Topic Category: Economic Justice

Standing With Dreamers: DACA Goes to the Supreme Court

Posted on by Erika J Nava

Today, the U.S. Supreme Court will hear oral arguments on the legality of the Trump administration’s attempt to terminate the Deferred Action for Childhood Arrivals (DACA) program. In place since 2012, DACA protects young people without documents from deportation and allows them to work legally in the United States. These arguments will ultimately inform the Court’s decision by no later than July 2020.

What this means for New Jersey:

In New Jersey, nearly 17,000 DACA recipients could lose their protections against deportation.[i] Being stripped of their work permits, driver’s licenses, and other benefits attached to their protected status would all but eliminate their opportunities to earn a living. If this happens, New Jersey as a whole will feel the negative effects both socially and economically.

DACA recipients are important members of our communities and have been so ever since they arrived in the U.S., with the average age of arrivals being just 8 years old.[ii] They have attended and graduated from our public schools, colleges and universities, work alongside us every day at our jobs, and are neighbors and loved ones who make our communities stronger.

DACA recipients also contribute to the economic fabric of the Garden State. Taken as a group, they pay about $183 million in federal taxes and $100 million in state and local taxes each year – amounts that will significantly shrink if the Supreme Court sides with the Trump administration.[iii] This would result in the loss of important revenue at local, state, and federal levels, reducing critical resources to invest in public assets and programs that we all rely on.

Additionally, DACA recipients contribute $718.9 million to New Jersey’s economy, representing an important degree of spending power.[iv] If DACA is terminated, New Jersey residents would spend less in their local economies, hurting local businesses that help our communities thrive.

Finally, DACA recipients pay $15.7 million in mortgage payments and $79.2 million in rental payments each year.[v] If  DACA is terminated, many New Jersey residents would lose their work permits, putting them at risk of losing their jobs and creating a dangerous scenario where they cannot afford to pay basic living costs such as mortgage or rent.

What can New Jersey officials do:

Regardless of whether DACA is rescinded or remains active, New Jersey legislators and the Governor should support and pass proactive immigration policies that will help DACA recipients and their families thrive in New Jersey. Such policies include:

End Notes

[i] United States Citizenship and Immigration Services. Approximate Active DACA Recipients as of June 30, 2019. September 2019. https://www.uscis.gov/sites/default/files/USCIS/Resources/Reports%20and%20Studies/Immigration%20Forms%20Data/Static_files/DACA_Population_Receipts_since_Injunction_Jun_30_2019.pdf

[ii] Svajlenka, Nicole P. What We Know About DACA Recipients, by State. Center for American Progress. September 2019. https://www.americanprogress.org/issues/immigration/news/2019/09/12/474422/know-daca-recipients-state/

[iii] Ibid 2.

[iv] Spending power is measured as household income after federal, state, and local tax contributions; these data are based on household incomes, which are available in the ACS microdata, see Svajlenka, Nicole P. What We Know About DACA Recipients, by State. Center for American Progress. September 2019.

[v] Ibid 2.

[vi] American Civil Liberties Union of Northern California. https://www.aclunc.org/our-work/legislation/trust-act-ab-4

NJPP: Proposal to Roll Back $15 Minimum Wage Cheats Low-Paid Workers

Posted on by Brandon McKoy

Next week, the New Jersey Senate Labor Committee will consider proposals to suspend the phase in of the state’s $15 minimum wage, which was signed into law less than a year ago. Specifically, S3607 would suspend minimum wage increases for at least a year if unemployment increases at all, or if sales and use tax receipts drop at all. In response to this proposal, New Jersey Policy Perspective (NJPP) offers the following statement.

Brandon McKoy, President, New Jersey Policy Perspective:

“This proposal is a huge threat to low-paid workers as it all but guarantees the suspension of New Jersey’s $15 minimum wage. The bill uses broad and arbitrary metrics to pause increases in the minimum wage, cheating workers and families already struggling to make ends meet. With income inequality at an all time high, this bill moves New Jersey in the wrong direction and rolls back one of the most consequential, pro-worker policies in state history less than a year after it was signed into law.

