The Star-Ledger

Codey OKs Hike In Minimum Wage

The Star-Ledger — Wednesday, April 13, 2005

BY TOM HESTER
Star-Ledger Staff

Nearly 300,000 New Jersey workers can expect a pay increase in October after acting Gov. Richard Codey yesterday signed legislation to increase the state's minimum wage.

The state's first minimum wage increased in six years will take the rate to $6.15 an hour this October and $7.15 in October 2006, up from $5.15 an hour.

"For too many of our citizens, what a family earns is insufficient to keep pace with the high cost of living," Codey said as he signed the bill at the state-run One Stop Training Center in New Brunswick. "It is wrong that a person who works full-time to provide for a family should have to live below the poverty level in New Jersey. We are going to help change that by raising the minimum wage, and making sure that an honest day's work is rewarded with an honest day's pay. This action is long overdue."

Codey's action was applauded by union leaders, but drew jeers from small-business owners.

Frayda Levin, owner of Regent Book in Lodi, said consumers will feel a sting from the increase.

"While our legislators ignored our warnings about how a 40 percent increase in minimum wage will cause businesses to lay off employees and possibly close, consumers will not be able to avoid dealing with the consequences," she said. "Consumers in New Jersey can expect higher prices, longer lines at registers and fewer small businesses to serve them as a result of this increase."

"Unfortunately," Levin added, "by the time we business owners have absorbed the full effect of this increase, our legislators will have long ago congratulated themselves and moved on to placing yet another burden on those trying to provide services."

According to the state Department of Labor, nearly 300,000 people in New Jersey earn less than $7.15 an hour. New Jersey was a minimum wage leader when the state raised the level to $5.05 an hour in 1992. In 1999, it was raised to $5.15 to comply with the federal minimum wage.

The governor's office said federal poverty guideline for a family of four is $18,850. At $5.15 an hour, an individual who works full-time earns about $10,300 annually.

The legislation also will establish a state Minimum Wage Advisory Commission, which will annually evaluate the adequacy of the minimum wage and consider such factors as the cost of living, changes in purchasing power and federal poverty guidelines. The panel will be composed of the state labor commissioner, two business representatives and two union leaders.

The minimum wage increase is opposed by the business community and most Republican legislators.

"While this legislation might have the best of intentions, it does not take into consideration the economic realities faced by New Jersey's small business community," said John Holub, director of the 11,000-member state chapter of the National Federation of Independent Businesses. "The bottom line is, an increase in the minimum wage will be a direct body blow to small businesses."

Nine Democratic legislators, including Assembly Speaker Albio Sires (Hudson) co-sponsored the wage bill, S-2065/A-3781.

"History shows that raising the minimum wage has not had a negative impact on jobs, economic growth or inflation," Assemblyman Craig Stanley (D-Essex) said.

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