January, with bigger jumps to come
In two weeks, New Jersey’s minimum wage increases by its largest amount in a few years – although at an extra 16 cents an hour, bringing the minimum to $8.60 for 2018, the impact is expected to be limited.
“It’s not going to move the needle for the people getting it or have a major negative impact on business, not at all,” said Tom Bracken, president of the New Jersey Chamber of Commerce.
The 16-cent increase is the largest since voters tied the wage to inflation in 2013 while passing a constitutional amendment that raised the minimum wage by $1 to $8.25. But Brandon McKoy of New Jersey Policy Perspective says it amounts to about $400 a year for a full-time worker.
“That is still not nearly enough for people to be able to securely afford the needs they have,” McKoy said. “We need to take further action to make sure the minimum wage is not paying a poverty-level wage.”
McKoy said a full-time, minimum-wage worker will earn around $18,000 next year.
“In New Jersey, that’s not even close to what you need in order to be able to afford even the most basic of needs, not even have savings or be able to go to the movies every once in a while,” McKoy said.
The 16-cent increase keeps the minimum wage growing at the rate of inflation, calculated at 1.9 percent this year. If inflation were to stay at that rate, the minimum wage would not get to $15 an hour until 2048.
Much larger increases could be on the horizon, if Democrats who will be in control of the Statehouse have their way.
Gov.-elect Phil Murphy and legislative leaders support a $15 minimum wage. McKoy said Murphy pledged it would be enacted in his first hundred days in office and could get the minimum wage to that level within three or four years.
“It’s something that has a lot of support around New Jersey. Look at public polling on minimum wage, a lot of people want to see that happen and I think voted for him in part in order to see that happen,” McKoy said.
Bracken said the Chamber of Commerce has always taken the position that the minimum wage should be higher – but over a “reasonable period of time” so businesses can plan.
“A graduated path with some exemptions for different industries that are maybe seasonal or just for other reasons need to be exempted. Something like that we’d be very receptive to,” Bracken said.
“It still is probably going to result in people working less hours, maybe some people losing their jobs, maybe increase in automation,” he said. “All those things will still come into play. But at least the businesses will know with some certainty what the increase is and they can deal with that.”
McKoy said he isn’t too worried about the first two of those prospects.
He said people should be able to afford their needs while working fewer hours or not holding multiple jobs, so they have more time for their communities and families. And said there will be more jobs, not fewer, as businesses hire to meet increased demand resulting from consumers having more money.
“On the front of automation, that’s always a concern. I think that automation is going to come no matter what the level of minimum wage is,” McKoy said. “Businesses are trying to automate. They’re trying to figure out how implement automation services and robotics services into their businesses now.”
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Michael Symons is State House bureau chief for New Jersey 101.5 and the editor of New Jersey: Decoded. Follow @NJDecoded on Twitter and Facebook. Contact him at email@example.com