“If lawmakers insist on changing New Jersey’s minimum wage law, they should remove harmful carve outs that disproportionately push women and people of color behind. While most New Jersey workers will get to $15 an hour by 2024, farmworkers and employees of small businesses won’t reach the full minimum wage until several years later. Meanwhile, tipped workers are left earning a subminimum wage in perpetuity. Instead of concocting ways to further delay the economic security of New Jersey’s low-paid workers, lawmakers should focus on policies that boost wages and lift families out of poverty.”

New Jersey Policy Perspective (NJPP) is a nonpartisan think tank that drives policy change to advance economic, social, and racial justice through evidence-based, independent research, analysis, and advocacy. NJPP has long-advocated for increases in New Jersey’s minimum wage.

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Valuing Our Time: Strengthening New Jersey’s Overtime Law

Posted on by Nicole Rodriguez

To read a PDF version of the full report, click here.

A prosperous New Jersey depends on the livelihood of all our workers. In fact, the state economy benefits most when workers are able to earn fair pay for all the hours they work while balancing employment responsibilities with family obligations. However, millions of people across the nation, including hundreds of thousands in New Jersey, are not covered by overtime protections and risk being exploited for their time.[i] This is a direct result of federal overtime laws that have eroded over time—and the lack of a strong state overtime law—where far too many workers are exempt from the right to earn time-and-a-half when they work over 40 hours a week.

Currently, some salaried white-collar workers who earn more than $23,660 a year can be legally denied overtime pay. These exempted workers (1) are considered “highly compensated,” earning at least $455 per week ($23,660 per year), (2) have primary office or non-manual duties, and (3) pass the “duties test,” a complicated test of employees’ tasks and responsibilities that establish them as a bona fide executive, manager, or highly trained professional.[ii] The federal overtime salary threshold for these exempted workers will increase to $35,568 in 2020, but this still falls significantly short of historical standards.

When overtime protections were created in 1938, Congress authorized coverage for most workers. Still, specific groups of white-collar workers were exempted (as outlined above) under the presumption that “bona fide” executives, administrators, and skilled professionals possessed high enough salaries and enough individual bargaining power that they were not at significant risk of exploitation.[iii]

However, the federal salary threshold has severely eroded over the years from not being updated or indexed to inflation or wage growth. Over the past four decades, the percentage of full-time salaried white-collar workers who are guaranteed overtime pay has fallen significantly from 63 in 1975 to less than 7 in 2016.[iv]

The last time the federal salary threshold was meaningfully updated was in 1975, when it was 3 times the federal minimum wage.[v] From the 1940s through the late 1970s, the threshold remained above 2.5 times the minimum wage in all but two years (for those two years, the threshold only fell to 2.3 times the minimum wage).[vi] If this minimum threshold of 2.5 times the minimum wage held constant for New Jersey, it would be $52,000 per year for salaried white-collar workers at the current $10 minimum wage in 2019 and $78,600 in 2024 when the upcoming $15 minimum wage rate takes effect in New Jersey.

In 2016, the U.S. Department of Labor (DOL), under the Obama Administration, attempted to increase the overtime threshold to $47,476 per year for full-time, white-collar salaried workers and tie future automatic increases to the cost of living.[vii] However, a federal judge in Texas blocked the Labor Department from enforcing the higher threshold after it was challenged in court by a coalition of Republican-controlled states and business groups. In response, the U.S. DOL, under the Trump Administration, watered down the 2016 proposal to a $35,568 threshold starting in January 2020. The Trump Administration’s rule only covers one third of the workers that Obama Administration’s DOL rule would have covered, leaving behind 8.2 million workers across the country, including 280,000 in New Jersey.[viii] It also does not include automatic indexing which means the threshold will soon erode and cover far fewer workers.

