TRENTON — New Jersey's minimum wage is going up by a quarter to $8.85 an hour Jan. 1, the administration of Gov. Phil Murphy said Friday.
The state calculates whether the rate needs to be adjusted each fall by reviewing consumer price index data, according to the Department of Labor and Workforce Development.
The announcement comes as Murphy, a Democrat, is pushing for a $15-an-hour minimum wage.
He said in a statement he applauds the new, higher rate for next year but that it's not enough.
"The current minimum wage is grossly insufficient," he said.
The adjustments are mandated by the state constitution, which requires changing the rate to keep up with inflation. Voters approved a change requiring the increases in an amendment to the state constitution in 2013.
Last year, the rate climbed by 16 cents to the current level of $8.60. The federal minimum wage is $7.25 an hour.
The state labor department says New Jersey is one of eight states to adjust the rate automatically based on living costs.
Despite Murphy's campaign pledge to phase in a $15 minimum wage and agreement from the Democrat-led Legislature, the issue has largely stalled.
One reason for the delay is that lawmakers and the administration are still working out differences over how the wage should apply to tipped and seasonal workers.
Murphy has said that along with legalizing recreational marijuana, he hopes the higher minimum wage can be agreed to this year.
The current wage was set up under a constitutional amendment in 2013 that provided for raising the rate from $7.25 to $8.25, and thereafter according to inflation.
Former Republican Gov. Chris Christie vetoed legislation to phase in a $15 minimum wage. Under that bill, the wage would have risen to $10.10 an hour and reached $15 after five years.
Republicans and industry groups argue the higher rate strains business and could lead to lay-offs or worse. Democrats argue the lower rate isn't enough to get by in costly New Jersey.