$15 Minimum Wage on Verge of Becoming Law in New Jersey

Governor says he’ll sign compromise measure approved in Legislature yesterday elevating wages of low-paid workers nearly 70 percent by 2024

Credit: Edwin J. Torres/Governor's Office
Gov. Phil Murphy
Over the objections of Republican lawmakers, the Democratic-controlled Legislature easily approved a measure yesterday that will raise the state’s minimum wage for most workers to $15 over the next five years. The bill now goes to Gov. Phil Murphy, who’s promising to sign it within days.

There was little suspense heading into yesterday’s votes. The legislation was the result of a closely negotiated compromise involving Murphy, a first-term Democrat who campaigned on the wage increase, and Democratic legislative leaders who had been more qualified in their embrace of the concept.

GOP lawmakers pleaded with Democratic sponsors yesterday to abandon their deal with the governor, suggesting the proposed increase could lead to job losses and other unintended consequences. But the sponsors noted that similar concerns were raised in 2013, the last time the state changed its minimum-wage policies and the bill passed both houses easily, 52-25 in the Assembly, 23-16 in the Senate.

“If we make mistakes, we’ll address mistakes, but raising people out of poverty is not a mistake,” said Senate President Steve Sweeney (D-Gloucester).

Murphy responded quickly to the votes on social media, promising he would sign the wage increase Monday.

“Working families can’t wait,” the governor said.

A staged series of wage increases

Under current law, New Jersey’s minimum wage is set every year in response to language in the state constitution requiring annual adjustments based on inflation. That policy led to a slight increase in the wage floor on January 1, from $8.60 to $8.85.

The minimum-wage bill that lawmakers sent to Murphy yesterday would increase the hourly rate for most workers to $10 on July 1, and to $11 on January 1, 2020. It would then increase by $1 each subsequent year until reaching $15 in 2024. From there, the wage could continue to go up in accordance with the constitutional language calling for inflationary adjustments.

The bill creates a separate ramp-up schedule for seasonal workers and those employed by businesses that have five or fewer workers. That group would get to $15 by 2026.

There is also a carveout for farmworkers; they would get to $12.50 by 2024, with an opportunity for state officials to eventually bring them up to $15 by 2027. Workers who earn a tipped wage, including bartenders, waiters and waitresses, would also see their first raise since 1991, with the rate eventually going from $2.13 up to $5.13 over five years.

Worker advocates had pushed for a “clean” minimum-wage bill that didn’t include any carveouts or exemptions.

GOP worried about impact on business and workers, too

Many Republicans argued the ramp-up period included in the final bill was too short and didn’t exempt enough workers, including teenagers. They also raised concerns that businesses could be forced to use more automation or even resort to layoffs.

“We’re going to hurt those who we think we’re actually trying to help,” said Sen. Steve Oroho (R-Sussex).

Republicans also pushed unsuccessfully for an “off-ramp” provision that would allow for the scheduled increases to be suspended in the event of a recession. They also pointed to concerns that the bill would create a “benefits cliff” for some low-income residents who would soon make too much money to qualify for programs, like government-funded childcare assistance.

“We just believe this proposal goes too far, too fast,” said Sen. Declan O’Scanlon (R-Monmouth).

In the Assembly, a motion to table the legislation was easily fought back by majority Democrats.

“It was a lot of hard work that went into this bill and I think it covers everybody in some kind of way with some kind of increase,” said Assemblywoman Cleopatra Tucker (D-Essex).

NJ to join neighboring states

Once the first big wage increase occurs later this year, New Jersey’s minimum wage, will become more competitive with regional neighbors. For example, Connecticut’s minimum hourly rate is $10.10, and in New York, the hourly wage is between $11.00 and $15.00, depending on the size of the business and where it is located. It will also push New Jersey well above Delaware, where the rate is $8.75, and Pennsylvania, which has a minimum wage of $7.25.

Worker advocates have long argued that the minimum wage has not kept up with the state’s high cost of living. They’ve pointed to United Way research suggesting someone needs to make at least $26,640 annually in New Jersey to make ends meet. The current minimum wage translates to roughly $18,400 in annual earnings.

Meanwhile, an NJ Spotlight analysis of federal labor statistics showed that the minimum wage in New Jersey today would need to be $10.31 to have the same purchasing power as in 1968, when it was $1.40.

Sen. Sandra Cunningham (D-Hudson) said she understands Republican concerns, but added “we also have to be realistic about where we’re living and how people are living in this state.”

“I’m telling you, $15 might not mean a lot to most of us,” she added. “But $15 for so many people will make the difference between (affording) medication that someone in the family might need or a pair of sneakers that a child needs for school.”

“We’ve got to give people an opportunity,” she said.

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