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New Jersey stuck between small business and affordable housing in minimum wage debate

NORTH WILDWOOD — With about 130 employees, the Gateway 26 casino arcade is one of the largest employers on the Wildwoods Boardwalk outside of Morey’s Piers.

But this year, the number of employees was cut in half with the implementation of a new system that counts and distributes points and tickets toward prizes. The system, which debuted this week, is part of a $600,000 investment to head off an expected minimum wage increase to $15 per hour, something Gov. Phil Murphy campaigned on and vowed to bring to New Jersey.

“I feel bad that we had to do this, especially for 14- and 15-year-old kids that worked here,” said Brian Sharpe, owner and managing partner of Gateway 26, located on the Boardwalk at 26th Avenue. “But with the probability of a $15 minimum wage … we could not take those extra costs and put it on the consumer and expect to stay competitive.”

Nowhere in the United States can someone working a full-time, minimum-wage job afford to rent a two-bedroom apartment, according to a new study by the National Low Income Housing Coalition. In New Jersey, one of the most expensive states to live in the country, the problem is particularly bad.

But raising the minimum wage to $15 per hour could squeeze small businesses and hurt the local economy, particularly in shore towns that rely on seasonal businesses to bring people to the area, some economists say. Now, lawmakers in Trenton are grappling with an affordable housing crisis and the negative effects their proposed solutions could have on the state’s economy.

“You can’t just hit the businessman over the head by making the minimum wage $15 an hour next year,” said Assemblyman Vince Mazzeo, D-Atlantic, who also owns the B.F. Mazzeo produce market in Northfield. “It has to be a gradual change over three to five years, and there has to be carve-outs for agriculture and seasonal businesses.”

NJ 'working poor' can’t afford housing, food basics

More state residents struggle to afford basic expenses such as housing, food, transportation and health care, according to new national data, indicating life in New Jersey is becoming less affordable for many people.

A person making minimum wage would have to work an average of 131 hours per week, or more than three full-time jobs, to afford a two-bedroom rental unit in this state, according to the NLIHC.

South Jersey fares better than central or northern New Jersey, the report found, but not by much.

In Atlantic County, the average person making minimum wage, which is $8.60 per hour, has to work 117 hours a week to afford a two-bedroom rental. In Cape May County, the number is 101, Cumberland is 103 and Ocean is 131.

Raising the minimum wage to $15 per hour would cut down on the number of hours needed to work, but ideally, a resident in New Jersey has to make about $28 per hour to afford a two-bedroom rental, the NLIHC report found.

“Make no mistake: While the housing market may have recovered for many, we are nonetheless experiencing an affordable housing crisis, especially for very low-income families,” U.S. Sen. Bernie Sanders, who ran for president in the Democratic primary in 2016, said in a statement with the NLIHC report. “That is because wages have been stagnant for decades, while the cost of housing keeps going up.”

But raising the minimum wage to $15 per hour would result in the loss of nearly 32,000 jobs in New Jersey, according to a separate study by the Employment Politics Institute.

The most affected demographic would be people without a college degree, which includes teenagers who have not yet finished school, the EPI study found. Overall, about 90 percent of the job losses would be people who don’t have a college degree and would affect the retail, recreation accommodation and food service industries.

And it is unclear how many people would be pulled out of poverty in New Jersey because half of the working-age people who live in poverty do not have a job, and thus would not be affected by the minimum-wage increase, the EPI study said.

“We have to choose between a 14-year-old and someone who has 20 years of work experience … and we’re going to lean toward the person with experience,” Sharpe said, adding that a person working on the floor made about $10 per hour in the old system. “I feel bad for minors because I think it’s going to be extremely hard for them to get jobs.”

Jason Dugan, co-owner of Douglass Fudge on the Wildwood Boardwalk, agreed there would have to be changes if the minimum wage were raised to $15 per hour.

“I think it might hurt the consumer with higher prices,” Dugan said, adding he has about 40 employees between two stores. “I agree that employees should be paid fairly because they are honest, hard-working people, and we try to do our best with that already.”

Mazzeo said he has heard concerns from people in Atlantic County about a minimum-wage hike, but added that other legislators share concerns about seasonal businesses.

“You have to remember that the people who now make $15 or $16 an hour will probably also have to get a raise to make it fair,” he said. “I’m not sure what (Phil Murphy) will support, but there has been discussion among (legislators) about those carve-outs.”

Climate change moving fish north, threatening turf wars, study says

World conflict is likely to increase over access to fisheries, as species move north in response to a warming ocean, according to a Rutgers University study published last week in the journal Science.

“Seventy or more countries will likely have to start sharing with their neighbors” in coming decades, said lead author Malin Pinsky, including the U.S., Canada and Mexico.

The danger comes from overfishing when countries can’t cooperate, he said. Consumers and economies are harmed by overexploitation.

“If there’s a fish fight, you end up with less fish for everyone — less fish on every plate, fewer jobs for local economies and less profit for local businesses,” said Pinsky, 37, an assistant professor in Rutgers’ Department of Ecology, Evolution and Natural Resources who is soon to be an associate professor.

