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N. Jersey Democrat wants to raise minimum wage to $8.50 an hour, among nation's highest
Joelle Farrell

January 20, 2012
View the Original Article

While Gov. Christie is pitching tax cuts for all in 2012, Assembly Speaker Sheila Oliver (D., Essex) wants to give a boost to the 40,000 New Jerseyans who make the $7.25 hourly minimum wage.

Oliver wants to bump the minimum rate to $8.50 and tie it to the consumer price index, which measures the cost of living.

"At a time when some presidential candidates are saying poor people should be demanding jobs and not welfare, this proposal is about livable wages for the lowest-income earners," she said during the Assembly's reorganization in Trenton this week. "Quite simply, we should all support economic stimulus, increased consumer spending."

Republicans, in the minority in both chambers of the Legislature, worry that raising the rate will put pressure on already strained employers.

"No matter how well-intentioned, job creators can't just absorb this because people in Trenton tell them to," said Senate Minority Leader Tom Kean Jr. (R., Union).

Christie, a Republican, said Thursday he would consider raising the minimum wage but first wanted to ensure the state was moving toward a drop in its 9 percent unemployment rate. A job that pays $7.25 an hour is better than no job, he told a town-hall meeting in Irvington, according to Bloomberg News.

"We've got to make sure we get more people employed, not just more money for people who are already working."

Raising the minimum wage can lead some employers to hire fewer workers or offer employees fewer hours, some economic studies show.

But Philip Harvey, an economist and lawyer who teaches at Rutgers School of Law-Camden said the effect was slight and tended to hit only the youngest workers, students, and other part-timers who typically live at home or attend college.

"A lot of ink has been spilled over whether it's a slight increase or a slight decrease in employment, but the truth is that all of the research shows there's very little negative effect if any," he said. "You don't need to worry that it's a job killer."

The benefits are significant for most low-wage earners, adults 20 and older who on average bring in nearly 50 percent of their household income, said David P. Cooper, an analyst at the Economic Policy Institute in Washington, which advocates for low- and middle-income workers.

Most of those in New Jersey and nationwide who make the minimum wage are white women, according to demographic information.

"Someone making the federal minimum wage makes less than $15,000 a year, which is officially below the poverty line for a family of three, and just barely above it for a single person," Cooper said. "Wage growth over the last several years has been pretty flat. . . . Raising the floor is really the only thing that's going to raise wages for workers."

New Jersey, like Pennsylvania and 30 other states, pays what the federal government requires. Congress raised the federal minimum to $7.25 from $5.85 in 2009. Until 2008, it had remained at $5.15 for more than a decade. (Where federal and state standards differ, the higher wage applies.)

The minimum wage hasn't kept pace with inflation, causing its actual value to erode sharply, Cooper said. That's one reason for widening income inequality, he said.

The minimum wage went farthest in 1968, when in New Jersey it was $1.40 an hour, which would be more than $9 an hour today, Cooper said.

Living on $15,000 a year before taxes can be difficult in New Jersey, one of the richest states, with some of the highest property taxes. Its median household income is $68,000, according to 2010 census estimates.

Krystal Johnson, 27, said she moved back with her parents in Camden in September when she lost a day-care job that paid $8 an hour and had to take a part-time, minimum-wage job at a suburban KFC.

Johnson, an aspiring nursing student, said she had her own apartment in the city, but soon realized she couldn't keep up with her bills. "The ends weren't meeting."

Now her father drives her to her shifts at work, and she helps pay for gas. The rest of her money goes toward clothes, a cellphone bill, and the occasional evening out.

"No extras," she said.

There are 68,000 workers in New Jersey's total hourly workforce of 1.7 million - including restaurant employees who rely on tips - who make less than the federal minimum in wages, according to the state Department of Labor and Workforce Development.

Eighteen states and the District of Columbia offer minimum wages higher than the federal standard. Eight states raised their minimum wages on Jan. 1, including Washington, the first state to raise its minimum wage above $9.

Those and two other states peg their minimum-wage rate to inflation, which is what Oliver wants to do in New Jersey.

Although state Senate President Stephen Sweeney (D., Gloucester) supports the bill, Oliver won't get her bill into law without a fight.

The New Jersey Minimum Wage Advisory Commission, which has reported annually to the governor and the Legislature since 2007, recommended in December keeping the minimum wage at $7.25 in 2012 to protect the state's "fragile" economic recovery.

And a group called the Employment Policies Institute has begun hitting reporters' in boxes, offering an economic expert to debunk the studies Oliver is relying on.

The group, which adopted the same acronym as the Economic Policy Institute, is financially backed by Richard Berman, whose lobbying and political consulting firm, Berman & Co., serves clients in the fast-food, alcohol, and tobacco industries.

The state minimum wage commission, which voted, 3-2, against raising the minimum wage, said an increase could put the state at a competitive disadvantage with Pennsylvania, New York, and Delaware, where the minimum is $7.25.

Oliver, along with other Democrats, chastised Christie this week for his proposal to cut income taxes 10 percent across the board. She said it would be a boon to higher-income residents but would provide mere scraps for the middle class and poor.