Raising the Minimum Wage Would Boost New Jersey’s Working Men and Women

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In 2013 New Jerseyans overwhelmingly voted to raise the state’s minimum wage to $8.25 an hour and tie the wage floor to future increases in the cost of living. The increase was a big victory for New Jersey’s low-wage workers, but the current minimum wage of $8.38 an hour – or $17,430 a year if a resident works 40 hours a week every week of the year – still doesn’t cut it in high-cost New Jersey.

• The hourly wage needed for a single adult full-time worker to afford basic needs in New Jersey is at least $13.78, or $28,662 a year – more than one and a half times higher than the current minimum wage.[1]

• In other words, a New Jerseyan working at minimum wage needs to work at least66 hours a week just to avoid destitution and earn enough just to afford basic needs. If that working man or woman also had a spouse and two young children, the adults in the household would need to work at least 146 hours a week at minimum wage just to get by.

• In order to have a more stable household budget, a single adult New Jersey minimum wage worker would need to work at least 94 hours a week– and a family with two young children would need have adults working at least 259 hours a week, or nearly six and a half 40-hour workweeks split between two people.

• New Jersey’s low wage floor isn’t nearly enough for workers to even afford housing in this high-cost state. A Garden State resident would need to work at least 120 hours a week to a 2-bedroom apartment at fair market rent, according to the National Low Income Housing Coalition. In 7 of New Jersey’s counties, the number of hours required would be even higher.[2]

• An economy reliant on low-wage work harms not only workers and their families, but all of us. Unlike the vast majority of American businesses, low-wage employers have for years happily shifted “normal” business costs like health care and full wages to the American taxpayer. The hidden cost of low-wage work in New Jersey – paid for by taxpayers through public assistance and safety net programs to individuals in working families – is estimated at $3.3 billion a year.While the lion’s share is paid by all of the nation’s taxpayers, with federal program costs coming in at $2.6 billion, state taxpayers are chipping in $726 million – a cost that is significantly underestimated, since it does not take into account the state’s share of the Earned Income Tax Credit, which boosts the take-home pay of working families who aren’t paid enough to make ends meet.[3]

Many Workers Would Benefit from a Higher Minimum Wage

Raising New Jersey’s minimum wage to $15 an hour would directly boost the take-home pay of 1 in 3, or 36 percent, of Garden State workers.[4]

New Jersey’s low-wage workers, on the whole, are older and more educated than ever before, due to ongoing shifts in the nature of low-wage work.

An estimated 724,000 New Jerseyans earn less than $11.05 an hour.[5] Of these workers:

87 percent are adults (20 years old and older).

56 percent work full-time (35 hours a week or more). An additional 29 percent work between 20 and 35 hours a week, leaving a small minority – 15 percent – who are working in part-time jobs less than 20 hours a week.

Close to half (44 percent) have attended or graduated from college.

About 1 in 4 (23 percent) are parents, raising about 288,000 children.


Endnotes

[1] United Way of Northern New Jersey, ALICE New Jersey: Study of Financial Hardship.
[2] National Low Income Housing Coalition, Out of Reach 2015.
[3] UC Berkeley Center for Labor Research and Education, The High Public Cost of Low Wages.
[4] National Employment Law Project, The Growing Movement for $15.
[5] New Jersey Policy Perspective, Increasing the Minimum Wage to $10.10: A Win-Win for New Jersey.

2016 State of the Stats: What the Numbers Say About New Jersey’s True Condition

Tomorrow, Gov. Christie will address the legislature and the public for the annual State of the State address. The governor, in New Jersey moonlighting from his primary job as aspiring presidential candidate, will likely portray a mostly sunny picture of the Garden State, particularly his economic record. (See, for example, his recent comments to reporter Matt Arco.) And while there is no doubt that the state’s economy is improving, that doesn’t change three key facts:

* New Jersey is recovering from the depths of the recession at a much slower pace than neighboring states and the rest of the country

* New Jersey’s recovery is uneven, shrinking the middle-class and leaving far too many low- and moderate-income New Jerseyans behind

* New Jersey is failing to invest in the assets proven to grow the economy and create broadly shared prosperity

JOBS AND THE ECONOMY

82%: Share of jobs lost since the start of the recession that New Jersey has recovered, far less than our neighbors in NY (286%) and PA (117%), and the US (152%).

