N.J. considers raising minimum wage

Posted: February 23, 2012

TRENTON - After hearing tales of hardship from both low-wage workers and struggling businesses on Thursday, a panel of New Jersey lawmakers decided it was time to give a boost to those who earn the minimum wage.

The Assembly Labor Committee voted 6-2 to approve a bill that would raise the minimum hourly wage to $8.50, a $1.25 increase that would give New Jersey one of the highest rates in the nation. The bill would peg the wage to inflation, allowing future increases to occur automatically.

The full Assembly can now vote on the measure. The Senate Labor committee had not yet scheduled a hearing on the bill.

Gov. Christie, who based his Tuesday budget address on a projected 7 percent increase in state revenue in the next fiscal year, has said he would consider raising the wage. But he wants Democrats, who control both legislative chambers, to include him in discussion of the issue, rather than to pass the bill and expect him to sign it.

"So far, the Democrats have just decided to operate on their own," Christie said at a news conference on Wednesday. "We've seen this before - when they operate on their own, things get vetoed."

Assembly Speaker Sheila Oliver (D., Essex), said she would work with Christie and GOP lawmakers to get the bill signed into law.

Lakisha Williams, 29, of Newark, who works between 32 and 40 hours a week providing wheelchair assistance at Newark Liberty International Airport, said that a higher wage would help pay living expenses for herself and her 12-year-old daughter, I'Janiyah McCombs.

"Sometimes I have to cry and say, 'Mommy is doing the best that she can,' " Williams, a single mother, told reporters after she testified at the hearing. Williams has worked at the airport for eight years without a raise and said she relies on Medicaid and food and rent assistance.

Business owners argued at the hearing that increasing the wage during the economy's wobbly recovery could lead to worker layoffs and bankruptcies.

"If the money doesn't come in to support payroll, we have to make cuts," said Kathleen Davis, executive vice president and chief operating officer of the Chamber of Commerce of Southern New Jersey.

Nearly 40,000 New Jerseyans earn $7.25 an hour, the federally mandated minimum wage, according to the state. Eighteen states and the District of Columbia offer minimum wages higher than the federal standard. Eight states raised their minimum wages on Jan. 1; New York and Connecticut are considering increases.

At Thursday's hearing, Joe Olivo, 46, an owner of Perfect Printing in Moorestown, said that the proposed 17 percent minimum-wage increase would force him to raise what he pays experienced workers as well. Olivo said he laid off nine employees when the economy tanked in 2008 and 2009, and he worried that he might have to lay off more if his costs rose.

"It's easy to demonize someone who's against" increasing wages for the working poor, he told reporters after he testified before the Assembly committee. "It may end up hurting the employees it's trying to help."

Economists disagree on how a change in the minimum wage affects employment. Some have found that an increase can force employers to cut staff or hours, but the majority of the research shows there's "very little negative effect, if any," Philip Harvey, an economist and lawyer who teaches at Rutgers School of Law-Camden said in an earlier interview.

Since those earning extra dollars are likely to spend them quickly, some economists argue that raising the wage is an economic boon.

The pay increase "would be consumed just by the gas prices alone getting back and forth to work," said Assemblyman Nelson Albano, (D., Cape May), who supports the measure.

The bill would increase the rate to $8.50 beginning July 1.

Assemblyman Ronald Dancer (R., Ocean), the only member who abstained from voting, asked Davis if it would aid businesses to have the higher wage phased in.

"It would help to mitigate the impact," she said.

Minimum wage has not kept pace with inflation since the 1960s, according to experts. If it had, the federal minimum would be at least $10.40 an hour, Anne Thompson, a policy analyst at the National Employment Law Project, told the committee.

Congress raised the federal minimum to $7.25 from $5.85 in 2009. Until 2008, it had been $5.15 for more than a decade. (Where federal and state standards differ, the higher wage applies.)

The New Jersey Minimum Wage Advisory Commission, which reports annually to the governor and Legislature, has recommended preserving the current minimum wage in 2012 in order not to jeopardize the state's "fragile" economic recovery.

The next voting session for the full Assembly is set for March 15.

Contact staff writer Joelle Farrell at jfarrell@phillynews.com, 856-779-3237 or @joellefarrell on Twitter.

Staff writer Matt Katz contributed to this article.

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