Opponents of Minimum Wage Increase Say It Would Hurt Businesses

October 3, 2013 | Politics
A coalition of business leaders say a minimum wage increase would hurt small business owners and not boost the economy much.

By Senior Correspondent Desirée Taylor
NJ Today

A coalition of business leaders used the backdrop of boardwalk businesses damaged by the Seaside Heights fire to make their point — it’s not the right time or the right way to raise the minimum wage.

“This amendment surely is coming at the worst time in my business career. I lost half the business during the storm, about two-thirds of the business during the storm. And I lost the other third in the fire,” said Seaside Park business owner Bobby Stewart.

“We are not against addressing the minimum wage question and also we are not against helping the working poor. We are only against the mechanism with which this is proposed,” said New Jersey State Chamber of Commerce President and CEO Tom Bracken.

That mechanism is a ballot question calling for a constitutional amendment to raise the minimum wage from $7.25 to $8.25 with subsequent yearly increases linked to the consumer price index. It’s those automatic increases that some business owners say they can’t afford.

“As a small business owner, I know that by automatically increasing my expenses every year, it makes it more difficult for me to grow and hire more employees and increase the benefits of those that I employ,” said President and CEO of Perfect Printing Joe Olivo.

“Ninety-three percent of small business owners oppose raising the minimum wage. They oppose it not because they’re greedy, not because they don’t care about their workers. They oppose it because they cannot afford it,” said National Federation of Independent Businesses State Director Laurie Ehlbeck. “And they’re right. According to a study conducted by the NFIB Research Foundation earlier this year, ballot question number two will destroy as many as 31,000 jobs in New Jersey.”

But a coalition of supporters paints a different picture. In a statement, Gordon MacGinnis of New Jersey Policy Perspective says, “minimum wage increases don’t lead to job losses. What raising the minimum wage will do, however, is give a better shot at success to hundreds of thousands of New Jersey’s low-wage workers — and provide a modest bump in economic activity to boot.”

That’s because supporters say these workers will spend their extra money in the local economy out of necessity. But Bracken disagrees.

“This will probably bring to the table maybe $300 million a year. So it’s not a significant boost to our economy,” Bracken said.

But opponents know they’re facing an uphill battle because recent polls show the majority of respondents, regardless of their party affiliation, support the constitutional amendment to increase the minimum wage. And those voters also didn’t buy the argument that a wage increase could cost thousands of jobs.

Both sides are out in full force presenting their argument to voters before election day, which is just over a month away.