Raising the minimum wage to $15, even with a phase in, will impact the state’s economic climate and be a direct hit on New Jersey’s small businesses. The current proposal represents an accumulated 79 percent rise in the minimum wage over the phase in period and would increase the cost of doing business at a time when the state is just recovering from the recession with three years of slow and steady growth. The mere mention of a minimum wage increase chills investment and job growth.
Business needs certainty and predictability in order to invest and create jobs. In our most recent Business Outlook Survey, 83 percent of respondents said they are planning wage increases this year of up to 4 percent. This proposal certainly upsets that planning.
The business community has just adapted to the recent constitutionally mandated minimum wage hike, now there is a proposal to go back to the voters just three short years after the constitution was amended on this very same issue. Making law by constitutional amendment is simply not good public policy.
This proposal completes the legislative trifecta. Increasing the minimum wage, coming on the heels of the proposed constitutional amendment mandating pension payments, which no doubt will result in increased taxes on business, and a recent Senate vote on paid sick leave damages New Jersey’s ability to be competitive. We must keep New Jersey competitive and create jobs, not take actions to make us less competitive. In addition, it is our expectation that we will face a renewed effort to pass a millionaire’s tax and a corporate business Tax surcharge later this year, as we have experienced most years in an effort to make up for budget shortfalls. These are all the exact types of policies that are leading to the state’s ongoing out-migration problem.
Before moving on proposals such as these, policymakers should determine the true economic impact of these policies on the business climate and overall economy before moving forward with them.
CEO, NJ Business
& Industry Association
Editor’s note: U.S. Representative Donald Norcross and State Senate President Stephen Sweeney announced February 9 that they would introduce similar bills to gradually raise the state and federal minimum wage to $15 and offer tax breaks to small businesses that go beyond the minimum.
Norcross’ bill in Congress would raise the minimum wage 75 cents in the first year and $1 a year until hitting $15 an hour. Future increases would be tied to the rate of inflation. Sweeney, mentioning the possibility of the governor vetoing any legislative proposal, would amend the state constitution to raise the rate to $9 in the first year and $1 a year until 2024. A vote on amending the constitution would probably not take place until 2017.