South Jersey businesses say they plan to change hiring practices and find new ways to remain competitive against other states now that Gov. Phil Murphy has signed into law a requirement for a $15 minimum wage.
Democrat Murphy on Monday signed a bill making New Jersey the fourth state to require a $15 minimum wage. California, Massachusetts, New York and the District of Columbia have adopted similar proposals.
Murphy signed the bill alongside Lt. Gov. Sheila Oliver and Democratic legislative leaders at a raucous event in Elizabeth where advocates cheered, “Ready for 15,” carried banners with their union affiliation and applauded loudly once the bill was signed.
“It is a great day to make some history for New Jersey’s working families,” Murphy said. “We’ve talked long enough about putting New Jersey on a responsible path to $15 an hour minimum wage. Today we start our way on this path.”
The bill raises the current $8.85 minimum wage to $10 an hour in July, then hikes the rate by $1 in subsequent years until it reaches $15 in 2024. After that, wages would increase with the Consumer Price Index.
The time frame is longer for seasonal and farm workers.
“It’s going to make us really rethink our hiring practices,” said Bob’s Gar den Center General Manager Jackie Hudson. “We used to hire a lot of high school students under 18, for their first job, with no experience.”
That will probably not continue at $15 an hour, she said of the Egg Harbor Township operation for both growing and selling flowers and other plants.
The new minimum wage law is just one more thing making it harder to succeed as a small business in New Jersey, Hudson said.
“Now there is also the new law that mandated sick pay for part timers too,” she said of the requirement that became law in October 2018. “It’s a double whammy on businesses.”
She said Bob’s now must pay up to 40 hours of sick time per year to all employees, full time or part time.
“So a 14-year old who makes an orthodontist appointment, we have to pay them to go to the orthodontist,” Hudson said.
She said she is still unclear whether her nursery and retail business will qualify as a seasonal or farm operation, and be allowed more time to transition to the full $15 per hour.
Businesses with fewer than six employees and those that hire seasonal workers won’t have to pay the full $15 an hour until 2026 under the bill.
The minimum wage for tipped workers will rise from $2.13 to $5.13 per hour over a period of five years. It has been 2½ decades since the last tipped wage increase, according to Democrats.
Ducktown Tavern owner John Exadaktilos said his staff is half tipped and half nontipped, and the increases in wages for nontipped workers will definitely hurt him more.
Exadaktilos already pays all his workers more than minimum wage, he said, so he won’t start to feel the pinch until 2021 when the minimum will rise to $12 per hour.
“It’s going to accelerate us raising our prices across the board,” said Exadaktilos, who has announced he is running for City Council. “It’s going to be tough, especially in shore areas where we are up against time. We have nine weeks to make our money, and Mother Nature can ruin a summer.”
Those hiring farm labor would have to pay $12.50 per hour by Jan. 2, 2024, under the bill, after which there would be a review process to proceed further.
Denny Doyle, the manager at the large Hammonton blueberry grower Atlantic Blueberries, said the minimum wage increase for farm workers will affect many of his workers, but not the blueberry pickers for the most part.
“A good picker can make $18 to $20 per hour,” said Doyle, because they are paid for the amount they pick, not by the hour.
But wages the company must pay workers in the packing line, warehouse and on other farm jobs would be affected, he said.
“If this was a federal minimum wage, we wouldn’t have that much of an issue,” said Doyle, “because it would put everyone on an equal playing field.”
New Jersey blueberry growers compete with growers in Georgia, North Carolina, Michigan, Oregon and Washington, he said.
“This is where we are kind of at a disadvantage,” said Doyle. “It is what it is. We have raised our concerns, and we did get a little bit of a longer phasing in. So we’ll make it work.”
Murphy promised to raise the rate as part of his campaign for governor.
The New Jersey Education Association’s elected officers welcomed the new minimum wage law, saying it will boost wages for New Jersey’s lowest paid workers and students.
“NJEA members have long supported raising the minimum wage as a matter of racial, social and economic justice,” said NJEA President Marie Blistan, Vice President Sean M. Spiller and Secretary-Treasurer Steve Beatty in a joint statement Monday.
“We understand that when families have greater economic security, students have greater freedom to focus on their education.”
Republicans and many businesses oppose the higher rate, saying it will raise costs.
New Jersey Business & Industry Association CEO Michele N. Siekerka said she is expecting new legislation to address business concerns, “including an economic analysis that could serve as an off-ramp from this policy in the event of an economic downturn and incentives for the hiring of youth workers who will undoubtedly be challenged to find work at a higher wage.”
She is also seeking help for businesses dependent on Medicaid payments at less than $15 an hour, and for those already tied to contracts they cannot renegotiate.
She also called for legislation to lessen the costs of doing business and living in New Jersey.
The Associated Press contributed to this report.