If New Jersey adopts its own overtime threshold at 2.5 times the minimum wage—$78,000 by 2024—it would restore the standard from the 1940s through the late 1970s. By 2024, when the state minimum wage reaches $15 an hour, 842,000 salaried white-collar workers would gain coverage, representing 38 percent of total salaried workers. Specifically, 315,000 would gain overtime protections for the first time and 528,000 would have strengthened protections, as they would be less likely misclassified as exempt, white-collar workers. Under this threshold, 287,000 more workers would gain new overtime protections than under the Trump administration’s new overtime threshold.

Of these covered 842,000 salaried workers, more than half are women and nearly one third are parents. In addition, nearly half of the workers are Black, Latinx, and Asian and 69 percent are prime working age adults (25–54 years old).

Under the 2.5 times the minimum wage salary threshold, New Jersey workers, their families, and the broader state economy would benefit. For workers, this means that those who were previously required to work extra hours without extra pay would receive the wages they earned, boosting their take home pay. If they choose not to work overtime, workers would have more invaluable time to spend with their families.

For the economy, raising the overtime threshold can stimulate job growth. An employer may find it advantageous to hire more workers instead of paying overtime premiums for extra hours by existing staff.[ix] Also, expanding overtime protections will benefit the state economy as it will increase worker productivity and improve profitability for businesses. Research indicates that being overworked is associated with lower rates of output, and reductions in working hours within some industries has increased productivity.[x] Further, raising the overtime threshold will likely increase pay and therefore strengthen consumer power, which is a proven way to grow an economy from the bottom up. When people have more money in their pockets, they are likely to spend a portion of those increases locally, thereby supporting local businesses and boosting their local economy.

New Jerseyans who work extra hours deserve the right to overtime pay. Regrettably, federal policymakers have not prioritized these workers as overtime protections have drastically eroded. It’s up to state lawmakers to step in to protect New Jersey’s working families from unfair and exploitive labor practices.

End Notes

[i] Economic Policy Institute. Overtime research overview.

[ii] Lexis Nexis. 2011. New Jersey Adopts The Federal Regulations Concerning Exemptions From Overtime Pay Laws; Economic Policy Institute. 2019. Modernizing Massachusetts overtime law is critical to strengthening pay and protecting work-life balance for hundreds of thousands of Massachusetts workers.

[iii] Economic Policy Institute. 2019. EPI comments on proposed changes to Washington state’s overtime rules.

[iv] Economic Policy Institute. 2017. What’s at stake in the states if the 2016 federal raise to the overtime pay threshold is not preserved—and what states can do about it.

[v] Economic Policy Institute. 2019. EPI comments on proposed changes to Washington state’s overtime rules.

[vi] Economic Policy Institute. 2019. EPI comments on proposed changes to Washington state’s overtime rules.

[vii] Economic Policy Institute. 2019. More than eight million workers will be left behind by the Trump overtime proposal.

[viii] Economic Policy Institute analysis of pooled Current Survey Outgoing Rotation microdata, 2024

[ix] Economic Policy Institute. 2019. EPI comments on proposed changes to Washington state’s overtime rules.

[x] Washington Center for Equitable Growth. 2019. Overworked America: The economic causes and consequences of long work hours. Page 22.

NJPP: Improving Economy Leaves Many Behind

Posted on by Brandon McKoy

TRENTON, NJ (September 27, 2019) –  Last year, 832,133 New Jerseyans lived in poverty and struggled to make ends meet, according to new data released yesterday from the U.S. Census Bureau. Residents across the state still face barriers that prevent them from thriving, such as a lack of access to affordable higher education, reliable public transportation, and affordable homes.

While the state’s unemployment rate continues to decline, far too many New Jerseyans are being left out of the state’s economic recovery. The 2018 poverty rate (less than $25,100 a year for a family of four) of 9.5 percent is still higher than New Jersey’s pre-recession poverty rate of 8.7 percent in 2008. Poverty strikes harder for households that have children. In 2018, 13.5 percent of kids in New Jersey, lived in homes that struggled to afford basic needs. This is down from the 2017 child poverty rate of 13.8 percent, but still higher than the pre-recession child poverty rate of 12.1 percent in 2008.

