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Dubious distinction: NJ has highest cost for doing business OP-ED

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In recent weeks, CNBC ranked New Jersey in the bottom third in its Top States for Business survey, which compares all the states taking 10 factors into consideration.

Among those factors, New Jersey is ranked 50th, rock bottom, when it comes to the “cost of doing business,” and 44th for “business friendliness.” That follows a Tax Foundation report last fall that rated New Jersey dead last for its business tax climate. You can be sure the word is out that New Jersey is unwelcoming and expensive for companies large and small, which is a dubious distinction.

The problem isn’t simply negative publicity that discourages new businesses from locating in the Garden State. It’s about keeping companies that are operating here now, open. It is especially a concern for smaller businesses in New Jersey that can no longer afford the extreme increases in labor costs, new laws that make it harder to get the workload done and additional regulatory and paperwork requirements.

Adding to the burden of small New Jersey businesses is a new law creating one of the most generous paid sick leave mandates in the nation. Even the tiniest businesses with just a few employees must comply. It adds additional employer costs and requires more creative juggling of schedules. Understanding the requirements of this new law will be challenging, and the paperwork is time-consuming.  

Pending legislation, if passed, could further weigh upon the backs of small businesses. A bill to raise the minimum wage to $15 an hour could be the death knell for small restaurants or other companies with slim profit margins that hire entry-level and teen workers. It would result in cuts to jobs and hours and mean fewer options for those entering the job market.

Another proposal would require employers to put out employee schedules weeks in advance or face penalties. And, there is a bill to prevent employers from asking a potential employee’s salary history. Both would significantly raise labor costs. 

It is not a business-friendly environment in New Jersey, no. Not friendly to big corporations who saw their state taxes increase this year. And, not friendly to small businesses that are a big part of the state’s employment and economy.

There are more than 860,000 small businesses employing 1.8 million people, which is about half the workers in the state. It’s something lawmakers and Gov. Phil Murphy must consider.

Laurie Ehlbeck is the state director for NFIB in New Jersey, which advocates on behalf of thousands of small and independently owned businesses.

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Write to the Editorial Department at editorial@njbiz.com

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