Legislation to gradually increase New Jersey’s minimum wage to $15 an hour by 2021 passed the Labor Committee in the state Assembly last Thursday, following the approval of a companion bill in the Senate Labor Committee earlier in the week.
New Jersey’s actions mirror an increasingly familiar trend in states and local jurisdictions nationwide to raise the wage floor. The basic idea voiced by supporters of such bills is to help people out of poverty during an economic recovery period that has been characterized by anemic wage growth.
Maine voters will decide the fate of a ballot measure in November to raise the minimum wage to $12 per hour by 2020. The governors of both California and New York signed legislation into law last month that will incrementally push up the minimum wage to $15 per hour, and residents in local jurisdictions such as Minneapolis, Cleveland, Linn County in Iowa and Flagstaff, Arizona, are examining measures that would also increase the minimum wage.
The federal minimum wage now stands at $7.25 per hour.
Richard McGrath, spokesman for New Jersey Senate President Steve Sweeney, a chief sponsor of his state’s minimum wage bill, said that if the bill reaches Gov. Chris Christie’s desk and he vetoes it, Sweeney will take the issue to the voters via a constitutional amendment.
Jon Bramnick, the Republican leader of the New Jersey Assembly, argues that putting the $15-per-hour legislation in the constitution is ill-considered and that the higher wage would make it difficult for New Jersey's businesses to compete with other states.
"You don't want to put a minimum wage in the constitution," Bramnick told AMI Newswire, adding that such amendments are difficult to change if problems come up in the future. "That argument is flawed. That's not the purpose of the constitution."
The Republican leader said New Jersey's minimum wage is higher than those in 34 other states. Though it makes sense to increase the minimum wage by a moderate amount, the Democrats' plan could push employers to relocate, he said.
"They've made it an anti-business state," Bramnick said. "They've made it unaffordable."
Agreeing with state Chamber of Commerce officials, he predicted that going to the extreme of pushing up the minimum wage to $15 per hour would result in higher costs of goods and services for consumers, as well as overall job losses.
An April report by the National Employment Law Project, a New York-based group that advocates for the rights of lower-wage workers, states that a record number of municipalities are addressing wage concerns with ordinances.
“Over the past year, an unprecedented number of cities and counties have moved to adopt high local minimum wages,” the report states. “In addition, cities are proposing substantially higher wage levels than in years past.”
Though some economists argue that minimum-wage increases result in fewer available jobs for low-income people, the law project’s report states that, “Overall, the economic evidence indicates that local minimum wages have proven to be effective tools for raising pay and improving job quality without reducing employment or encouraging businesses to leave cities.”
As legislation and ballot measures push up earnings for workers on the poverty line, new economic data may indicate that median- and lower-income workers are seeing their highest pay increases since 2008 or 2009. That’s the bottom line of the numbers released Wednesday by the Federal Reserve Bank of Atlanta.
The Atlanta Fed’s wage-growth tracker found that, as of April, median-income employees saw a 12-month wage increase of 3.4 percent, a post-recession high. The wage-growth tracker examines wage pressure for the same employees over time, factoring out distortions such as when a high-paid older worker retires and a lower-paid younger one takes his or her place, according to the Bloomberg website.
It’s unlikely, however, that new minimum-wage laws alone are responsible for this uptick in wages among median-income earners, or those in the 50th percentile, according to Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities in Washington.
“The national median wage right now is around $17.75, much higher than even the highest state or city minimum wages (D.C.’s is the highest right now at $10.50),” Bernstein said in an email to AMI Newswire.
But he did say that wage gains recorded for those around the 20th percentile would be tied to minimum-wage increases.
Bernstein agreed that moderate increases in the minimum wage, such as those seen in recent years, have demonstrated their intended effect of increasing the pay of lower-income employees without causing a lot of job losses. And that, in turn, has helped to close the wage gap between lower- and higher-wage workers, he said.
“Raising the minimum to $15 an hour, however, is outside the sample of much of the research, so we have to be more humble regarding what to expect in those cases,” Bernstein said.
One early indication shows that the fallout from the “Fight for $15” movements across the country might lead to more job reductions than have been seen in the past. Wendy’s announced this month that in the wake of the rising minimum wages in New York and California, the fast-food chain would be introducing self-serve kiosks at its restaurants — a system that would cut down on labor costs by reducing the number of cashiers.