“New Jersey’s economy continues to improve, but not all residents are benefitting from this progress,” said Brandon McKoy, President of New Jersey Policy Perspective (NJPP). “New Jersey remains a tale of two states, as household incomes steadily increase while poverty rates remain higher than pre-Recession levels. Far too many New Jersey families still struggle to pay for basic expenses like food and childcare; more can and must be done to ensure every single New Jerseyan has the opportunity to live a safe and healthy life.”

The new Census data shows that even though the state is growing in important ways, New Jersey’s families are still dealing with harmfully high rates of poverty and widespread income inequality:

  • New Jersey’s poverty rate is 3.6 percentage points lower than the US poverty rate (13.1 percent), and is the 5th lowest poverty rate in the country. 
  • Due to New Jersey’s higher cost of living, measuring poverty using the 200% Federal Poverty Level statistic ($50,200 a year for a family of four) is more appropriate, and shows that 22 percent of New Jerseyans live in real poverty, a total of 1.9 million. This rate is down from 22.9 percent in 2017.
  • The state poverty rate (9.5 percent) declined by 0.5 percentage points over the last year and is at its lowest since 2009, when it was 9.4 percent.
  • The state’s median household income of $81,740 is up from the 2017 figure of $80,088 and is largely similar to both 2017 and 2008, meaning that since the Great Recession  there has been little positive movement in raising middle class living standards for the average New Jerseyan.
  • 4.2 percent of New Jerseyans live in extreme poverty, which means they live below less than half of the poverty line — or about $12,550 a year for a family of four.

The data also show that poverty continues to hit some groups harder:

  • New Jerseyans of color face significant barriers in our state due to housing segregation and broader discrimination. The result is that they are more likely to struggle economically than white New Jerseyans.
  • 16.2 percent of Black New Jerseyans live below the official poverty line ($25,100 for a family of 4) compared with 5.5 percent of whites.
  • 17.1 percent of Latinx and 7.2 percent of Asian Americans live in poverty. This means far too many New Jerseyans of color aren’t sharing in the state’s economic gains or able to fully contribute to the economy and health of their communities.
  • Women face higher poverty rates than men: 10.5 percent compared to 8.4 percent, respectively.

“Lawmakers must prioritize policies that benefit low-income workers, communities of color, and impoverished New Jerseyans who face barriers to success,” McKoy added. “Until we can ensure all New Jerseyans are able to safely and reliably make ends meet, our economy will continue to have trouble growing in a healthy manner.”

# # #

Last Week to Apply for Tuition-Free Community College

Posted on by Erika J Nava

On the heels of a new school year, thousands of New Jersey students are setting off to their first college classes. But for many others, college is simply not an option.

One of the biggest barriers to higher education is its growing cost. The sticker price for a college degree is higher than ever before, and as a result, student loan debt is also at an all time high. Despite New Jersey being one of the wealthiest states in the nation, four in ten residents fall below the ALICE income threshold and are considered “working poor.” For students in these families, the ever-increasing cost of higher education can have a chilling effect on college aspirations, with many choosing instead to work out of high school and save.

Fortunately, New Jersey has taken major steps to ensure all students — regardless of their family’s income or immigration status — have a fair shot at going to college. For students undecided on whether to apply, it’s important to know all of the financial assistance options made available by the state.

Since 2018, New Jersey has invested in making community college tuition-free for students who need the assistance the most. First launched as a pilot in 2018, the Community College Opportunity Grant (CCOG) is now available to students enrolled in all of New Jersey’s eighteen community colleges. The program administers a “last-dollar” grant that closes the gap between tuition costs (including fees) and all other federal and state assistance. Since its inception, 5,424 county college students have received CCOG grants totaling $6.015 million. Of these 5,424 students, 251 are New Jersey DREAMers.

The deadline to apply for New Jersey’s CCOG program is Sunday, September 15, 2019. 

There are two ways to apply: 

  1. Complete the Free Application for Federal Student Aid (FAFSA)to be automatically considered for CCOG tuition assistance.
  2. For students who are undocumented, complete the New Jersey Alternative Financial Aid Application to be considered for state aid and the CCOG.

