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NJ’s Minimum-Wage Workers Won’t Be Getting Automatic Increase This Year

As inflation rate stays put, freeze takes effect – pleasing business owners, vexing advocates who say $8.38 per hour is woefully inadequate

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New Jersey voters in 2013 voted to hike the state’s minimum wage and also seemed to guarantee regular annual increases by linking the hourly rate to inflation.

The first automatic increase took effect at the beginning of this year, pushing the minimum wage up to $8.38 from $8.25.

But after a rare August-to-August stretch that saw no inflation – the state Department of Labor and Workforce Development actually tracked a slight decrease in the Consumer Price Index – the minimum wage will stay the same in New Jersey in 2016.

That means the state’s lowest-wage workers will have to work for another full year at the same hourly rate, one that advocates say is already woefully too low for a high-cost state like New Jersey.

But business leaders are hailing the frozen minimum wage as a matter of fairness, saying it’s something that should also give them more certainty, at least when it comes to wages, for another 12 months.

Before the 2013 referendum question was approved, New Jersey’s minimum wage mirrored the federal hourly rate of $7.25.

But after winning widespread acceptance from voters, the minimum wage went up by a full $1 to $8.25 on Jan. 1, 2014.

That made New Jersey one of 29 states with an hourly rate higher than the federal minimum wage, according to U.S. Department of Labor statistics.

Democrats who control the state Legislature touted approval of the minimum wage hike as a big victory for the state’s working class, especially after the automatic increase on Jan. 1, 2015.

Linkage to the Consumer Price Index was a key to the push for a referendum on the issue, since Gov. Chris Christie, a Republican, had vetoed legislation that sought to do the same.

Christie’s spokespeople declined comment yesterday on the $8.38 hourly rate remaining in place for 2016. Also declining comment through a spokesman yesterday was Senate President Stephen Sweeney (D-Gloucester).

Sweeney was one of the leading proponents of the push to link the minimum wage to inflation via a constitutional amendment. With Christie’s second term in office set to end in early 2018, Sweeney considered a likely Democratic candidate for governor in 2017.

New push for bigger increase?

But advocates for the state’s lowest-wage earners said yesterday that the frozen minimum wage for 2016 should revive interest in the issue, especially after a recent announcement from New York Gov. Andrew Cuomo that he will be pushing to boost the minimum wage in his state to $15.

“Let’s be clear: Poorly paid people can’t get by on New Jersey’s minimum wage,” said Jon Whiten, deputy director of New Jersey Policy Perspective, a Trenton-based liberal think tank that supported the 2013 referendum question.

“Our leaders should stop acting as if the 2013 increase was enough,” Whiten said. “The fact that so many New Jerseyans must keep scraping by on less than $20,000 a year underscores the utter inadequacy of the state minimum wage.”

Analilia Mejia, executive director of New Jersey Working Families, issued a challenge to potential candidates looking to replace Christie, asking “who will be the first aspiring governor of New Jersey” to match Cuomo’s $15 minimum-wage proposal?

“No worker can support themselves, much less sustain a family, on $8.38 an hour,” she said.

Michael Egenton, senior vice president of the New Jersey Chamber of Commerce, said many employers in New Jersey already pay their workers more than minimum wage, so it’s unclear exactly how many businesses the frozen wage will directly impact.

He also said employers crave certainty, so knowing the minimum-wage will stay the same for another year is a good thing.

“We keep saying that buzzword over and over again,” Egenton said. “If you give an employer certainty, they can make preparations.”

Michele Siekerka, president of the New Jersey Business & Industry Association, stressed that businesses in New Jersey are still slowly but steadily recovering from the last recession. So a pause in annual minimum-wage increases comes at a good time, she said, with the unemployment rate dropping to 5.7 percent in August, a month that also saw the state’s employers hire an additional 13,600 workers.

“It’s an opportunity for businesses to catch their breath from increases in the cost of doing business,” Siekerka said.

She also said it’s only fair that the minimum-wage stays flat after a year that saw no inflation because that’s the way the referendum question was designed.

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