Report: Over 400,000 New Jersey Workers and State’s Economy Stand to Benefit from Ballot Proposal Raising the State’s Minimum Wage

For Immediate Release: May 16, 2013

Contact: Jon Whiten, NJPP, or 609-393-1145 ext 15

Over 400,000 low-paid workers would benefit from a ballot measure that would raise New Jersey’s minimum wage by one dollar to $8.25 per hour and index the minimum wage to rise automatically with the cost of living, according to a new report released today by New Jersey Policy Perspective. The report finds that this wage increase would generate more than $174 million in new economic growth and support the creation of the equivalent of over 1,500 new full-time jobs as businesses expand to meet increased consumer demand.

According to the report, which analyzed U.S. Census Bureau data, adults working full-time jobs represent the vast majority of workers who will benefit from the minimum wage increase: 83 percent of workers who’d be affected are adults over the age of 20, 77 percent work more than 20 hours per week and 38 percent have at least some college education.

“Low-wage jobs are stunting New Jersey’s economic recovery at a time when the state needs more consumer spending and growth,” said Gordon MacInnes, president of New Jersey Policy Perspective. “Raising the minimum wage is a smart way to boost consumer spending while delivering much-needed assistance to working families in New Jersey.”

The report shows that many of the state’s lowest-paid workers rely on minimum wage jobs to support their families. More than 231,000 children across New Jersey have a parent who would benefit from raising the state’s minimum wage to $8.25, and the average parent affected by this increase contributes more than 40 percent of the family’s total income.

At $7.25 per hour, New Jersey’s current minimum wage is tied with the federal level and has not increased in nearly four years. Nineteen states across the U.S. have already raised their minimum wage above $7.25 per hour, and earlier this year New York Gov. Andrew Cuomo signed into law a measure that will raise New York’s minimum wage to $9.00 per hour.

Because New Jersey does not currently provide for regular minimum wage increases to keep pace with the cost of living, the state minimum wage remained completely flat for nine years between 1981 and 1990 and then again for eight years between 1992 and 2000. If New Jersey’s minimum wage had kept pace with the rising cost of living since the late 1960s, it would equal $10.70 per hour today. To prevent further wage erosion, tying the minimum wage to rising costs of living is essential.

“At a time when corporate profits have hit record levels, low-paid workers are seeing wages remain flat even as the cost of living continues to rise,” said Christine Owens, executive director of the National Employment Law Project. “Raising the minimum wage will deliver critically-needed relief to working families while addressing the rising inequality that is undermining the economic recovery.”

A poll released by Rutgers-Eagleton in April showed that 76 percent of voters in New Jersey support raising the minimum wage to $8.25 per hour. A national poll released by Small Business Majority in April showed that 67 percent of small business owners across the U.S. support raising the minimum wage and indexing it to rise automatically with the cost of living; the same poll showed 65 percent of small business owners supporting minimum wage increases as measures to boost consumer demand.

That finding is not all that surprising, given that nearly two-thirds of all low-wage workers in the U.S. are employed by large companies – not small businesses. Moreover, 77 percent of the largest low-wage employers have been profitable every year for the past three years and remain in strong financial condition in the post-recession recovery, according to a 2012 study by the National Employment Law Project.

A large body of research shows that raising the minimum wage is an effective way to boost the incomes of low-paid workers without reducing employment. A groundbreaking 1994 study by David Card and Alan Krueger, current chair of the White House Council of Economic Advisers, found that an increase in New Jersey’s minimum wage did not reduce employment among fast-food restaurants. These findings have been confirmed by 15 years of economic research, including a 2010 study published in the Review of Economics and Statistics that analyzed data from more than 500 counties and found that minimum wage increases did not cost jobs. Another recent study published in April 2011 in the journal Industrial Relations found that even during times of high unemployment, minimum wage increases did not lead to job loss.

One Comment

  1. skip3house May 22, 2013 Reply

    All that one dollar effort for nothing.
    Next time bring it up to $20/hr.

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