What are the requirements?

The CCOG is available to students enrolled at any of New Jersey’s eighteen community colleges. Students must be enrolled in at least six credits for the fall and/or spring semesters and have an adjusted gross income below $65,000. More information about the CCOG is available on the New Jersey Higher Education Assistance Authority website.

In Brief: New Jersey’s Teacher Workforce, 2019

Posted on by Mark Weber

To read a PDF version of the report summary, click here.

To read a PDF version of the full report, click here.

The Garden State has, on average, one of the best statewide systems of education in the nation, providing an important foundation for New Jersey’s communities to thrive. At the heart of this system is a workforce tasked with ensuring every student has access to a thorough education that can only be delivered by well-trained, highly qualified teachers.

Maintaining an educator workforce of the highest quality must be a top policy priority for New Jersey’s schools to excel. In addition, the state’s student body deserves a teacher corps that is as diverse as they are, especially given recent research that shows the positive impact of teacher diversity on student achievement. By this metric, New Jersey’s teacher workforce falls short of reflecting the diversity found in classrooms across the state, due in part to a legacy of racism and the challenges created by economic and racial inequities.

Given the crucial role teachers play in educating New Jersey’s children and leaders of tomorrow, it’s surprising that so little attention has been paid, until now, to the characteristics of New Jersey’s workforce. In this report, I take an in-depth look at New Jersey’s teachers: who they are, how they are paid, and how they vary across different types of school districts. My findings are:

  • Teachers in New Jersey make substantially less than similarly educated workers. Further, teacher benefits – pensions and health care – do not appear to make up for the gap in wages.
  • Much of the gap in teacher wages can be explained by the gender wage gap; however, college-educated women still see a decline in pay when they choose to teach.
  • Teacher salaries tend to be lower in less-affluent school districts.
  • New Jersey’s teachers don’t look much like the state’s student population: teachers are overwhelmingly white and female, and there is little indication the state’s teaching workforce is becoming more diverse.

 

Based on these findings, I recommend:

  • New Jersey must offer competitive wages and other compensation to attract qualified workers into teaching.
  • Given the wage gap for teachers, New Jersey should not degrade the value of teacher pensions and benefits, which help to close that gap.
  • The state needs to make teacher compensation competitive in all of its districts, not just the affluent ones.
  • New Jersey needs to take steps to make its teacher workforce more diverse.

 

Teachers Matter – Yet They Are Paid Less Than Similarly Educated Workers

While research shows that neither teachers nor schools can completely close the “opportunity gap” for disadvantaged students, the quality of teachers can and does affect student outcomes. Attracting well-qualified candidates into the teaching profession is critically important if New Jersey is to develop an educated workforce and overall thriving economy in the coming decades.

This report finds that teachers in New Jersey are paid significantly less than similarly educated workers. When controlling for hours and weeks worked, age, and geographic differences in the cost of labor costs, college graduates find they will earn much less if they choose to teach.

Previous research finds little reason to believe that teacher pensions and health care benefits make up for this gap. Any further of erosion of those benefits, however, is likely to make the total compensation gap for teachers even worse.

Part of the wage gap is explained by the gender pay gap; however, women who teach still suffer a significant wage penalty. The returns to earning a master’s degree are also much smaller for teachers than for other workers.

A Demographic Bubble in the Teaching Workforce

Teachers in New Jersey are younger than they were two decades ago: a demographic bubble has moved through the teaching workforce. But another bubble is coming; in two to three decades, many teachers will reach retirement age. This may be the best possible time for the state to strengthen and support its teacher pension system before another wave of teachers moves into retirement.

Teacher Pay Lags in Less-Affluent School Districts

All school districts should be able to compete for the best teacher candidates. Yet teacher pay varies significantly across different school districts. Experienced teachers will make more, on average, in the most affluent school districts. Charter school teachers make significantly less than public district teachers, even adjusting for experience.

Challenges Promoting Teacher Diversity

Recent evidence finds that students of color respond positively when more teachers of color are in front of their classrooms. Yet developing a diverse teaching workforce remains a challenge in New Jersey.

