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Assembly sends minimum wage question to voters

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Few of his members pay the minimum wage, but John Holub says they will feel pressure to hand out raises they may be unable to afford as a result of the bill.
Few of his members pay the minimum wage, but John Holub says they will feel pressure to hand out raises they may be unable to afford as a result of the bill. - (NJBIZ File)

Voters will have the final say on whether New Jersey’s minimum wage goes up.

The Assembly voted Thursday to send a minimum wage referendum to November’s general election ballot. If approved by voters, New Jersey’s minimum wage would increase by one dollar to $8.25 per hour, with automatic annual increases based on changes in the consumer price index.

The Senate approved the referendum last week. Thursday’s action was the final step necessary to create a ballot question.

Speaker Sheila Y. Oliver (D-East Orange) said increasing the minimum wage will help the entire state.

“With the worst recession in a generation still being felt across the nation, we are focused on getting New Jersey’s economy going again while helping working families make ends meet,” Oliver said, in a press release. “Raising the minimum wage helps us do both.”

The vote came over the objections of the state's business organizations.

John Holub, president of the New Jersey Retail Merchants Association, said the timing couldn't be worse.

"In New Jersey we're continuing to recover from the worst economic downturn in 70 years, still recovering from the destruction from Hurricane Sandy, and still have a 9.6 unemployment rate" as of December, he said. "Only in Trenton would someone believe that a solution to all of our challenges and problems is to raise the cost of labor on our employers."

Holub said very few of his members currently pay the minimum wage, but he said raising the pay of the lowest-wage workers will have a ripple effect, putting pressure on employers to raise pay for workers higher on the pay scale.

Phil Kirschner

Phil Kirschner, president of the New Jersey Business and Industry Association, had urged Legislative Democrats to delay the vote and consider the compromise proposal put forth by Gov. Chris Christie when he vetoed a statutory minimum wage measure last month. Christie called on the Legislature to remove the link to the consumer price index, and phase in a $1 minimum wage increase over the course of three years.

Kirschner said compromise is a much better solution than changing the state constitution.

"The constitution is a foundational document, one that establishes our system of state government and secures basic rights," Kirschner said. "Amending the constitution is something that should be done only when there are foundational issues at stake — such as adding a lieutenant governor position, as we did a couple years ago."

Michael Egenton, senior vice president at the New Jersey State Chamber of Commerce, said a minimum wage amendment would set a bad precedent and potentially lead to other contentious issues being placed on the ballot, rather than being decided by the Legislature.

Further, he said, CPI isn't a sufficient metric to gauge the ability of the economy to handle a minimum wage increase in any given year.

"You have to take into account economic factors, how the economy is doing, how businesses are doing, gauge their prospects of hiring people and what their bottom line is," he said. "Those factors are taken into account when you go the legislative route."

In a press release, Senate President Stephen M. Sweeney (D-West Deptford) said he's confident voters will agree that a minimum wage increase is in order.

"The people of New Jersey clearly support a raise in the minimum wage and I look forward to them overwhelmingly approving this ballot question in November," Sweeney said. "They will pick up the ball where Governor Christie dropped it."

Nineteen states have minimum wages higher than the federal minimum of $7.25 per hour, according to Sweeney's office, and 10 of those states have indexed their wages to the CPI.

If approved by voters in November, New Jersey's wage would rise to $8.25 on Jan. 1, 2014, with future annual adjustments based on the CPI. Ironically, the wage could increase even faster if President Barack Obama has his way. Obama on Tuesday called for a federal minimum wage of $9 by 2015.

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