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Business groups set for battle as minimum wage hearings get under way

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New Jersey's business groups are boosting their efforts to stop a bill that would increase the state minimum wage to $8.50 an hour and link annual adjustments to the Consumer Price Index.

While Senate President Stephen M. Sweeney (D-West Deptford) had proposed to accomplish those goals through a constitutional amendment — which would evade the looming veto pen of Gov. Chris Christie, but face even more intense opposition from the state's business associations — he recently agreed to support the Assembly-approved measure that will be considered in the Senate Budget and Appropriations Committee today.

Kathleen A. Davis, executive vice president and chief operating officer of the Chamber of Commerce Southern New Jersey, said the legislative provision to automatically increase the minimum wage every year according to inflation is "still very troublesome to us," though she said "having the opportunity to have our thoughts and concerns weighed is certainly a better way to go than a 'yes or no' question going to voters to make this issue part of our constitution."

"This is a very complex and far-reaching issue, so I think that going through the legislative process provides more opportunities for input from the business community in terms of what this increase will mean to them, especially to small businesses," Davis said.

Davis said a January 2012 survey of the chamber's members found the top reason why businesses oppose the measure is the impact it would have on consumer prices, as any increase in labor costs would get passed on to customers and make a company's products and services less competitive.

Some business groups have noted that the shore's tourism industry was hit hard by Hurricane Sandy, and argue the minimum wage increase would amount do a double blow, but Samia Bahsoun, a steering committee member at the small business group Main Street Alliance, made the opposite point, saying the extra income in low-wage workers' pockets would translate into new spending and help the economy.

"So the ripple effect of just this additional dollar… would tremendously impact small biz, and we know that we all need it here on the Jersey Shore," she said.

According to the New Jersey Time to Care Coalition, which supports the bill sponsored by Assembly Speaker Sheila Y. Oliver (D-East Orange) and other Assembly members, if the minimum wage had kept pace with inflation since 1968, it would currently be more than $10 an hour, compared to the $7.25 an hour rate it is today.

Oliver said lawmakers are capable of helping businesses and low-wage workers at the same time.

"We are going to be there for those business owners," she said. "We are going to be promulgating a variety of initiatives to help support them, and I do not believe that in order to support businesses that have been ravaged by Sandy it means that we cannot elevate the minimum wage for low income workers in this state."

Oliver challenged her fellow legislators to pass the bill, noting that the state has in recent years provided numerous incentives to businesses and arguing "it is time to turn attention to the people that make business prosperous, and it is the people that work within those businesses."

To voice its concerns to the Legislature, the chamber has joined a coalition of 11 state business groups led by the New Jersey Business & Industry Association to testify against the bill at today's Senate committee hearing.

In her prepared testimony, Stefanie Riehl, NJBIA assistant vice president, said the coalition is especially concerned about the proposed minimum wage increase after witnessing Hurricane Sandy's impact on businesses, and hearing that "many of our employers are still focusing on making payroll and how they can make their workers whole following the losses they've incurred."

"Thousands of employers have a long and difficult task in rebuilding their businesses and getting people back to work. Just getting back to where they were is going to be hard enough," Riehl said in a statement Friday. "Lawmakers shouldn't raise the bar even higher."

Contributing: Jared Kaltwasser

Write to the Editorial Department at editorial@njbiz.com

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