NJPP report says 400,000 low-wage workers would benefit from minimum wage hike

TRENTON – Later this year voters in New Jersey will have the chance to approve a hike in the state’s minimum hourly wage from $7.25 to $8.25.

Opinions are divided over what the fallout from such a vote would be.

If, as many expect, the measure passes, the state Constitution would be changed, and an automatic cost-of-living provision would ensure future increases.

A report released today by N.J. Policy Perspective estimates that more than 400,000 low-paid workers would reap benefits of the higher wage, that it would spur more than $174 million in economic growth, and help create more than 1,500 new full-time jobs.

“Low-wage jobs are stunting New Jersey’s economic recovery at a time when the state needs more consumer spending and growth,” said Gordon MacInnes, president of New Jersey Policy Perspective, in a release.

“Raising the minimum wage is a smart way to boost consumer spending while delivering much-needed assistance to working families in New Jersey.”

Supporters of an increased minimum wage argue its recipients put that money right back into the economy by purchasing necessities.

However, one of the state’s leading business organizations says this method of boosting the minimum wage is anything but smart.

In a separate interview Wednesday, N.J. Chamber of Commerce President and CEO Thomas Bracken said that the chamber does not oppose a phased-in hike but it strongly opposes a hike that is constitutionally tied to annual cost-of-living increases.

“An annual increase based on the consumer price index is a bad idea for everyone. It makes it difficult for businesses to plan year to year and it could lead to raises in years when the economy is suffering,” said Bracken.

He warned that businesses would have no recourse but to lay off workers, delay hiring new ones, pass the fixed cost on to their customers, and have to deal with pressure for raises by mid- or upper-level workers.

Seventy-one percent of respondents to a Chamber poll issued Wednesday opposed the ballot measure because of the inclusion of the cost-of-living increase.

The NJPP report stated that in New Jersey the state minimum wage remained completely flat for nine years between 1981 and 1990 and then again for eight years between 1992 and 2000.

New York’s minimum wage is set to go above $9 an hour.

The report claims that 67 percent of small businesses nationwide back increased minimum wages, but adds that about two-thirds of the low-wage workers are employed by large companies, not small businesses.

The report also claims that 77 percent of the largest low-wage employers have been profitable for three straight years.

However, several N.J. business groups – testifying earlier against minimum wage hikes – pointed out that this state’s businesses have special problems of trying to stay open or rebuild in a post-Sandy environment.

NJPP report says 400,000 low-wage workers would benefit from minimum wage hike