May 19, 2016
Assembly panel clears bill to raise N.J.’s minimum wage to $15
By Matt Friedman
New Jersey’s march towards a $15 minimum wage took another step forward on Thursday.
Just three days after a state Senate committee advanced the legislation, which would increase the wage from today’s $8.38 to $15 an hour by 2021, the Assembly Labor Committee did the same in a 6-3 party-line vote after a three-hour hearing.
The bill (A15), which is backed by organized labor and fiercely opposed by the business community, faces an inevitable veto by Gov. Chris Christie. Democrats who sponsor the bill anticipate that, and have already drawn up plans to put the increase on the ballot as a constitutional amendment in November 2017 – the same election in which New Jersey voters will choose the next governor.
“Working families have been waiting a long time to make a livable wage for how expensive our state is,” said Assembly Speaker Vincent Prieto, a Democrat from Hudson County who sponsors the measure. “It would help a lot of working families in the state of New Jersey. As the middle class has eroded, we need to put some money in these peoples’ pockets.”
The bill would increase the minimum wage to $10.10 in 2017 and then by at least $1.25 per year until 2021. Under a constitutional amendment passed in 2013, the minimum wage goes up every year if the Consumer Price Index (CPI) increases. Under the new bill, the wage would increase each year by $1, plus the CPI or $1.25- whichever is larger.
Business advocates said the bill would not only cut into their profits but ultimately increase prices for consumers. They said members would be forced to close or leave the state.
Tom Bracken, president of the New Jersey Chamber of Commerce, warned of “the added costs this is going to incur on many people in New Jersey who don’t realize they’re going to be burdened with costs because of this bill.”
“You never impose a fixed cost on businesses over a period of time that does not have a relationship with the top line,” Bracken said. “It can cause financial disaster to the businesses.”
Assemblyman Craig Coughlin, a Democrat from Middlesex County, was skeptical of the business groups’ claims, noting they opposed the last minimum wage increase from $7.25 to $8.25 and then each year based on the CPI, in 2013. He pressed the advocates, asking many businesses they know have closed because of higher minimum wage and whether jobs have been lost in their region.
None could give him hard numbers.
“So we don’t know how many people have lost their jobs. Generally speaking, has employment gone up or gone down?” he said, noting the state has gained jobs since then. “So it hasn’t been such a drag on the economy. And can you tell me how many of your members have left the state?”
Republicans and business advocates, however, said the previous increase was nowhere near as drastic as this one.
“It’s unprecedented, isn’t it?” said Assemblyman Jay Webber, a Republican from Morris County.
In arguing against the measure, Webber, a former GOP state chairman, said New Jersey’s economy remains slow, which is in stark contrast to Christie’s recent statements highlighting the state’s economic growth.
“The committee should know, if you haven’t seen it already, the Department of Labor today just released a report that New Jersey lost 10,800 private sector jobs in the month of April but added 3,300 public sector jobs,” Webber said. “Our economy’s not necessarily thriving, as some would hope … As we cast our vote I just want to emphasize the unprecedented nature and really the radical proposal this is.”
Webber and business advocates also said restaurants would take the opportunity to automate service, including touch screen tablets at restaurant tables.
Assemblyman John Wisniewski, another sponsor of the bill, said businesses were moving towards automation regardless of minimum wage increases.
“The legislation we’re talking about is not going to stop the march of technology. Restaurants, fast food or sit down, are going to try to employ technology to their advantage no matter what we do legislatively,” said Wisniewski, a Democrat from Middlesex County.
Several states and cities around the country have enacted laws to gradually raise the minimum wage to $15. In New York, Gov. Andrew Cuomo recently signed a law to increase it to $15 in New York City and its surrounding areas, and to $12.50 upstate.
The bill needs to pass the full state Senate and Assembly before it reaches Christie’s desk. After that, Democrats will need to pass a proposed constitutional amendment either once with a three-fifths majority, which is unlikely or twice in consecutive legislative years with simple majorities.
Supporters of the minimum wage increase said it would save money by decreasing low wage earners’ reliance on social safety net programs. Webber, however, doubted that those advocates would ever seek cuts to those programs, and said if Democrats succeed in increasing the wage, they’ll be back later seeking to raise it even more. (Senate President Stephen Sweeney, a Democrat who championed the last increase in 2013, indicated at the time that they would never need to increase it again).
“I think people in this room advocating this bill today will come back in a couple years and want more and want more and want more,” Webber said. “Stop telling us it’s going to save the state money when it’s very clear the same advocates are going to come back and keep asking for more and more and more.”