New Jersey could lose tens of thousands of jobs in the next decade if a constitutional amendment to boost the minimum wage and link further increases to the consumer price index is enacted.
That was the message from a coalition of business groups, which released a report today calculating the damage the amendment could have on the business climate.
The report, conducted by the National Federation of Independent Businesses Research Foundation, was unveiled at a Statehouse press conference in conjunction with the New Jersey Chamber of Commerce, the New Jersey Retail Merchants Association, the New Jersey Farm Bureau and the Common Sense Institute of New Jersey.
"Hiking the minimum wage in a struggling economy will cripple businesses still limping past the recession and actually hurt people that it's intended to help," said Laurie Ehlbeck, New Jersey State Director for NFIB.
If voters approve the amendment in November, the minimum wage here would increase from $7.25 to $8.25 next year. Additional adjustments would follow each year based on inflation.
Tom Bracken, president and CEO of the New Jersey State Chamber of Commerce, said the consumer price index link is particularly troublesome. He said if the wage is changed it should be done in a gradual way — like a counterproposal developed by Gov. Chris Christie — not via unpredictable, automatic increases.
"This is a bad piece of legislation," he said. "I don't think anybody behind me doesn't agree that the minimum wage issue needs to be addressed. But not this way."
If the country sees 4 percent inflation each year, the minimum wage would increase to $8.58 in 2015 and reach $11.74 by 2023, according to NFIB's report. Such an increase would lead to the loss of 31,797 jobs and $4.2 billion in economic output over the next decade, the report said.
Even if there's no inflation, the report says the state would still lose 13,679 jobs and $1.5 billion in economic output by 2023.
The group says only about 44,250 workers in New Jersey make the minimum wage, about 2.5 percent of the workforce. Teenagers make up the largest age bracket within the ranks of minimum wage earners.
James Blake, vice president and chief financial officer of the Morey Organization, which operates amusement piers, water parks, hotels and restaurants in Wildwood and Wildwood Crest, said the impact would expand beyond those making minimum wage because other workers use the wage as a benchmark to set their own higher income levels.
"It's not going to affect just those few numbers that are making the minimum wage, and that's the real concern," he said.
Ryck Suydam, president of the New Jersey Farm Bureau, said an increase in wages also will increase other business costs, such as payroll taxes and workman's compensation premiums.
The report's comes one week after proponents of the minimum wage amendment kicked off a "Raise the Wage" campaign. Backers of the amendment include Democratic U.S. Senate candidates Cory Booker and Sheila Oliver, Democratic gubernatorial nominee Barbara Buono and state Senate President Stephen M. Sweeney.
They noted New Jersey hasn't increased its minimum wage since 2005, and say $7.25 isn't enough for a family to survive on.
Booker said raising the wage is a "moral imperative" that will help the economy.
"It is simply the right thing to do, and it will deliver benefits across our economy," he said last week in a press release. "More money in the pockets of working families and young New Jerseyans means more dollars being spent in our stores and restaurants, and ultimately, that means more hiring."
Early polls suggest a large majority of voters — three-quarters, in some polls — agree with Booker.
Ehlbeck said she hopes voter outreach efforts by her group and its coalition will change those poll numbers and convince voters that the amendment is the wrong way to solve a complex issue.
Reporter Jared Kaltwasser is @JaredKaltwasser on Twitter.
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