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MacInnes and Bracken Debate Minimum Wage Increase

10-30-13

A minimum wage increase will be on the ballot as one of the public questions this Election Day. New Jersey Policy Perspective President Gordon MacInnes and New Jersey State Chamber of Commerce President and CEO Tom Bracken debated the issue of the minimum wage increase with NJ Today Managing Editor Mike Schneider.

Bracken, who opposes passage of the ballot question, said that there are three components to the question. If the increase does get approved by voters, he says it can create issues.

“There are three components to this ballot question. Raising the minimum wage, linking future increases to the national CPI [consumer price index] and putting this, memorializing this into our constitution,” said Bracken. “We have three issues embedded into one and obviously if it’s passed you inherit all three. If it’s not passed two of the three will hopefully go away and I would almost be sure that the legislature will take up in legislative session and increase the minimum wage.”

Bracken also said that the New Jersey Chamber of Commerce is not against increasing the minimum wage and have backed Gov. Chris Christie’s plan to increase it $1 over three years. The issue that the Chamber of Commerce has found is the linkage to the CPI and using the constitution. He said in order for the increase to occur it has to be for the public good and that if the increase does go through it would only benefit about 6 percent of people in the state.

MacInnes, who supports passage of the ballot question, said that the current minimum wage of $7.25 is really worth $6.40. He also said groups shouldn’t oppose the raise if the increase is only going to benefit about 6 percent of the workforce.

If the increase had gone through the legislature and been signed by the governor, MacInnes says it would have been better, but the option Christie came up with wasn’t palatable.

“Yes, it would be better if it went throughout the legislature and were signed but he governor but the compromise that the governor proposed would take so long, it would not address the needs of people who are in desperate need and are working full-time frequently and are not able to survive in New Jersey,” said MacInnes.

Bracken says that the legislature is allowed to change the constitution for the public good and questions if an increase that would benefit about 6 percent of the population would apply. He also said that there can be long-term consequences for New Jersey should the increase go through.

Businesses might not want to implement the increase because they think it would create fewer job opportunities that will still be low paying jobs, according to MacInnes. The state doesn’t need low-paying jobs but ones that will attract highly compensated people.

For Bracken, the best source of new jobs are within the middle market and small businesses within the state that want to expand and are the most logical businesses to have increases. The problem, according to Bracken, is that 93 percent of small businesses oppose the increase because it could force them to raise prices or cut back on employees. But MacInnes says there is no evidence to back that claim up.

“There’s no credible evidence that increasing the minimum wage at this level will decrease employment. There’s just none,” said MacInnes.

Nine states increased their minimum wages in January of 2012 and there haven’t been any differences in job increases and decreases within the states, according to MacInnes. He also said those being affected by the increase are mostly big businesses.

Bracken says a minimum wage increase would cause other wages to go up and that an increase does not to be added into the constitution.