Minimum Wage Increase Clears Senate — Tuesday, February 15, 2005



Increase New Jersey's minimum wage to $6.15 per hour on Oct. 1, and to $7.15 per hour on Oct. 1, 2006, and create an advisory group to recommend cost-of-living increases thereafter.

1,600 full-time employees and 10,200 part-timers earn minimum wage, according to the Department of Labor. An additional 241,100 workers earn between $5.15 and $7.15 per hour.

State minimum wage raised to $5.05 per hour in 1992, and to the current $5.15 per hour in 1999.

Paying people a decent wage would help them afford basic necessities in a state where the cost of living tops the national average by one-third.

Small businesses would hire fewer people, cut workers' hours or raise prices to make up for mandatory increases in labor costs.

Trenton — A measure raising the minimum wage by $2 over the next two years advanced Monday despite warnings from business owners that additional labor costs could force them to close.

The Senate approved the measure Monday afternoon. Earlier, the Assembly Labor Committee heard hours of testimony before voting to move the bill forward to the full Assembly.

In his State of the State address in January, acting Governor Codey called on lawmakers to raise the minimum wage, saying that 12 other states already require that their workers be paid more, even though none matches New Jersey's high cost of living.

"New Jersey should be a leader, not a laggard," Codey said.

Under the measure, the minimum wage would increase to $6.15 per hour, from the current $5.15, on Oct. 1, and to $7.15 on Oct. 1, 2006.

The bill also would create an advisory group to recommend cost-of-living increases in the minimum wage thereafter.

Some 1,600 full-time employees and 10,200 part-timers earn minimum wage, according to the Department of Labor. An additional 241,100 workers now earn between $5.15 and $7.15 per hour.

Mary Ellen Marino of the Mercer Alliance to End Homelessness called the affirmative votes on the legislation "Valentines to the poor," while Staci Berger of New Jersey Citizen Action said an adult earning $5.15 an hour would need to work three jobs to afford a no-frills two-bedroom apartment at the statewide average of $1,200 per month. Both groups advocate raising the wage to $7.50 per hour with automatic cost-of-living increases built in.

But business owners such as William Eubanks, president and CEO of Eubanks Enterprises of Cherry Hill, which owns 29 Kentucky Fried Chicken restaurants in New Jersey, Pennsylvania and Delaware, said if New Jersey hikes its minimum wage he'll do less business here and more in neighboring states.

Eubanks estimated his cost of compliance at $200,000, and said he'd be forced to increase the wages of all his employees making between $5.15 and $7.15 per hour.

"If this increase is passed by the Legislature and signed by the governor, I will close all my low- and mid-volume stores - those stores that are on the borderline of making enough profit to keep them open today," he told the Assembly Labor panel. "Six stores, with 20 to 25 employees each, will be shuttered immediately."

Opponents of the legislation argue that most minimum-wage earners are teenagers or seasonal workers, not those living on their own or supporting families. According to the Employment Policies Institute, 16 percent of those making $5.15 an hour are single earners with children, and those workers have access to supplemental income through tax credits.

Some opponents called on legislators to enact a training or seasonal wage to lessen the impact on seasonal businesses or those reliant on a young labor force.

But Susan Bottino of New Jersey Policy Perspective told the Labor Committee, "As far as I know, basing someone's pay on their age or gender is illegal in this country and using it as an excuse not to raise the minimum wage is offensive."

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