The right to harvest particular species of fish is usually decided by national and regional fishery management bodies, which assume species don’t move much, Pinsky said.

“Well, they’re moving now because climate change is warming ocean temperatures,” he said. Studies have estimated the oceans have absorbed about 93 percent of recent increases in global temperatures.

Fish are shifting into new territory at a rate averaging 43.5 miles per decade, and these shifts are expected to continue or accelerate, his study found.

Some species have already moved considerable distances.

When Atlantic mackerel moved into Icelandic waters around 2007, Icelanders started to fish them along with fishermen from the European Union, who had traditionally had the mackerel to themselves.

“They couldn’t agree on how to share the catch,” said Pinsky, a Princeton resident who grew up close to the coast in Maine. “The combined competitive race to fish ended up overfishing that population.”

The fishery conflict escalated into a trade war that affected Iceland’s decision not to join the European Union.

“Spillover from what can seem like a small, distant issue becomes much bigger,” Pinsky said.

Conflicts are already erupting in the U.S., as fish have pushed across state boundaries.

“There’s quite a vigorous debate now between states about access to the summer flounder fishery,” Pinsky said, “as there has been a northern shift in (the species).”

The epicenter of the fishery used to be off Virginia but is now 250 miles farther north, off New Jersey and New York.

Gregory DiDomenico, executive director of the Garden State Seafood Association, said northern states such as New York argue they should now get a larger allotment for their fishing industries.

He said allotments, which are set by the Atlantic States Marine Fisheries Commission and the Mid-Atlantic Fishery Management Council, are based on the history of landings by state.

But DiDomenico thinks people are misusing studies such as Pinsky’s to argue they should get a bigger share of the fishery.

The location of species shouldn’t matter, he said.

“People from northern states, including New York, are claiming that the so-called geographical changes in fish stocks is a justification for taking fish from other states,” DiDomenico said. “We don’t see it that way. New Jersey, Virginia, and North Carolina have always gone to where fish are. We are very unhappy at this approach.”

Some species are simply expanding their range into a new habitat, while others, such as lobster, are expanding poleward and leaving areas where they were found traditionally.

The center of the offshore lobster distribution used to be off northern New Jersey, Pinsky said. Now it’s off the Gulf of Maine.

Pinsky said warming ocean temperatures, shell diseases and new predators all appear to be playing a role in lobsters’ northward shift.

“Much of the underlying driver is warming,” he said.

DiDomenico said there is probably a host of things causing the local lobster fishery to decline, including water quality.

“Not everything is explained by climate change,” DiDomenico said. “Some of it is related to management. That goes for fin fish as well.”

Predators are also moving north, and new ones are now nipping at the heels of the lobster in places where they didn’t used to face them. Important offshore predators such as black sea bass have moved north and are predating lobster, Pinsky said.

Lobster in the Gulf of Maine haven’t had to deal with predators for decades. Cod had been an important lobster predator there but were overfished, so the population fell dramatically, he said.

Another example is tilefish, Pinsky said. For years, fishing regulations only applied south of Cape Hatteras, North Carolina, since that was traditionally the northern part of the tilefish range. But in the early 2000s, the species showed up in new places.

“For nearly a decade, there was a fishery north of there. But there were no rules,” Pinsky said.

That changed in 2015, when the Mid-Atlantic Fisheries Management Council instituted emergency rules for more northern states, he said.

Political entities often don’t have a good process for how to start sharing the wealth that comes as new fisheries emerge, Pinsky said.

“That’s what we are calling for in this paper. We are saying we know already there is a problem. It’s going to become bigger in the future. So we need to set up those mechanisms now for sharing information and science on where the fish are, and make decisions on how to divide the catch equitably and fairly so there isn’t a race to fish.”

Ocean Resort Casino license hearing continues Thursday

ATLANTIC CITY — Ocean Resort Casino expects to capture more than 10 percent of the resort’s gaming market when it opens later this month, according to executives who testified Wednesday before the state Casino Control Commission.

Executives’ gambling revenue projections would put the former Revel at about the middle of the Atlantic City casino pack, but owner and Chairman Bruce Deifik told regulators the reopening of the $2.4 billion Boardwalk property, which he purchased for $200 million Jan. 4, will “surprise the world.”

“We have an incredible opportunity to turn Ocean Resort into one of the greatest properties in the world,” Deifik said Wednesday. “Not just in Atlantic City, but in the world.”

Deifik and Chief Financial Officer Alan Greenstein testified for nearly 3½ hours Wednesday before the license hearing was suspended. The hearing will resume at 9:30 a.m. Thursday.

The casino is scheduled to open June 28, the same day as Hard Rock Hotel & Casino Atlantic City. With $40 million cash in reserves, Deifik said he is ready to go.

Actor, comedian and entertainer Jamie Foxx will serve as the host for opening weekend, Deifik said Wednesday, adding he also tried to bring a beloved New Jersey icon to town.