New Jersey’s teachers don’t look much like the state’s students: while 22 percent of students in 2016 were white females, white women made up 66 percent of the teacher workforce. The state should develop strategies – including offering competitive pay to highly-qualified teacher candidates – to bring more workers of color into teaching.

* * *

All of New Jersey’s students deserve a highly qualified and diverse teacher workforce. Yet teacher compensation lags behind other professions, making the recruitment of the best possible teacher candidates an ongoing challenge. The state should implement policies to strengthen teacher pay, protect benefits that help close the teacher wage gap, allow districts to compete fairly for prospective teachers, and promote a diverse teaching workforce.

TANF at 23: Reform is Necessary to Break the Cycle of Poverty

Posted on by Raymond Castro

Temporary Assistance for Needy Families (TANF) turns 23 years old today, but we’re not celebrating. Meant to provide families and children facing deep poverty with critical basic assistance and work supports, TANF has, unfortunately, made matters worse for most families.

Before TANF, funding for assistance was open-ended, meaning that if the state provided funds, the federal government guaranteed to match them at 50 percent. With TANF, the federal government placed a five-year limit on assistance for any family, even if the parent had done everything to find and prepare for a job. It also established major work requirements that force many New Jersey parents to work 40 hours a week without being paid any wages in community agencies that do not offer education and workforce training. The real goal of TANF was to pressure parents to take any job, no matter how low the pay or limited the opportunity.

As a result of these harmful changes in the program, the number of New Jersey families enrolled plummeted from 152,000 at its peak in 1981 to just 16,000 in 2017, a drop of about 90 percent despite the rate of poverty remaining largely the same. Whereas prior to TANF all families living in poverty received some level of assistance, under TANF only about 19 percent of families in poverty receive assistance. The amount of cash assistance for each family also decreased to about 25 percent of the federal poverty level in 2017, guaranteeing that these families would continue to live in deep poverty. 

Sadly, TANF perpetuates both poverty and growing racial inequity in New Jersey. Families of color have been harmed on two fronts: first, generations of discrimination blocked them from opportunities to escape poverty and build wealth, and then the very program meant to lift these families out of poverty blames them for their situation and continues to treat them as second-class citizens.

The good news is that this is starting to change in New Jersey thanks to growing recognition that the adverse effects of poverty on children cost much more to remedy later. Consistent with the state’s recent emphasis on improving maternal and child health, New Jersey increased the TANF basic assistance level by 32 percent in the last two years. This was the largest increase in the nation during that time and the first increase in three decades. At the same time, lawmakers repealed the draconian practice of denying assistance to newborns to punish mothers for having children while on TANF. New Jersey is also starting to place greater emphasis on education and training to lift families out of poverty and has created a model program that provides home visits to support and stabilize the family. 

This is clearly progress, but we need to do more to turn this program around and undo decades of neglect. New Jersey’s basic assistance levels are still lower than those in most states when housing is considered; some parents are penalized for taking good paying jobs; children are not receiving all the child support the federal government allows them; and children are cruelly having their assistance cut off if their parents do not comply with work requirements. 

Most of the TANF program needs to change if New Jersey is going to break the cycle of poverty. This is a tall order, but the legislature and Murphy administration have already shown they will not accept a status quo rooted in racism and intolerance, and that the purpose of government is not to keep people down, but to lift them up. 

New Trump Regulation Puts New Jersey’s Health at Risk

Posted on by Erika J Nava

TRENTON, NJ (August 12, 2019) – The Trump Administration has announced a change to the “public charge” rule, which will make it much more difficult for legal immigrants who use public assistance programs to obtain a green card and thus full citizenship. 

Family income and potential use of health, nutrition, or housing programs will now become a central consideration in whether or not to offer people an opportunity to make their lives in the United States. The change was pre-published earlier today and will go into effect on October 15, 2019. 

