BUSINESS & ECONOMY

NJ Policy Perspective President Says Christie’s Minimum Wage Proposal Doesn’t Do Enough

Gov. Chris Christie conditionally vetoed a bill this week that would have raised the state minimum wage. The legislature had previously approved two bills — one that would have raised the minimum wage from $7.25 to $8.50 per hour and another that would ask voters to approve a constitutional amendment raising it to $8.25 per hour. Instead Christie suggested the wage increase $1 over three years. Democrats have criticized the governor’s decision saying the current minimum wage is not livable in the state. NJ Policy Perspective President Gordon MacInnes told NJ Today Senior Correspondent Desirée Taylor that the governor’s plan probably won’t make a significant difference for low wage workers and he would likely support a measure to increase the minimum wage and adjust for inflation.

“When you look at the consequences of the veto, were it to be accepted by the legislature, it really is not going to help people who are working for $7.25 an hour to have to wait for three years before they see the full effect of a $1 raise,” MacInnes said. “They’re basically working for about $6 an hour now in terms of what they can purchase with that minimum wage. Going forward, a quarter an hour increase doesn’t affect very many people.”

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According to MacInnes, about 50,000 to 60,000 people are working for minimum wage in New Jersey. He said the time it takes to receive the increase and taking into account the increased payroll tax and inflation means minimum wage workers are “right where they started.”

Business leaders have argued that small business owners can’t afford a minimum wage increase and that change could lead to layoffs. But MacInnes doesn’t agree. He said business owners always oppose wage increases because it costs them more money. He also said the majority of minimum wage workers are employed by large corporations, not small businesses.

“They need to recognize that people cannot survive on $7.25 an hour in New Jersey. They can’t survive at $8.50, which is what the legislature asked it to go to. But it would represent a noticeable bump in their take home pay,” MacInnes said. “And that is money that would be spent immediately and locally.”

When asked if the disagreement between the governor and legislature is political, MacInnes said politics are always at play, but added that both groups are in agreement that the minimum wage needs to be increased. “They both agree that it should be at least $8.25. So to that extent, there is agreement,” he said. “The question is how do you get there and do you get there in time so that it’s of real help to the people who are barely surviving at that minimum wage? And I think the answer is with the governor’s approach that the results will be insignificant for the workers.”

President of the New Jersey Retail Merchants Association John Holub has said Christie understands that a 17 percent wage increase with ongoing adjustments would have a serious negative effect on the state’s employers. But MacInnes disagrees. “This has been looked at and the evidence is leaning very heavily to the view that an increase in the minimum wage does not reduce employment,” he said. He cited a study conducted in the 1990s when New Jersey raised the minimum wage and Pennsylvania did not. He said the study looked at workers in fast food restaurants who were paid minimum wage and found that the number of jobs in New Jersey increased while the numbers in Pennsylvania did not.

MacInnes said he’s sorry that the minimum wage increase issue will have to be a constitutional amendment. “The fact that it would adjust the minimum wage for inflation, I would be inclined to support it,” he said.