NJ Senate Passes $15 Minimum Wage

Study estimates that it will kill more than 30,000 jobs

Supreme Court-Minimum Wage
June 24, 2016

New Jersey could become the third state to adopt a $15 minimum wage backed by labor unions and activists.

The Democratically-controlled state Senate passed a measure on Thursday that would hike the minimum hourly wage from $8.38 an hour to $15—the amount backed by Service Employees International Union’s Fight for 15 campaign—by 2021. Democratic State Senate President Steve Sweeney led the push to increase the minimum wage, which passed 21-18.

"Too many workers in New Jersey are forced to work multiple jobs just to make ends meet. No one working full time should have to live in poverty, or struggle to provide the basic necessities for their family. Raising the minimum wage to $10.10 immediately, and phasing up to $15 over several years is a responsible approach that will lift thousands of people up and grow the middle class while protecting businesses," Sweeney said in a statement to the Washington Free Beacon.

Critics say the new wage rate, which is more than twice as high as the federal minimum of $7.25, threatens to eliminate tens of thousands of jobs in the Garden State. Economists from Trinity University and Miami University estimate that the wage rate could eliminate about 33,500 low wage and entry-level jobs in the state.

Women were more likely to experience job loss than men because of expected job losses in the retail industry, as well as in restaurants.

"The two most affected low-margin industries listed above—retail and accommodation & food services—would also suffer from the most significant impact on employment, with just over half of the losses coming from these two industries alone," the study found. "The policy would also have extremely negative implications for New Jersey’s least skilled workers, with a staggering 91.7 percent of job losses coming from those without a college degree."

The study was commissioned by the Employment Policies Institute, a free market think tank. EPI’s research director Michael Saltsman said that the $15 wage would hurt the working poor the most. He predicted that businesses will turn to automation or reduce worker hours in order to offset higher labor costs.

"New Jersey's minimum wage proposal would hurt the people it's intended to help by putting thousands of less-skilled employees out of work," Saltsman said in a release. "New Jersey's poor need a job, not a raise, and this proposal would put those jobs further out of reach."

New Jersey would be the third state to adopt the $15 wage. California and New York passed the wage rate in March and April, respectively. The campaign has also been successful at the local level. San Francisco passed a $15 wage rate in 2014. Washington, D.C., Mayor Muriel Bowser pledged to sign a bill that would match that hike when it comes to her desk later this summer.

The New Jersey $15 wage passed the Democratic state Assembly in May. It will now head to the desk of Republican Gov. Chris Christie. Christie vetoed a $1 minimum wage increase in 2013. A spokesman for the governor directed the Washington Free Beacon to an April statement in which Christie voiced opposition to the wage.

"You ever see how this garbage happens? Like all of a sudden some nudnik in California goes fifteen bucks, that’s the appropriate wage, and then everybody in the country goes yeah, $15," he told the state Chamber of Commerce. "It’s just insane."

Democrats say that they will bypass Christie and put the wage rate on the November ballot in the event of a veto.

"We are giving Governor Christie a chance to sign this legislation, but if he does not we will take this to the voters," Sweeney said.

Published under: Minimum Wage