While most small business owners in New Jersey are optimistic about 2018, most are also concerned about the possibility of a minimum wage increase to $15 per hour and rising healthcare costs, according to the New Jersey Business & Industry Association’s 59th Annual Business Outlook Survey.
NJBIA’s report is based on a survey of 1,010 of its members, most of whom represent small businesses with fewer than 25 employees.
The state-wide minimum wage hike remains a hot button topic in Trenton, and the survey shows why: the majority of the business owners in the study said that raising the minimum wage to $15 per hour would hurt their businesses, while 64 percent said that such a hike would force them to raise prices, and 29 percent said that it would result in layoffs. Additionally, 27 percent said that they would reduce their payrolls by reducing work hours.
Gov.-elect Phil Murphy said during his campaign that he wants to see the minimum wage raised to $15 per hour, while state Senate Republicans, such as Senate Minority Leader Tom Kean, publicly said that such a raise is too high. Last week, Bergen County raised the minimum wage of county workers to $15 per hour.
The rising cost of healthcare also is a major concern, as 78 percent of survey respondents said they expect healthcare costs to rise in 2018. The number of businesses owners who believe that they have been negatively impacted by the Affordable Care Act fell to 56 percent from 64 percent in 2016. Generally, 61 percent of respondents said that New Jersey is worse than other states in controlling healthcare costs.
Additionally, 76 percent of respondents said that the state has done nothing to alleviate regulatory burdens on small businesses.
Despite their concerns, a majority of the business owners surveyed said that they expected see a rise in both sales and profits in 2018, a major jump from 2016. Other notable findings included:
“We believe this upward trend is due to the gradual elimination of the estate tax, which we long advocated for to spur small business succession planning and to slow outmigration to tax-friendlier states,” said NJBIA CEO Michele Siekerka. “We expect this trend to continue with the complete repeal of the estate tax on Jan. 1, 2018 and as we make progress on other tax reforms that will make New Jersey more competitive.”
Another positive take away from the survey is that 40 percent of respondents said that they would spend their retirement in New Jersey, up from just 32 percent in 2016.
Workforce development remains an area for vast improvement in the state, as 84 percent of respondents said they do not engage in job programs with their local county vocational school, and 77 percent said they have no connection to their local school district.
“We see this as an opportunity,” said Siekerka. “NJBIA’s Post-Secondary Education Task Force was launched earlier this year to match education programs to private sector jobs and build a brand for New Jersey higher education and career pathways. We are focusing on efforts to make New Jersey more attractive to our future workforce because millennial outmigration continues to impact the business community and our state.”