According to a November 2018 report by New Jersey Policy Perspective (NJPP), the rule change will prioritize well-off immigrants while penalizing those struggling to make ends meet, threatening the health of 700,000 New Jerseyans who may have to choose between having their basic needs met or having their family separated.

“This is Trump playing piñata politics,” said Erika Nava, NJPP Policy Analyst. “The rule represents a fundamental shift in US immigration policy and threatens the health of hard-working, legal immigrants and mixed-status families. Given New Jersey’s diverse population and high share of immigrant residents, the state’s congressional delegation should take immediate and bold action to tear down Trump’s paperwork wall and protect the health and well-being of Garden State families. Several states are already preparing litigation, and we encourage New Jersey’s Attorney General Gurbir Grewal to join those efforts.”

When proposed last fall, the regulation drew more than 266,000 public comments, overwhelmingly in opposition. New Jersey Policy Perspective opposed the plan, as did pediatricians, hospitals, health insurers, public health officials, and other health leaders.

The final regulation puts admission to the US or applications for a green card at risk if an immigrant adult uses Medicaid, the Supplemental Nutrition Assistance Program (SNAP) or Section 8 rent vouchers (HCV). 

Conservative estimates peg the regulation’s impact at 26 million people nationwide, including one-fourth of children in the US — the vast majority born here — who live in immigrant families. Experts expect unmet health care needs to rise, as well as hunger, child poverty, inadequate or unsafe housing, and other drivers of poor health outcomes. And because immigrants targeted by the Trump proposal are overwhelmingly immigrants of color, experts expect racial health disparities to widen.

New Jersey’s Minimum Wage Rises to $10.00

Posted on by Brandon McKoy

Happy minimum wage day, New Jersey! 

Today, New Jersey’s minimum wage increases to $10.00 an hour. This is the first step on the way to a $15.00 minimum wage and will benefit over half a million workers by increasing their take home pay. Approximately 242,000 workers will get a direct boost in their pay, while an additional 275,000 workers will indirectly benefit as pay scales are adjusted to reflect the new minimum.

The importance of this cannot be overstated as low-paid workers will have greater ability to make ends meet, provide for their families, and participate more fully in their local economies. Businesses will benefit from gaining more customers and New Jersey’s economy will be stronger as a result of this change.

However, farm workers and workers at small businesses won’t be getting an increase until January, and tipped workers are receiving increases that are far too small. There’s still much work to be done to ensure that all workers in New Jersey, no matter what they do, are paid a wage that respects the dignity of their labor and enables them to not just make ends meet, but thrive.

To understand the schedule of the minimum wage increase, check out this blog from earlier in the year where we break down all the ins and outs. 

Driver’s License Expansion Would Pay for Itself and More

Posted on by Erika J Nava

Expanding access to driver’s licenses to all New Jersey residents, regardless of immigration status, would make the state’s roads safer and its economy stronger. The proposal would also pay for itself by bringing in tens of millions of dollars in recurring revenue for the state’s general fund, according to an NJPP analysis of new data from the New Jersey Office of Revenue and Economic Analysis. This is a win-win for drivers, working families, and the state’s finances.

Over the first three years of implementation, driver’s license expansion is projected to generate $21 million in revenue from permit, title, and driver’s license fees. Once fully implemented, new drivers will generate $90 million annually from registration fees, the gas tax, and the sales tax on purchases made at gas stations and motor vehicle and auto parts retailers.[1]

New Jersey is one of the most diverse states in the nation and is home to approximately 484,000 undocumented residents, representing 5.4 percent of the state’s total population. Of the nearly half million undocumented residents, 91.5 percent are of driving age (16 and older). Based on the experiences of the twelve states that have already expanded access to driver’s licenses, NJPP estimates that 222,000 residents would obtain a drivers license during the first three years of implementation. This equates to a 3.5 percent increase in the total number of people in New Jersey with a driver’s license.[2]These new drivers would pay a collective $6 million in permit and license fees over the first three years of implementation.

These drivers are also estimated to purchase 80,000 cars over the same three year period, representing a three percent increase in the number of vehicles registered.[3] Title and plate fees associated with these new vehicles will generate almost $15 million in revenue.

