New Minimum Wage Deal: A step forward but not a giant leap

Our governor  and legislative leaders have reached an agreement to raise the state’s minimum wage. Gov. Murphy said, “This is a big, big step forward for New Jersey. And it’s responsible.”  The agreement might be “responsible,” but it’s not a “big, big step.”  There are several reasons why. 

The current rate is $8.85 an hour, which for 40 hours a week is equivalent to only $18,408 a year – poverty level in our state. The new rate of $10.00 an hour results in only $20,880 – also poverty level.   

The new $10.00 rate to be implemented in July is still below many other states and cities. For example, In New York City, it is $13.50 per hour for businesses with 10 or fewer employees, and $15.00 per hour for businesses with 11 or more employees. Here are a few other higher 2019 rates: Washington DC: $14.00 (effective July), California $12.00, Massachusetts $12.00, Washington $12.00, Oregon $11.25 (effective July 1), New York (statewide) $11.10, Arizona: $11.00. You have to feel sorry for those in Pennsylvania and 14 other states where the rate is set at the federal minimum level of $7.25 per hour.

The cost-of-living in New Jersey is higher than most states. Most cost-of-living calculators are based on cities, but two available state calculators place NJ as the 5th highest and 10th highest.  ALICE explaines the problem in an  October report A Study of Financial Hardship in New Jersey. “New Jersey is one of the wealthiest states in the nation, yet more than one-third of the state’s households are Asset Limited, Income Constrained, Employed. A New Jersey family of four could make as much as $47,550 a year and still be considered by HUD as “very low-income” and $28,550 be considered “extremely low-income.” New Jersey and three other states share the highest “Low-Income” limits for a family of four.

The ramp-up is too slow. After this year’s $10.00, the plan is to raise the hourly minimum wage by $1 per hour for each succeeding year through 2014. Thus the annual salary in 2020 will be $22,880, in 2021: $24,960, in 2022: $27,040, in 2023: $29,120, and in 2024: $31,200. With our cost-of-living this 2024 salary level is still too low for 2019 and will be even more onerous in 2024.  

Gov. Murphy wanted the $15.00 increase for all workers. Senate President Sweeney and Assembly Speaker Coughlin wanted carve-outs for farmworkers, teen agers and small businesses. These all-too frequent disagreements between the “three men in the room” resulted in inaction throughout 2018. The final deal is that seasonal workers and small business employees won’t reach $15 an hour until 2026. Farm workers will hit $12.50 in 2024, after which state officials in the executive branch could decide whether to keep going to $15 an hour by 2027. This is a much too slow a ramp-up for those who typically earn the least.

The deal is one step forward, but hardly a giant step for New Jersey. Nonetheless, let’s embrace it and look to strengthening it in the coming years. The Legislature hopes to vote on the measure by the end of the month.

Comments (4)

  1. Stephen Hanft

    The consequences of raising the minimum wage to $15:
    http://www.facesof15.com

    Unintended consequences or road to Hell is paved with good intentions:
    https://www.insidersnj.com/unintended-road-hell-paved-good-intentions/

    Reply
    1. Bill Orr (Post author)

      Your first link does not mention who leads it. it seems to be more about teens, and the first item on the video is someone from California – not NJ specific.
      Your second link does not work.

      Reply
  2. Bertin Lefkovic

    When bad compromises with terrible to get something slightly better than terrible, we can resign ourselves to the fact that it was the best that we could get at this time with this legislature, but we should not embrace it and we should use it to argue for a new legislature and a new legislative leadership in 2019.

    Reply
    1. Bill Orr (Post author)

      This is a repeat of our discussion in Blue Jersey’s Facebook page.

      Reply

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