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Where do you think the cost of living is higher, New Jersey or Arkansas? New Jersey or Tennessee? New Jersey or Oklahoma?
It is, of course, New Jersey in all cases. So why is the minimum wage in New Jersey the same as it is in those states?
New Jersey's minimum wage is the same as the federal minimum wage and has been since 1999. Despite a brief period in the early 1990s when New Jersey's minimum wage was the highest in the country, today the state has a law preventing it from rising above the federal minimum wage, which is just $5.15 an hour.
Yet in New Jersey the cost of living is one-third higher than the national average.
A worker making $5.15 an hour, 40 hours a week for a full year grosses $10,712. That's not enough to live on in this state. In fact, someone making that amount in New Jersey would have to perform the superhuman task of working 153 hours a week to afford the average two-bedroom apartment. Clearly, the minimum wage is not the safety net it was intended to be. Minimum wage workers struggle to survive.
So why hasn't the minimum wage in New Jersey been increased? At a recent State Senate hearing on the plight of the working poor, a representative from the New Jersey Business and Industry Association said that the minimum wage should not be increased because wages are based on skills. So people need more training and better skills in order to earn more money, he said. It was his view that raising the minimum wage would be bad for workers because businesses would have to let many go or reduce their hours to make up for the money needed to pay the higher minimum wage.
And yet, corporate profits in the U.S. have grown by 58 percent since the first quarter of 2001 while wage and salary income dropped by almost 2 percent.
Not only that, but if the minimum wage had increased from 1990 to 2000 at the same rate as CEO compensation, it would be $25.50 an hour. So clearly, the money is there to fund an increase in the minimum wage.
A person who works 40 or more hours a week should make enough to put food on the table and have a decent place to live. Some workers, such as food preparers, home health aides and childcare workers-many of whom care for the children of other minimum wage workers-often have exactly the skills their jobs call for. The problem is that these jobs are undervalued in our society. Until the minimum wage is raised in New Jersey, these people will have to continue scraping by.
So, why is New Jersey's minimum wage so low, if it's not lack of money and it's not lack of skill? It's a lack of will-on the part of employers and politicians who too often recast the problem to make it sound like they're already doing all they can to help low-wage workers.
There is more they can do, starting with a pay raise. Raising New Jersey's minimum wage to at least $7.50 an hour would directly affect over 300,000 workers. And the sky wouldn't fall on them or business owners. In fact, when workers are paid more, turnover and absenteeism decrease which reduces costs for employers. Twelve other states and Washington, D.C. have minimum wage rates above the federal level with no adverse affects. Many of them are New Jersey's neighbors and New Jersey should join them. But we shouldn't stop there. The law should also be changed to provide automatic increases each year pegged to the cost of living. That would save low-wage workers from the suffering caused when the price of everything goes up but their wages stay the same.
They've waited too long for help already.
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