Backers of N.J. wage increase cheer voters' approval

Posted: November 08, 2013

TRENTON A day after voters said yes to raising the state's minimum wage to $8.25 an hour, along with automatic cost-of-living increases, supporters cheered the measure's passage Wednesday, with Senate President Stephen Sweeney blasting business groups for opposing it.

"This is about helping the working poor make a better life for themselves," Sweeney (D., Gloucester) said Wednesday morning at a news conference in the basement of a church in Trenton, his first stop during a day of celebrating Democratic wins and the party's retaining control of the Legislature.

Business organizations were notifying their members of the constitutional amendment's passage, predicting particular harm to the tourism industry at the Jersey Shore and to food-service industries.

Though business groups said they didn't object to increasing New Jersey's $7.25-an-hour minimum wage but took issue with changing the constitution to include annual increases, Sweeney said Wednesday he was insulted by that argument. He said the state's minimum wage - currently the federal minimum - hadn't been raised in years.

With the measure that passed Tuesday - by 61 percent to 39 percent - "we're not going to have to wait seven years for someone to have a conscience," Sweeney said. The wage "is going to go up when it should go up, and it's in the constitution, where it belongs."

The $1 increase goes into effect Jan. 1. The wage will be reevaluated in September, with yearly increases tied to the Consumer Price Index.

Business groups, which had predicted higher prices and cuts in employee hours as a result of the higher wages, said the impact on businesses wouldn't be immediate.

"The reaction from the business community will probably not take place until after the minimum wage, and after ripple-effect salaries are implemented," said Thomas Bracken, president of the New Jersey Chamber of Commerce. The chamber had lent support to an alternative proposal by Gov. Christie to increase the minimum wage by $1 over three years.

About 429,000 people - or 11 percent of the state's workforce - will be affected by the wage hike, including workers who make up to $9.25 an hour, and would receive future increases, according to New Jersey Policy Perspective.

The effects of the increase will extend to some union contracts, with prevailing-wage formulas tied to the minimum wage, Bracken said.

Over time, the measure "is going to have a very significant impact on the business community of New Jersey," Bracken said. "It's just going to make it more difficult to bring new companies to New Jersey, and keep the companies that are here in New Jersey."

Eighteen states and the District of Columbia have minimum wages higher than the federal level, according to the National Conference on State Legislatures. Like New Jersey, New York state will soon join that group, with a phased-in raise to $9 an hour but without annual indexing.

Pennsylvania's minimum wage is $7.25 an hour.

With the built-in cost-of-living increases, New Jersey "will become increasingly uncompetitive, certainly with Pennsylvania, but with New York, too," said Philip Kirschner, president of the New Jersey Business and Industry Association.

Not all the state's businesses will be affected by the wage increase, Kirschner said. Of his organization's 21,000 company members, 80 percent are higher-wage, higher-profit businesses.

But certain businesses - including the tourism industry, restaurants, companies involved in food distribution, and private security companies - will be "acutely impacted," Kirschner said.

"They're going to have to cope with increased wages, but not necessarily increased sales," Kirschner said. As a result, he said, many will be forced to cut worker hours: "They've already cut their insurance costs and energy costs. That doesn't leave much except wages and benefits."

Other business groups disagree. New Jersey Main Street Alliance, a group representing 1,400 small businesses, had campaigned to raise the minimum wage, saying it would increase consumer spending and boost sales for businesses.

Adam Woods, a Camden business owner who participated in the campaign, said he was thrilled by the amendment's passage.

"It's good because it makes good business sense, which is fine. To me, it's more of a social-justice question," said Woods, who owns a screen printing business with eight employees. He pays a starting wage of $10 an hour, saying $7.25 an hour isn't nearly enough.

By raising the wage, "you're setting a floor of what's acceptable," he said. "To me, paying somebody not enough money to live on is not an acceptable business practice."


mhanna@phillynews.com

609-989-8990

@maddiehanna

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