TRENTON – In two weeks voters will enter booths statewide and face a decision that will have dramatic consequences.
No, not which gubernatorial lever to pull.
Voters will be asked to answer a simple question: Do you want those at the bottom of the pay scale to earn more money?
The answer to that question will have an impact on economic decisions from corner offices to corner bars for years to come.
To hear forces on each side of the question talk about it, there is more at stake than just raising minimum wages from $7.25 to $8.25 an hour.
The referendum would change the state Constitution, and it would link future wage increases to the cost of living.
Opponents argue that decoupling pay hike decisions from unpredictable future economic factors ties the hands of employers, threatens to slow job growth, and imperils recovery from Superstorm Sandy as well as the 2008 recession.
Supporters counter that putting more money into the pockets of the lowest-paid workers means they will pump it right back into the economy, that they will stimulate economic activity, and that it never is the wrong time to do the right thing, considering the state last hiked the minimum wage in 2005.
“We’re taking a macro economic decision and putting it in the Constitution,’’ said N.J. Chamber of Commerce President and CEO Thomas Bracken. “The full picture of what this entails has not been discussed.’’
The chamber favored a measured approach to increasing the minimum wage, one phased in over three years and not tied to the cost of living. That was what Gov. Chris Christie proposed after vetoing a bill early this year that would have lifted the minimum wage to $8.50.
That veto spurred the Democratic-controlled Legislature to bypass the governor and put the question to the voters.
“Had that (Christie) plan been in effect, the irony is that minimum wage workers would be better off today than with this plan’’ that’s on the ballot, said Philip Kirschner, president of the N.J. Business and Industry Association.
Increases that were more manageable by employers already would have begun, and without the guillotine of the COL looming, opponents say.
“If the last five years has not shown that there are times in the economy that are just so aberrant that you need to pause, take a breath, and take a look at your policies ….” Kirschner said, “what more do you need than the worst recession in 80 years?’’
However, the worst recession in decades is one of the reasons supporters point to for an increase they say is long overdue.
The business groups’ “scare tactics,’’ as state AFL-CIO President Charles Wowkanech calls them, were unfounded the last time a minimum wage hike took effect, and he is confident they will prove unfounded this time.
One of the keys to the discussion, he said, is that what extra money low-wage earners pocket does not go into savings accounts. “They have more money to spend, they buy goods and it actually ends up creating jobs,” Wowkanech said.
His labor group has compiled several studies and economists’ opinions to bolster their claims, including ones that argue that in this post-downturn era it’s the low-wage industries that are growing.
But Kirschner argues that people have a misperception about what industries are going to be affected.
“The Walmarts and the McDonald’s, they are not going to be the ones that are impacted. It really isn’t them, most of them already are at the minimum wage. It really is the mom and pop stores on Main Street and the retail establishments” that will feel the effects, he said.
“I think there are people who would argue that no matter what the situation that it’s never a good time to raise the minimum wage,’’ said Jersey City Mayor Steve Fulop, who joined other Hudson County officials Tuesday to stump for ‘yes’ votes for the referendum on Nov 5.
“It’s never the wrong time to do the right thing,” he said. This sentiment is from the first-term mayor who has instituted a paid sick leave ordinance in his town, the state’s second largest city. He thinks businesses will manage to survive that new mandate as well.
(The movement may be gathering steam: Newark Councilman Anibal Ramos Jr. is introducing a similar ordinance for the state’s largest city.)
“I don’t think that this is going to impact business,’’ Fulop said. “And while I can appreciate the fact they would have their concerns my belief is that those concerns are unwarranted.’’
But business officials such as Bracken emphasize that the wage hike referendum supporters truly don’t understand what it is they are pushing for, that for instance, many don’t realize the state minimum wage will be linked to the federal consumer price index.
Kirschner said that it’s not necessarily jobs that will disappear, but it’s workers’ shifts and hours that will be reduced so that the employer is not taking the hit.
These are the kinds of arguments Wowkenich calls scare tactics.
The way Fulop sees it, the biggest problem for supporters of the wage hike may not be combating those arguments, but rather educating people to the fact the question is even on the ballot and getting them committed to going to the polls.
“The top of the ticket has not run the most effective race, I think that’s fair to say,’’ Fulop said. “My goal on this thing has been to find a way to motivate the core Democratic base. The reality is there hasn’t been a campaign of awareness for this question.’’