New Jersey's approximately 176,000 minimum wage workers will see a bump in their paychecks starting Jan. 1, 2015. The increase of 13 cents per hour is required under an amendment to the state's constitution that requires an automatic annual increase in an attempt to keep pace with inflation.
But how much will it really do?
For minimum wage workers scheduled for 35 hours a week, the increase in pay means an additional $4.55 a week, and $227.50 for the year, assuming that employee works 50 weeks in 2015.
New Jersey Policy Perspective Deputy Director Jon Whiten issued a statement saying that, though the 1.59 percent increase is modest, keeping wages in line with the rate of inflation is an important step to stabilizing the state’s economy.
“Indexing the minimum wage to inflation is one of the simplest, most effective tools that policymakers have to keep low-wage workers from sliding further into poverty every year,” Whiten said in the news release. “While a 13-cent hourly pay bump may not seem like a lot, any increase in the minimum wage carries an outsized significance for the hundreds of thousands of low-wage workers struggling to scrape by in high-cost New Jersey.”
Stefanie A. Riehl, assistant vice president of employment and labor policy at the New Jersey Business & Industry Association, said adding a Consumer Price Index increase to minimum wage policy creates uncertainty for companies, which hinders business.
“(It’s) a huge concern because the CPI is a variable amount and if there’s one thing businesses like, it’s predictability, and the CPI being added to the minimum wage each year in a different amount each year really takes away that predictability,” she said.
Joel Naroff, president of Naroff Economic Advisors, says it’s an issue more complicated than both sides like to admit.
“McDonald’s may have minimum wage workers, but they also have a lot of low-income customers,” he said. “They may be paying more, but they also have a greater demand, so you can’t look at it in a static way.”
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