The hourly minimum wage in New Jersey goes up by $1 for most low-income workers starting Friday, bringing it to $12.
The mandatory pay increase is the latest installment in the state’s ongoing ramp-up to a $15 hourly minimum wage and comes during the economic downturn triggered by an international pandemic that has hit low-income workers particularly hard.
Other minimum-wage workers in New Jersey, including those employed by farmers and seasonal and small businesses, will also get modest raises as the calendar turns to 2021.
The state’s hourly minimum wage is gradually being increased to $15 for most workers by 2024, under a law enacted by Gov. Phil Murphy in 2019. Additional $1 wage hikes are scheduled to occur annually over the next three years.
New Jersey is among 20 U.S. states where low-income workers will get mandatory raises at the start of 2021, according to Business for a Fair Minimum Wage, a national network of businesses and executives that advocates for fairer pay for low-income workers.
In New Jersey, in addition to raising the baseline minimum hourly wage for most workers to $12, the minimum hourly wage for workers in seasonal and small businesses with fewer than six employees will go from $10.30 to $11.10, according to the 2019 law.
Increase for agricultural workers: 14 cents an hour
Agricultural workers will also see a slight increase, from $10.30 to $10.44 an hour. The minimum wage for so-called tipped workers like waiters, waitresses and bartenders who rely on contributions from customers to bolster their baseline pay, is increasing by $1, from $3.13 to $4.13.
Those making less than $40,000 annually in the U.S. have been hit harder than those in higher income brackets during the coronavirus pandemic, according to a report issued in May by the Federal Reserve.
Kelly Vlahakis-Hanks, president and CEO of ECOS, a cleaning-products company with manufacturing plants in New Jersey and several other states where the minimum wage is rising in 2021, called the pay hikes for low-income workers “more important than ever,” citing the ongoing health crisis.
“When you take care of your team, they take care of your company and customers,” said Vlahakis-Hanks, a member of the Business for a Fair Minimum Wage network.
“We’re very glad to see minimum wage increases in all the states where we manufacture and many others across the country,” she said.
But the ongoing wage ramp-up in New Jersey has fueled concerns among some business groups about the potential impact on companies that already are struggling to survive during the coronavirus pandemic.
The latest annual poll of state employers by the New Jersey Business & Industry Association indicated the public health crisis has triggered widespread earnings losses and led many companies to seek federal or state assistance to get by in recent months.
More than 50% of survey respondents said implementation of the higher hourly wage in New Jersey would affect their operations. To offset the wage increase, 30% of respondents said they were planning to raise their prices and 18% were planning to cut staffing. Another 15% were planning to reduce worker benefits and 10% were shifting to automation.
Bipartisan legislation, introduced several months after Murphy enacted the 2019 minimum-wage law, sought to establish an “off-ramp” that would have allowed for the annual pay increases to be put on hold during times of economic decline.
The bill, which called for the wage hikes to be suspended during prolonged increases in the state unemployment rate and decline in sales-tax receipts, was heavily criticized by worker advocates and never made it out of either house of the Legislature.
Sen. Declan O’Scanlon, a co-sponsor of the “off-ramp” legislation, has called for an emergency session of the Legislature to be convened to put a hold on the latest mandatory wage hikes.
“We all want everyone to have the opportunity to prosper and to make as much money as possible,” said O’Scanlon (R-Monmouth). “But rigid, substantial ongoing increases — with no flexibility or safety valve in the face of economic downturn — were ill advised when enacted and totally counter-productive now.”
“To increase economic stress on businesses desperately struggling to survive, desperately struggling to avoid laying people off, is insanity,” he said.