New Jersey’s Democratic leaders want to increase the state’s minimum wage 69 percent to $15 an hour. They control the government so it will happen soon, it’s just a question of how.
Their effort amounts to an acknowledgement that New Jersey’s economy, burdened by the worst business tax and regulatory climate in America, isn’t going to be strong enough to meaningfully increase wages on its own anytime soon.
The $15 minimum will help many workers, an estimated million or so, about 60 percent of them working full time. It will help them afford to live in very expensive New Jersey and perhaps reduce their reliance on state and federal aid programs.
It will also hurt many workers, but exactly how many depends on how businesses adjust, so that can’t be realistically estimated. It will also require consumers to pay more to cover the higher costs to businesses.
South Jersey is expected to be especially hard hit since it has the state’s biggest tourism and farming industries. They depend on seasonal workers, many of them foreigners here on work permits to take advantage of earning stronger dollars.
The president of the Cape May County Chamber of Commerce expects businesses to respond to the wage jump by cutting back on employee hours, automating some jobs and eliminating others.
The New Jersey Farm Bureau said a $15 wage would make famers “extremely uncompetitive” with those in other states.
Legislative leaders and Gov. Phil Murphy are expected to negotiate the details of a $15 minimum wage bill soon. Local legislators in South Jersey are wisely making a bipartisan push to spare the area’s businesses and workers from the worst side effects.
The bill proposed by Assembly Speaker Craig Coughlin, D-Middlesex, and supported by Senate President Stephen Sweeney is a good start.
It would increase wages each year for most workers until reaching $15 an hour in 2024. Farm laborers, seasonal workers, teens and employees at businesses with fewer than 10 workers would get more gradual increases that would reach $15 by 2029.
Sweeney also supports a proposal made in May to set the minimum wage for farmworkers at $12.50 per hour, according to a Politico report based on anonymous sources. That would still pay a premium for farm work over neighboring states.
The bill should also take into account whether employers offer their workers health coverage if it wants low-skilled and entry-level employees to use aid programs less. The New Jersey Business & Industry Association said the number of employers offering health coverage plans already fell 7 percent the past two years. The NJBIA is concerned that more employers will choose to drop employee health benefits plans to adjust for the increase in wages.
Some lawmakers and progressive advocacy groups are under the illusion that mandating a higher wage magically increases the economy by that amount. It doesn’t — it just takes existing business revenue and shifts it to wages from other expenses, capital investment and profits.
A $15 minimum will be a welcome raise for those making less who keep their jobs and their hours. Some of those making a little more might get an increase too — or might not and face slower wage gains in the future.
Democrats already are counting the political credits they’ll get from a $15 wage. They should realize they’ll also get the blame for the collateral damage and take the time now to avoid that as much as possible.