Legislation Increasing Minimum Wage Makes Its Way Through New Jersey Legislature

A bill that would increase New Jersey’s minimum wage came one step closer to becoming law this week. The Senate Labor Committee approved the bill on a 3 to 1 vote on Thursday, March 8, 2012. An Assembly committee approved it in February. The bill would increase the state’s minimum wage to $8.50 per hour, an increase of $1.25 per hour over the current rate. The bill would also tie the minimum wage to inflation, meaning the minimum wage would automatically increase in proportion to the Consumer Price Index.

Democratic lawmakers in New York also want to raise the rate the same as New Jersey, from $7.25 to $8.50 per hour. New Jersey increased its minimum wage from $5.15 to $7.15 in 2005, and again to $7.25 in 2009. The Minimum Wage Advisory Commission, created by state law to track the economic impact of the minimum wage, has reportedly recommended increasing it to $8.50 per hour three times since the last increase. If the bill passes the full Legislature and is signed by the governor, New Jersey will have the third-highest minimum wage in the country, after Washington and Oregon.

A worker earning minimum wage testified to an Assembly committee about her inability to support herself and her family on $7.25 per hour. A representative of a business group testified that the economic recovery remains too uncertain to impose additional costs on employers. According to the Gloucester County Times, approximately 40,000 New Jersey workers currently earn the minimum wage and will directly benefit from the proposed increase. The higher minimum wage amount could mean $2,500 or more in additional annual income for a minimum wage worker. That would also be an additional expense for employers.

Supporters of the bill tout the need of New Jersey workers for additional resources to pay their bills and debts and support their families. Putting more money in the hands of employees, they say, will lead to more money being spent in New Jersey businesses, thereby spurring the economy.

In opposition to the bill, lawmakers, mostly Republican, argue that an increase in the minimum wage imposes an undue burden on businesses at a difficult economic time. They warn that an increase could actually lead to fewer jobs overall, as employers who cannot afford the increased wage rate would instead choose to lay off workers, or even leave the state.

Clearly an increase in the minimum wage is not unprecedented in New Jersey. Both sides of the argument offer valid points. For most small businesses, they must simply wait to see what happens and adapt to any changes that the Legislature makes. Regardless of the specific minimum wage amount, New Jersey offers many significant benefits for businesses that choose to locate here.

The New Jersey business attorneys at Samuel C. Berger, PC offer fixed-fee packages of legal services to businesses and entrepreneurs who want to do business in New York and northern New Jersey. To speak to a member of our skilled legal team, contact us today online or at (212) 380-8117.

More Blog Posts:

Proposed Reduction in Corporate Tax Rate May Not Benefit Many New York Small Businesses, New York & New Jersey Business Lawyer Blog, March 1, 2012
New York Employers Must Verify Their Employees’ Salaries Under 2010 Law, New York & New Jersey Business Lawyer Blog, February 15, 2012
Small Businesses Must Adapt in Order to Make It in a Bad Economy, New York & New Jersey Business Lawyer Blog, January 24, 2012
Photo credit: ‘Too Much Credit’ by Andres Rueda, on Flickr.