8: New Jersey has the 8th slowest job growth of the states since December 2007

120,000: The number of jobs New Jersey needs to add annually over the next three years to get back to pre-recession levels and keep up with population growth

55,200: The number of jobs New Jersey has added in the past 12 months

36,995: Average number of jobs New Jersey added annually from 2009, when the national economic recovery began, to 2014

$3,495: The decline in inflation-adjusted New Jersey median household income from 2009 to 2014

36%: Amount of average annual income gains between 2010 and 2013 that went to the top 1% of households – those with taxable incomes of about $600,000 or more

18%: Amount of average annual income gains between 2010 and 2013 that went to the bottom 75% of households – those with taxable incomes of about $90,000 or less

2: New Jersey has the 2nd highest share of long-term (six months or more) unemployed of the 50 states (annual statistic from 2014)

16: New Jersey has the 16th highest unemployment rate of the states (as of November 2015)

2: New Jersey has the 2nd highest unemployment rate for veterans of the 50 states, at 7.9% (annual statistic from 2014)

POVERTY AND ECONOMIC HARDSHIP

18%: The increase in the number of New Jerseyans living below the federal poverty level (about $20,000 per year for a family of 3) from 2009 to 2014

18%: The increase in the number of New Jersey children living below the federal poverty level (about $20,000 per year for a family of 3) from 2009 to 2014

15%: The increase in the number of New Jersey children living in deep poverty (defined here as less than 50% of the federal poverty level, or about $10,000 per year for a family of 3) from 2009 to 2014

11%: The increase in the number of New Jerseyans living in true poverty (defined as 200% of the federal poverty level, or about $40,000 per year for a family of 3) from 2009 to 2014

1 in 4, or 24.9%: The number of New Jerseyans who live in true poverty

2: New Jersey had the 2nd highest increase in food stamp recipients of the states since 2010 (as of September 2015)

15.6%: Nearly one in six New Jersey households – or 15.6% – did not have enough money to purchase food at some point last year

2: New Jersey has the second highest foreclosure rate of the states, at 1 in every 553 housing units (as of November 2015) – the national rate is 1 in every 1,268

1 & 2: New Jersey is home to the top two metro areas with the nation’s highest foreclosure rate: Atlantic City at one in every 307 housing units, and Trenton with one in every 346 housing units

3 & 6: 39% of NJ homeowners spend over thirty percent of their income on housing, ranking 3rd highest in the country. 50% of NJ renters spend over thirty percent of their income on housing, ranking 6th highest in the country.

LACK OF INVESTMENT IN KEY ASSETS

Transportation

$0: Amount of money that will soon be in the state’s Transportation Trust Fund – the bank that pays for capital improvements to New Jersey’s roads, bridges and transit systems – for other than debt service

26: Years since New Jersey taxes on motor fuels – the primary source of revenue for the Fund – were increased

$33 million: The amount of direct support to NJ Transit for public transit operations in the current New Jersey budget – far less than the approximately $300 million it was in 2009

Over $2 billion: The amount of dollars designated for new equipment and capital improvements that NJ Transit has spent to cover operating costs in the face of lower state subsidies since 2012

31%: Average increase in NJ Transit fares since 2009

40%: Share of expenses that are covered by New Jersey Transit fares, ranking 9th among similarly structured transit agencies across the country

179: The number of major mechanical failures that prevented start or completion of a New Jersey Transit train ride in 2013 – the national average was 44

Education

$2,150: New Jersey spending on higher education has dropped $2,150 per student – or 22% – from pre-Recession levels

$1,611: As a result, tuition has increased by an average of $1,611 per student – or 14.1% – over the same time

$7.2 billion: The cumulative amount that 2008’s landmark school funding formula for the state’s public schools has been shorted since 2010

PLENTY OF INVESTMENT IN CORPORATIONS AND WEALTHY HOUSEHOLDS

$6.7 billion: The amount of ineffective tax subsidies approved for corporations from 2010-2015 (this does not include awards approved at this week’s Economic Development Authority meeting) – this includes $3.7 billion approved in just the past two calendar years alone

$3.6 billion: The amount of tax cuts that millionaires (households with annual incomes over $1 million) have enjoyed since 2010

$2.3 billion: The amount of tax cuts for businesses over the past five years

FINANCIAL HEALTH

2: New Jersey has the second lowest credit rating of the 50 states

9: Number of credit downgrades from three major ratings agencies since 2010, a new record for New Jersey governors

9: New Jersey has the 9th slowest post-Recession revenue growth of the states (as of the 2nd quarter of 2015, adjusted for inflation)

4: New Jersey has the 4th highest long-term financial liability of the 50 states at $161 billion (combining debt, pension obligations and retiree health benefit obligations)

7: Number of days New Jersey could run operations on reserves – the 5th lowest of the states

$1.8 billion: Amount New Jersey shorted the pension system this year alone