According to NJPP’s analysis of new data from the New Jersey Treasury Department’s Office of Revenue and Economic Analysis, driver’s license expansion would also generate the state tens of millions of dollars in recurring revenue as new drivers register their vehicles and purchase gasoline as well as auto parts and associated retail goods at gas stations and auto part dealers. Using the Treasury’s data on sales taxes collected from gasoline stations and auto parts stores, combined with revenue figures from the petroleum gross receipts and motor fuels tax, NJPP projects that driver’s license expansion would generate $90 million annually in sales and gas tax revenue. Revenue from the gas tax would go directly to the Transportation Trust Fund, which currently collects 41.5 cents per gallon of gas sold. This will make the state’s gas tax collections less volatile and could lower the odds of a future gas tax increase.

In addition to making New Jersey’s roads safer and its economy stronger, expanding access to driver’s licenses would more than pay for itself, generating $90 million in tax revenue every year.

Methodology

Number of Undocumented Immigrants of Driving Age and the Number Who would obtain a driver’s license during the first three years of implementation

There are three estimates used to quantify the number of undocumented immigrants: 452,000 (Center for Migration Studies), 475,000 (Pew Hispanic Center), and 526,000 (Migration Policy Institute). The average of the three estimates is 484,000. There are two estimates for the percent of New Jersey’s undocumented immigrants who are 16 years or older: 90 percent (Center for Migration Studies) and 93 percent (Migration Policy Institute). NJPP took the average of the two numbers (91.5) and multiplied that by average number of undocumented immigrants to get the estimated number of undocumented residents who are of driving age: 444,000. We assume that New Jersey would have a high-end participation rate after three years, similar to Illinois’ rate of 47 percent. We project New Jersey’s rate will be slightly higher at 50 percent given driving is necessary to getting around the state’s sprawling suburbs. The Fiscal Policy Institute (FPI) similarly uses this take up rate in their projections for New York. Thus, we multiply the number of undocumented residents of driving age by the take up rate of 50 percent to project that approximately 222,000 undocumented immigrants who would obtain a driver’s license during the first three years of implementation.

Number of new cars on the road

To analyze new cars on the road after driver’s license expansion, NJPP projects similar automobile purchases and new licenses as FPI projected for New York. Multiplying FPI’s take-up ratio by the number of New Jersey residents that would get a driver’s license during the first three years of implementation projects 80,000 new cars. Note that new cars means new car purchases, not brand new automobiles. For more information, see: Expanding Access to Driver’s Licenses: Getting a License Without Regard to Immigration Status and Expanding Access to Driver’s Licenses: How Many Additional Cars Might Be Purchased? (http://fiscalpolicy.org/wp-content/uploads/2017/01/FPI-Additional-cars-report-2017.pdf)

Numbers for Annual Revenue  

The annual revenue includes: registration fees, gas station and auto part sales tax revenue, and gas tax revenue. The projected 80,000 new cars after three years represents a 2.86 percent increase in registered cars in New Jersey. We multiplied the 2.86 percent increase to the latest figures on gas station and auto part retailer sales tax revenue and to annual gasoline purchases subject to the state gas tax (including petroleum gross receipts and motor fuels).

Revenue from the first three years of implementation

Regardless of a person’s age, first time drivers must pay a $10 dollar permit fee. NJPP multiplied this fee by 222,000, the number of estimated new drivers during the first three years of implementation. We also include revenue associated with title and license plates fees. We multiplied the one time fee of $46.50 times the number of estimated new cars, 80,000. Finally, we multiplied the number of people who would get a driver’s license during the first three years of implementation, 222,000 by $18 the price of a basic driver’s license according to Assembly bill A4743.

End Notes

[1] Does not include the revenue from sales tax of new car purchased.

[2] NJPP divided the estimated number of people who would get a license during the first three by the number of licenced drivers in NJ. Highway Statistics 2016. https://www.fhwa.dot.gov/policyinformation/statistics/2017/dl201.cfm

[3] See Methodology.

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