In New Jersey, the Minimum Wage Is Set to Rise to $15 an Hour

By Nick Corasaniti


Jan. 17, 2019

A new bill in New Jersey proposes increasing the minimum wage to $10 an hour this July 1. Then it would increase gradually until it reaches $15 in 2024.


Gov. Philip D. Murphy of New Jersey and legislative leaders agreed on Thursday to a deal that would raise the minimum wage to $15, making New Jersey the fourth state in the country to commit to significantly raising incomes to that level and reflecting a growing national movement to address economic inequality.

The agreement, which would raise the minimum wage to $15 by 2024, would place New Jersey among the most progressive states on the wage issue, joining California, New York and Massachusetts, and comes amid a growing commitment to help lower-income workers whose wages have remained stagnant even as corporate profits have experienced robust growth.

Leading national Democrats have made the fight for $15 — a $15 minimum wage across the country — central to their platforms, and Democrats in the House of Representatives recently introduced a bill that would raise the national minimum wage to $15, far higher than the federal hourly rate of $7.25.

New York City and the District of Columbia have raised the minimum wage to that level. Major corporations including Target, Amazon and the Gap have raised the minimum wage among their own employees. Airport workers in New York are now on a path to earning at least $19 an hour.

The minimum wage in New Jersey is currently $8.85, and raising it to $15 would boost the incomes of more than 1 million people in the state, according to New Jersey Policy Perspective, a liberal-leaning research group. The bill proposes increasing the minimum wage to $10 an hour on July 1. On Jan. 1, it would increase to $11 an hour, and then would increase by $1 an hour every year until it reaches $15 in 2024.

“No one working a full-time job should ever live in poverty,” Mr. Murphy, a Democrat, said in a statement. “Putting the minimum wage on a clear and responsible path to $15 an hour is good for workers, good for our businesses and good for our economy. A higher minimum wage strengthens all of New Jersey.”

The announcement of an agreement between Mr. Murphy, Stephen M. Sweeney, the senate president, and Craig Coughlin, the speaker of the assembly, amounts to a fait accompli; both Mr. Sweeney and Mr. Coughlin had said they would not introduce a bill unless it could pass and Mr. Murphy would sign it. With Democrats in control of both houses of the legislature, passing the bill will be a formality.

The agreement also marks a major political victory for Mr. Murphy, who made raising the minimum wage and legalizing marijuana central promises during his run for governor. Though he said during his campaign that he wanted to raise the minimum wage to $15 by 2021, the governor said he was willing to negotiate with legislative leaders to get it passed early this year.

The bill includes some exceptions: For seasonal workers and employees at small businesses who employ five workers or less, the base minimum wage would reach $15 an hour by 2026. For farmworkers, the base minimum wage would increase to $12.50 an hour by Jan. 1, 2024. Then, a special committee would review whether to raise those workers’ minimum wage to $15 an hour.

Mr. Sweeney said the $12.50 minimum wage for farmworkers was the highest wage for such workers in the Northeast, and said that the plan also includes tax credits for employers who hire people with disabilities.

But some progressive leaders in the state, while largely pleased with the bill, expressed concerns about creating two tiers of workers.

“If I’m a farmworker, and I can make $2.50 more an hour delivering food versus picking it, I’m going to make an economic calculation for me and my family,” said Analilia Mejia, the executive director of the New Jersey Working Families Alliance. “Farmworkers are overwhelmingly people of color, so these are already vulnerable work forces, so leaving them behind is doubly concerning.”

New Jersey has played a pivotal role in the long-running debate over the effects of raising the minimum wage. In the early 1990s, two Princeton University economists, David Card and Alan B. Krueger, published a study that shattered accepted wisdom on the subject.

They found that a 1992 increase in the state’s hourly minimum wage — from $4.25 to $5.05 — did not result in a loss of jobs, as some had argued that it would. Instead, they found a positive effect: Fast-food restaurants in the state increased employment by 13 percent in comparison to their counterparts in Pennsylvania, which had not raised its minimum wage.

Subsequent academic studies have concluded that the effects on employment of increasing minimum wages were slightly negative at worst. But opponents of high minimum wages continue to contend that they leave employers no choice but to eliminate jobs.

“Today’s announcement is another hit to small businesses who are absorbing cumulative costs in the form of new mandates, more subsidies for energy delivery and increased taxes,” said Michele N. Siekerka, chief executive of the New Jersey Business and Industry Association, a trade group. “Most small business owners pay what they can afford for their workers. Now that it’s a mandate, it is inevitable that some of those with the smallest of profit margins will struggle, stagnate or simply fail.”

The state’s three Democratic leaders negotiated for more than a month before finally coming to an agreement on the wage bill.

“Since the day I was sworn in as Assembly speaker, I have pledged to do all I can to make New Jersey more affordable,” Mr. Coughlin said. “By increasing the minimum wage to $15 an hour by 2024 for the majority of workers, we are achieving the goal of lifting people up to improve their quality of life.”

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