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New Jersey Senate Agrees: Minimum Wage Workers Deserve a Raise

Big news from the Garden State yesterday: the New Jersey Senate voted to raise the minimum wage! Specifically, the Senate approved the bill passed by the Assembly in May, which would raise the state’s minimum wage from $7.25 to $8.50 per hour and adjust it annually to keep pace with the rising cost of living. Once the Assembly approves a technical amendment to the bill to change the effective date (expected to occur in mid-December), it will be sent to Governor Christie.  

This is an important step forward for hundreds of thousands of minimum wage workers in New Jersey, most of whom are women. Today, full-time minimum wage earnings of $14,500 a year leave a mom with two children thousands of dollars below the federal poverty line. Raising New Jersey’s minimum wage to $8.50 per hour would mean an extra $2,500 per year, which could make a real difference for women and families struggling to make ends meet.

New Jersey’s economy would also get a boost from a minimum wage increase. Low-wage workers are likely to spend additional income quickly, so more dollars would flow into local businesses – and that means more jobs. The Economic Policy Institute estimates that raising the minimum wage to $8.50 per hour would generate $278 million in economic activity in New Jersey in the first year following the increase, creating close to 2,500 jobs.

With such important benefits – and no evidence to support contrary claims that a minimum wage increase would cost jobs – one might assume that Governor Christie would be eager to sign the bill as soon as it gets to his desk. Unfortunately, the governor has said in the past that he would not support a bill that has the minimum wage rise with the cost of living – even though the cost of living in New Jersey is one of the highest in the country.

Indexing the minimum wage for inflation is essential to help ensure that the buying power of the minimum wage does not erode as it has over the past decades; indeed, if the minimum wage had kept pace with inflation since the 1960s, it would be more than $10.60 per hour today. Perhaps that’s why a recent poll showed 76 percent of New Jerseyans support both raising the state’s minimum wage and tying the wage to inflation.

If Governor Christie won’t sign a minimum wage increase into law, the legislature has a back-up plan: an amendment to the state constitution to raise the wage to $8.25 per hour and index it for inflation. If passed by the Senate and the Assembly, the amendment could be placed on ballot in November 2013 and adopted by popular vote without any action by the governor. (The state Senate also passed the proposed amendment yesterday; a vote is expected in the Assembly in December.) But Governor Christie should not stand in the way of a measure that has such clear benefits for his state and widespread support from his constituents. Let’s hope a constitutional amendment is not necessary to raise New Jersey’s minimum wage. 

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