Minimum Wage Bill Is Maximum Headache

NJToday.net — Wednesday, February 29, 2012

By Scott St. Clair
from New Jersey Watchdog – reprinted with permission

TRENTON — For state lawmakers, a plan to hike the state's minimum wage looks like a maximum headache.

What's simple is the question of whether to increase the minimum wage to $8.50 an hour. What's complicated is the escalator clause that would increase that rate annually.

The bill ambiguously ties increases to two different U.S. Consumer Price Indexes — one for New York City and another for Philadelphia. New Jersey does not have an index.

Assemblyman Declan O'Scanlon Jr., of Monmouth County, ranking Republican on the Assembly Budget Committee, claimed the bill's indexing language "indecipherable mish-mash - it's not workable policy."

O'Scanlon said Republicans are open-minded about increasing the minimum wage but "leaving idiosyncrasies in the bill doesn't help make the case."

Assembly Speaker Sheila Oliver, D-Essex County, called the legislation a top Democratic priority that's an "economic stimulus and a recognition that thousands of households in New Jersey are struggling to subsist on minimum wage jobs."

The Assembly Labor Committee approved the bill last week along party lines in a 6-2 vote, with Assemblyman Ronald Dancer, R-Ocean County, abstaining. It now moves to the Assembly for consideration. No vote has been scheduled.

Gov. Chris Christie said he's not sure now is the time to hike the minimum wage.

"Nothing will be done unless I'm a player at the table. Maybe it's time to raise it, but I am concerned how it will affect jobs," the governor said last week.

The state's Minimum Wage Advisory Commission reported last month that raising the minimum wage could put New Jersey at a "competitive disadvantage."

But Oliver rejected that idea during last week's hearing. "Elevating the minimum wage will not be the doom and gloom predicted by some," she said.

Wages and jobs

Businesses argue that higher minimum wages could affect future hiring.

Joe Olivo, president and co-owner of Perfect Printing in Moorestown, said a minimum wage increase may affect the jobs of four of his 48 employees, and could affect future hiring.

"A lot of manual labor that now is cost-effective may become too expensive and cause me to buy a piece of equipment that will replace some of my current minimum-wage employees," he said.

Jeff Brown, health-care campaign coordinator for New Jersey Citizen Action, a 60,000-member consumer group in Highland Park, said hiking the minimum wage is the right thing to do.

"We need a bailout for the people who are working two minimum wage jobs to put food on the table for their children and can barely make ends meet," he said.

Lakisha Williams, 29, is a wheelchair assistant at Newark's Liberty International Airport where she has worked for eight years without a raise above the minimum wage, now $7.25 an hour. A single mother of a 12-year-old daughter, she receives government rent assistance, food stamps and Medicaid, but no child support.

"I want to be able to support my family on my own," Williams said during last week's hearing. She added that a hike in the minimum wage would help.

More questions, no answers

Jennifer Sciortino, a spokeswoman for Assembly Democrats, could not explain how the indexing formula for future increases works, but she said, "the minimum wage wouldn't go down."

"Ultimately, the exact methodology will have to be fleshed out, when the regulations are drafted," Sciortino said when asked how the data from the Philadelphia and New York City CPI indexes would be averaged.

U.S. Labor Department economist Jonathan Church - who said he could not take a position on the overall bill - proclaimed he had never seen legislation that used multiple CPIs for determining wages.

"The author(s) of this legislation may want to consider only using one index ...or detail in the legislation the precise mechanism by which these two measures of inflation should be averaged," Church said, responding to an email from New Jersey Watchdog.

Ten states have indexing language written into minimum wage laws. While each state's procedure is unique, typically they involve pegging an increase in the minimum wage to an increase in a selected consumer prices.

For example, Washington state uses the Consumer Price Index for Urban Wage Earners and Clerical Workers, a national index. When that index increases a certain percentage during a specific 12-month period, the state's minimum wage is increased by the same percentage.

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