“We went to Bruce Springsteen’s agents and said, ‘We’d sure love to be able to have a free concert on the beach, no charge,’” Deifik said. “I assumed if you wrote a $1 million check to his charity” that would get Springsteen to agree, Deifik said.

“They came back and said, ‘$5 million,’” he said.

In explaining why he felt confident his investment will become a world-class destination, Deifik cited a renewed focus on guest satisfaction, additional amenities, such as the largest indoor TopGolf Swing Suite in North America, and a partnership with Hyatt Hotels’ Unbound Collection.

According to numbers submitted to the state Division of Gaming Enforcement, projections are the casino will generate $384.6 million in net revenue and a gross operating profit of $81.1 million in 2019. Greenstein predicted the casino will take in $292 million in overall gambling revenue in its first year, and $127 million in nongaming revenue.

Greenstein said the resort plans to gain about 10.5 percent of the Atlantic City market, increasing to 12 percent by 2021.

“We believe our numbers are very achievable,” he said.

Including existing debt, monthly service payments, renovations and the purchase price, Deifik paid nearly $279 million to open Ocean Resort. JPMorgan Chase and Luxor Capital Group helped the Deifik family partnership finance the purchase.

The Casino Control Act details certain benchmarks Ocean Resort must satisfy before the commission can grant the property a license, including demonstrating good moral character, honesty and integrity, sufficient financial resources, and casino and business experience.

The DGE included a list of 26 specific financial conditions Ocean Resort must comply with, contingent upon approval of its license application, to ensure the stability of the property.

The Associated Press contributed to this report.

Vacancies common on South Jersey school boards

Tuesday’s meeting was Michelle CarneyRay-Yoder’s last as a member of the Egg Harbor Township school board.

Known to her students as Mrs. CRY, she was elected to the board in November but decided to step down after being appointed superintendent in Somers Point. Now, the district is accepting applications to temporarily fill the vacancy before a new member is elected in November.

Across the region, boards of education are faced with the same predicament year in and year out.

In last year’s general election, voters in Atlantic, Cape May, Cumberland and southern Ocean counties were asked to fill 16 unexpired seats on local school boards, left open due to resignations or in some cases death.

Where have all the school board candidates gone?

By the July 31 deadline, some school districts in South Jersey still lacked sufficient candidates for all the open seats on local boards of education. In other districts, there were just enough candidates, but no competition.

This year, a similar number of unexpired seats are expected to be available as the July 31 deadline to submit a nomination petition for the general election nears. Since last year’s deadline, there have been board vacancies in the Pleasantville, Hammonton, Southern Regional, Dennis Township, Cumberland Regional, Middle Township, Hamilton Township, Buena Regional and Ocean City school districts, to name a few.

Frank Belluscio, executive vice president of the New Jersey School Boards Association, said vacancies don’t necessarily create operational problems for local boards, unless they affect the board coming to a quorum. In that case, he said, the county superintendent can make an appointment.

Belluscio said school boards have 65 days to fill a vacancy, but how they do that is up to them.

“Sometimes a board will go through an application process, an interview process and make a decision. Filling the vacancy by the board requires a majority vote by the remaining board members,” he said.

Belluscio said the organization doesn’t keep numbers on vacancies, but it does get requests for guidance on how to fill them each year.

In May, the Hammonton Board of Education had a vacancy due to the death of board member Sal Velardi. At the time, 2017 board candidate Erica Polito, who lost in November, had applied for the vacancy.

Polito argued that because she was the next highest vote-getter, she should be appointed. Instead, the board appointed Manuel Bermudez, a former board member, to fill the seat.

Board President Sam Mento III said the decision was based on a number of factors, including Bermudez’s ability to negotiate employee contracts. Polito, he said, had a conflict.

Mento, who has served on the board for seven years, including four as president, said he has had to fill two vacancies during his tenure. One of them was due to a member winning a seat on the Town Council.

“It’s more than what place you’re in. … You want to find someone who has the time and commitment to make to the school board,” Mento said.

Belluscio said there are a number of qualifications that make a good board candidate.

“It has to be someone with a sincere interest in the education program, the education of all the students in the district,” he said. “You have to be willing and able to devote the time to board membership. It’s an unpaid position, but there’s a lot of work involved in it.”

He said the position also requires a lot of training and professional development, as well as policymaking.

“You have to recognize the role of the board as a policy-setting body and not an administrative body. You ensure that schools are well run, but you don’t run the schools,” he said.

Egg Harbor Township Board of Education President Pete Castellano said having a vacancy can affect morale, but not necessarily operations. He said that nonetheless, they are looking to fill the vacancy by the July 17 meeting and he expects a large pool of candidates. Resumes are due by July 10, and interviews will take place in open session.

“It’s our belief that with a district our size, we need to have full complement,” he said.

Castellano lamented the loss of CarneyRay-Yoder, especially due to her educational experience.

“In Michelle’s case, she brought a lot of talent to the board, and it’s a big loss for us,” he said.