At the heart of Gov. Phil Murphy’s plan to address New Jersey’s steep fiscal problems is a need to improve the state economy. Yesterday the administration’s top labor official detailed a number of new programs that would take on that task by improving career training and addressing long-term unemployment.
But as Department of Labor and Workforce Development Commissioner Robert Asaro-Angelo explained to lawmakers yesterday, he’s also facing internal problems, trying to bolster a department that was left “hollowed out” by prior administrations.
“We inherited a situation where vital positions went unfilled, the morale of our employees was low, and available federal funds were left on the table,” Asaro-Angelo said.
Meanwhile, Asaro-Angelo said the administration is putting more emphasis on efforts to cultivate apprenticeship opportunities and to improve the skills of employees of small- and medium-sized businesses as part of its broader push to drive economic growth.
Since taking over the department in January, he said the Murphy administration has improved the average call times at family leave and temporary disability centers by 60 percent. Yet even with these improvements, Republicans warned the commissioner yesterday that Murphy’s plan to hike the state’s minimum wage to $15 could cut into the governor’s overall goal of generating more growth.
Murphy, a Democrat, has ambitious plans to address some of the state’s biggest fiscal problems, including the grossly underfunded public-employee pension system, and the longstanding underinvestment in K-12 public education. To do so, his $37.4 billion budget for the 2019 fiscal year calls for several tax increases, but Murphy is also counting on a significant amount of economic expansion, which would grow state revenues without having to adjust any tax rates.
The latest state jobs numbers are due to be released later this week; figures put out by Asaro-Angelo’s department last month showed New Jersey’s unemployment rate was holding steady at 4.6 percent. While that is much lower than it stood during the depth of the Great Recession, the unemployment rate in April was also higher than the national unemployment rate of 4.1 percent. Asaro-Angelo said yesterday the size of the state’s long-term unemployed population — meaning those who have been out of work for at least 27 weeks — is the third highest among U.S. states.
“Though we are seeing improvements, we must be realistic,” the commissioner told members of the Senate Budget and Appropriations Committee during a hearing in the State House. “There is much work to be done to return New Jersey’s long-term unemployed to work, decrease pay inequities, and increase the skills of our workers to meet the demands of an increasingly and specialized workforce,” he said.
Part of the department’s effort to boost the state’s employment rolls involves encouraging more New Jersey residents to get started in high-skilled careers that require apprenticeship training. Earlier this year, Murphy announced the establishment of the New Jersey Apprenticeship Network, funded with $10 million out of $34.5 million that’s being set aside for workforce development programs. Asaro-Angelo highlighted that initiative during his appearance in Trenton yesterday.
“This program creates a forward-thinking, new path for state residents to enter high-skilled careers through paid apprenticeships that may include college credit,” he said.
Asaro-Angelo also said $9.5 million is being used to launch the New Jersey Career Network, which emphasizes job coaching and other services for the long-term unemployed. Murphy had focused heavily on the issue of long-term unemployment several years ago, before he was an official candidate for governor.
Another $9 million will be invested in an “upskill” program that will be used to provide grants to small- and medium-sized businesses in New Jersey to help them train workers to qualify for unfilled jobs, the commissioner.
“These are just some of the planned investments we believe would bring skills training and professional development to the residents of our state,” Asaro-Angelo said.
But the establishment of a $15 minimum wage is also one of Murphy’s key economic initiatives, and his budget plan expects the current minimum hourly rate of $8.60 to increase to $11 at some point during the 2019 fiscal year, which begins July 1.
Asaro-Angelo told lawmakers yesterday that he supports Murphy’s push for a higher minimum wage, but several Republicans questioned whether forcing the $15 rate on New Jersey businesses would lead them to cut costs by slashing their employee rolls. That would run counter to Murphy’s overall goal of growing the state economy, said Sen. Declan O’Scanlon (R-Monmouth), who also brought up specific concerns about the minimum wage that were raised earlier this year by executives from manufacturing companies who testified before a special legislative manufacturing caucus.
“Aren’t we being contradictory? The same employers who want to stay here, who employ a lot of folks here and want to employ more, to an employer, they are terrified of a $15 minimum wage,” O’Scanlon said. “Almost to an employer, (they) said we’re going to make up for this by employing less people, and looking for ways to accelerate automation, et cetera.”
But Asaro-Angelo said studies of other places that have adopted a $15 minimum wage don’t suggest there’s any evidence to justify those concerns. He also said many employers are desperately seeking workers right now, and later during the hearing, he talked about how the higher wage could become a net benefit for the state economy.
“I just think it’s a no-brainer, especially in New Jersey, where we have so many urban areas and small businesses that are going to greatly benefit from the increased purchasing power of folks at the low end of wage scale,” he said. “I think that’s overlooked.”
“Folks who are making minimum wage now, that increase is going to go right back into the pockets of the folks where they spend their money,” he said.