South Jersey’s lowest-paid workers will all get a 14 percent raise starting Wednesday, when New Jersey raises its minimum wage from $7.25 to $8.25 per hour.
Area businesses, meanwhile, are preparing for the financial impact on their payrolls.
Pragnesh Patel, who owns Billy Bob’s Car Wash in Middle Township, expects to raise prices to help make up some of the difference at his 13-employee business.
“We are a labor-intensive business, and it is going to impact us. Prices will go up. … Otherwise, we can’t survive,” he said.
Six in 10 New Jersey voters approved the minimum wage increase in November, the state’s first increase since 2009. The constitutional amendment also guarantees future minimum wage increases tied to inflation.
A dozen other states, including Connecticut, are raising their minimum wage above the federal minimum of $7.25 on Jan. 1.
In New Jersey, proponents of the increase say it will immediately impact 254,000 workers struggling to afford to live in a high-cost state.
The New Jersey Policy Perspective, a Trenton-based liberal think tank, said the raise will help those facing increasing costs of health care, transportation, housing and other needs.
Opponents, including business groups, say the raises will mean layoffs and reduced hours, and will make for a less-hospitable business climate.
Michael Busler, a business professor at The Richard Stockton College of New Jersey and a public policy analyst, said the change will particularly affect seasonal businesses along the shore this summer.
“The guys it’s going to clobber are the seasonal businesses on the boardwalks that rely on minimum wage workers to keep their businesses afloat,” Busler said.
Busler said he believes the wage increase will lead businesses to hire fewer workers because of the additional cost.
“Just the people you’re tying to help by raising the minimum wage you end up hurting, because there are no jobs for them,” he said.
Some South Jersey businesses are not expecting much of an impact, because most of their employees already earn more than $8.25 per hour.
Irene Djambinov, co-owner of Plaza Discount Liquors in Ventnor, said the minimum-wage increase will not affect her long-term employees but may manifest in the summer, when she hires four minimum-wage employees.
“I maybe won’t hire as much summer help as I might (otherwise),” she said.
“For small businesses, it’s not going to be easy, especially now, because the economy in this area is not very good. It’s going to be another hit on us,” she said.
Judy Young Link, who owns Young’s Skating Center in Mays Landing, expects a minimal impact on the family-owned rink that employs 25 to 30 people, many of them teenagers. Most of the employees already earn above minimum wage, she said.
“There will be an impact, but we try to absorb it,” she said.
Across the country, 21 states will have a higher minimum wage than the federal requirement next year, with 11 more and Washington, D.C., expected to consider increases.
President Barack Obama has proposed increasing the federal minimum wage, but Congress has not agreed.
New Jersey Policy Perspective estimates that 254,000 workers will see a wage boost in their paychecks and that 189,000 more who earn between $8.25 and $9.25 per hour will indirectly benefit as their wages are adjusted upward. Most of the beneficiaries are working adults, not minors, the group says.
Democrats who control the New Jersey Legislature decided to put the minimum wage question to voters after they could not reach agreement with Republican Gov. Chris Christie on a wage increase.
Democrats sent Christie a bill raising the wage to $8.50 per hour with annual cost-of-living adjustments built in. Christie sent it back, offering a $1 increase phased in over three years with no automatic adjustments.
The state’s business community spent more than $1 million lobbying against the measure, which they claim will lead to layoffs and reductions in hours for low-wage workers and will dissuade businesses from opening or relocating to New Jersey.
Proponents, who spent slightly less, contend that workers cannot survive on $7.25 per hour and that all employees deserve a living wage.
Senate President Stephen Sweeney, a Democrat, insisted on the automatic annual adjustments because he did not want the minimum wage to continue to be up to the whims of the Legislature and the politics of the day.
The Associated Press contributed to this report
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