Christie conditionally vetoes minimum-wage hike

Posted: January 29, 2013

TRENTON - Voters will likely decide this fall whether to raise the state minimum wage after Gov. Christie rejected a bill that would have bumped the rate to $8.50 within weeks.

In an alternate proposal that accompanied his conditional veto, Christie said Monday that he was willing to raise the hourly wage by $1, but only if it was phased in over two years. That would increase the current rate of $7.25, the federally mandated minimum, to $8.25 by March 2015.

The Democratic bill, which would have increased the rate by $1.25 on March 1 and would have allowed automatic cost-of-living adjustments thereafter, would "jeopardize the economic recovery we all seek," he said.

Democrats, who control both chambers in Trenton, said they would not approve the governor's changes to their bill. They plan to take a different route - a proposed constitutional amendment, asking voters to decide whether to raise the minimum wage to $8.25 in January 2014 and to index it to inflation going forward.

Assembly Speaker Sheila Oliver (D., Essex), who sponsored the bill that Christie shot down, said the governor's compromise was not good enough.

"Any proposal that lacks annual adjustments to ensure wages keep pace with the economy is not a real solution," she said. "Gov. Christie's callous action leaves us no choice but to send this matter to the voters."

To get the question to voters without Christie's signature, a majority in both chambers must approve the constitutional amendment twice in the same legislative session. The Senate and Assembly approved the amendment the first time, as a precaution, in the fall. Leaders plan to put it up for its second vote so the question can be on the Nov. 5 ballot.

"We gave the governor a chance to do the right thing for working people in New Jersey," said Senate President Stephen Sweeney (D., Gloucester), who proposed a constitutional amendment to bypass Christie. "The well-being of working people in this state should not be left to the whims of politicians to decide on every couple of years."

Of the 19 states that pay more than the federally mandated $7.25 an hour, 10 offer annual cost-of-living increases. Colorado, Florida, Ohio, and Nevada have written the increases into their constitutions.

An Inquirer poll conducted in October showed that 76 percent of New Jerseyans supported Sweeney's plan. That backing cut across party lines.

Republicans have accused Sweeney of playing politics by putting the minimum-wage question on the ballot when Christie is up for reelection.

But many residents would have no problem voting for Christie and in favor of the wage increase, said Patrick Murray, political analyst and pollster at Monmouth University. The issue is unlikely to hurt the governor unless he campaigns against the measure, which Murray considered improbable.

Christie's conditional veto allows him to show some support for increasing the wage while not alienating business and industry, which opposes the hike and is a core of the GOP constituency, Murray said.

Supporters of the Democrats' bill scoffed at Christie's suggested changes.

"The last increase [in New Jersey] to $7.25 an hour in 2005 now purchases $6.17 worth of necessities, a 15 percent pay cut," said Gordon MacInnes, president of the left-leaning think tank New Jersey Policy Perspective. "The first-year increase proposed by the governor of 25 cents will be erased by inflation by the time the third year kicks in its 25 cents."

David P. Cooper, an analyst at the Economic Policy Institute in Washington, said that annual cost-of-living increases would ensure that wages keep pace.

"You're going to do away with the problem of inflation eating away at their paychecks," he said.

Christie's concern that a minimum-wage increase would hurt the state's economy is unsupported by research, Cooper said. The most trusted study on the issue showed that past raises had "no noticeable or significant effect on the economy," he said.

The New Jersey Business and Industry Association praised Christie for finding a "reasonable compromise" on the issue.

"Small businesses are struggling in this economy and facing the daunting task of rebuilding after Sandy, and are not in a position to absorb a 17 percent wage increase all at once," said Stefanie Riehl, the group's vice president.

Christie added a sweetener to the bill he sent back to lawmakers: If his minimum-wage proposal is adopted, he would restore cuts to a state program for low-wage workers, something Democrats have urged him to do for years.

But the governor did not offer anything he had not already promised. In his State of the State address last year, Christie said he wanted to restore the state Earned Income Tax Credit to a quarter of the federal Earned Income Tax Credit rate by 2014. He cut the state rate - which allows low-wage workers to keep more of their money at tax time - to 20 percent in 2010.

Contact Joelle Farrell at 856-779-3237 or or on Twitter at @joellefarrell.

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