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Report: New minimum wage in N.J. will affect 12 percent of state's workforce

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A report released Monday morning by New Jersey Policy Perspective, a liberal think tank, says approximately 443,000 low-wage workers, or 12 percent of the state's workforce, will benefit from the increase when it goes into effect on Jan. 1.

The report also says the wage hike will generate over $173 million in new economic growth in 2014 and "support the creation of the equivalent of 1,300 new jobs as businesses expand to meet increased consumer demand."

On Election Day, voters opted to raise the minimum wage by $1 to $8.25 through a constitutional amendment. Business groups have long opposed the measure, which ties future increases to the consumer price index.

"Forget about the stereotypical burger-flipper," NJPP president Gordon MacInnes said in the report's release. "New Jersey's low-wage workers are increasingly adults struggling to gain a foothold in this high-cost state. Raising the minimum wage will provide crucial assistance to these New Jerseyans. We're proud that New Jersey voters overwhelmingly did the right thing for these hundreds of thousands of workers and gave them a much-needed raise."

Of the 443,000 working New Jersey residents which the report claims the hike will have an impact on, a little more than half, or 254,000 workers, are considered to be "directly affected" as they are currently earning between $7.25 and $8.25 per hour. The other 189,000 workers are labeled as "indirectly affected" as they currently earn between $8.25 and $9.25 per hour and are expected to see their wages rise as pay scales are adjusted.

According to the report, 84 percent of all of those affected are at least 20 years old. About 33 percent, or 144,000 affected workers, have attended some college, the report said.

The three industries that will feel the effects of the increase the most are retail, leisure and hospitality and education and healthcare, the report said. Occupations that will experience the most change include service, sales and office and administration support.

The report also says that due to a rise in consumer spending as a result of the wage hike, gross domestic product will also increase by $173.2 million next year. The majority of that extra spending will take place in New Jersey, according to the report.

"New Jersey is taking a long overdue step forward for its hundreds of thousands of low-wage workers and that's certainly a good thing," NJPP deputy director Jon Whiten said. "But there's still a lot of work to do if we want to ensure a wage that all New Jerseyans can actually live on. We intend to keep fighting to provide important economic security for the most vulnerable working New Jerseyans."

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Andrew George

Andrew George

Andrew George covers the Statehouse from NJBIZ's Trenton bureau. Born and raised in N.J., Andrew has also spent time as a reporter in D.C., Texas and Pa. His email is andrewg@njbiz.com.

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