N.J. Minimum Wage Constitutional Amendment

1. www.eanj.org
N.J. Minimum Wage Constitutional
Amendment
John J. Sarno, Esq.
Employers Association of New Jersey
1

2. Question #2 Public
2

3. National Public Opinion
3
76% of Americans would vote to raise
minimum wage to $9/hr.
with automatic CPI
Increases
58% Republicans 43%
76% Independents 71%
91% Democrats 91%
Gallup (Nov. 2013)

4. Campaign Spending
(Approximate)4
Proponents - $1.3 million
Opponents - $1 million

5. Typical Statements
5
“Increasing New Jersey’s minimum wage will give
nearly half a million working New Jerseyans a crucial
leg up while pumping hundreds of millions of dollars
into the state’s economy.”
Gordon Mac Innes
New Jersey Policy Perspective
“If this is passed, the minimum wage working poor
gets helped. But it would be detrimental to the
business community and impede our state to come
out of its fiscal problems”
Thomas Bracken
NJ Chamber of Commerce

6. The Vote
6
61% - Yes
39% - No
Voter turnout – 39.6%

7. Where it Stands Now
7
Federal Minimum Wage (current) - $7.25
N.J. Minimum Wage (current) - $7.25
N.J. Minimum Wage (Jan 1, 2014) - $8.25

8. As of 2013
8
18 states and DC higher than federal standard
23 states (including NJ) same
4 states below federal standard
5 states with no minimum wage
Washington has highest minimum wage
$9.19/hr.

9. Fair Labor Standards Act
9
25 cents/hr. – 1938
United States v. Darby
U.S. Supreme Court (1941)
Federal minimum wage applicable to
employers that engage in interstate commerce

10. Cost of Living Increases
10
Beginning Sept. 30, 2014 and on Sept. 30th of
each year thereafter
Consumer Price Index (CPI-W) calculated by
the federal government for Northeast
Metropolitan Region
Effective each January 1st

11. Consumer Price Index
11

12. State Minimum Wage – Constitutional
Amendment
12
Florida
Colorado
Nevada
Ohio
New Jersey

13. State Minimum Wage Increase -
CPI13
Arizona Nevada
Colorado Ohio
Florida Vermont
Missouri Washington
Montana New Jersey

14. Setting Minimum Wage Through
Legislation
14
Last raised in 2005 to meet federal standard
of $7.25

15. N.J. Minimum Wage Advisory
Commission
15
“New Jersey should set the minimum wage at
$8.25 per hour immediately and should
subsequently provide an automatic cost-of-
living increase of the minimum wage, indexed
to the Consumer Price Index”
2007

16. Minimum Wage and Inflation
16
If minimum wage had kept up with inflation it would be
$17/hr in 2013 – N.Y. Times (Nov. 11, 2013)

17. Commission Members
17
David J. Socolow Chairman Ex-Officio Commissioner, NJ Department of Labor and Workforce Development
Charles N. Hall, Jr. State AFL-CIO Rep. 12/22/2009 President, Local 108, RWDSU/UFCW
Philip Kirschner Business Rep. 1/12/2010 President, NJ Business and Industry Association *
Eric E. Richard State AFL-CIO Rep. 12/22/2009 Legislative Director, State AFL-CIO Rep
JoAnn Trezza Business Rep. 1/12/2010 VP, Human Resources, Arrow Group Industries
* Dissenting

18. Legislative Action and Governor’s
Veto18
2012 – Legislature passed bill consistent with
Commission’s recommendation
2013 – Conditional veto Phase-in $1/hr increase
over 3 years with no automatic cost of living
increases

19. Hourly Wages By County
19
5 highest: Hunterdon, Somerset, Morris,
Burlington, Bergen
5 lowest: Atlantic, Camden, Salem, Essex, Cape
May
Highest percentage of “Yes” voters – Camden,
Essex, Hudson
Highest percentage of “No” votes – Cumberland,
Cape May, Monmouth

20. Immediate Impact – January 1,
201420
Full-time worker, 40hr/week - $15,080/year
2014 - $17,160/year
Office of Legislative Services predicts 2.8% in
2015 - $480.50/year

21. NJ Minimum Wage Workers (16-years
and older) - 2013
21
Office of Legislative Services:
41,000 Earn minimum wage
58,000 earn between $7.25 - $8.00
No informative available - $8.00 – $8.25
N.J. Policy Perspective:
241,000 earning between $7.25 – $8.25
188,000 earning between $8.25 - $9.25

22. Amendment’s Applicability
22
Every employer (including public employers)
If federal minimum wage is higher than state
wage, state wage automatically increases
Does not amend N.J. Wage and Hour Law
57,000 paid less than minimum wage (not subject
to minimum wage) – Learners apprecentices,
students, trainees

23. Industries with Most Minimum Wage
Workers
23
Leisure and Hospitality (includes restaurants
and food service)
Retail
Other Services
Fast – Food Industry
Median hours/week - 30
Median wage/hr -
$8.69
52% of families of front-line,
fast-food workers rely on public
assistance - $7 billion/year

24. Minimum Wage and Other
Wages24
Wage Compression
John is hired in 2013 at $7.72/hr.
Expected increases 2014 $7.95/hr.
2015 $8.19/hr.
Jane is hired in 2014 at $8.25/hr.
Do you raise John’s wage?

25. Impact on State Average Weekly Wage
(SAWW)
25
UI, STD and FLI Benefits
Eligibility is based on 20 base weeks (20-times
the minimum wage)
2013 base week is $145/week
2014 - $165/week
Higher benefits and employer taxes over time

26. Overall Economic Impact
26
David Card and Alan Krueger from Princeton
University measured impact of $4.25 - $5.05
increase in 1992 (18%)
Based on 410 fast-food restaurants in South
Jersey
At the time, $5.05 was highest in the country

27. 27
High-wage stores (paying $5/hr or more)
Low-wage stores (paying the $4.25/hr minimum
wage)
Employment “contracted” at high-wage stores due
to worsening economy (0.5% per store)
No impact on free and reduced-price meals to
employees
Some evidence of slight price increases

28. 28
No evidence that part-time workers replaced
full-time workers
Employment “increased” at low-wage stores
Increased wage may have induced older, more
skilled employees to take fast food jobs
Result may be specific to fast-food industry

29. Don’t Forget
29
Please take the time to fill out EANJ’s Wage
Surveys

30. Minimum Wage and Public
Assistance30
Supplemental Nutrition Assistance – eligibility at 30/
hrs/week at minimum wage (A parent with 2 children
making minimum wage receives $276/month)
NJ FamilyCare – Parents with incomes up to $31,322
for family of four; Adults without children $15,282
Housing Assistance – Low-income individuals whose
housing costs exceed 30% of household income
Collectively worth $18.62/hr if eligible for all maximum
assistance – Cato Institute

31. 31
Thank You
Questions?