In November of 2013, New Jersyians flocked to the polls and ultimately decided that the minimum wage just wasn’t cutting it. The citizens of the Garden State, along with citizens from 13 other states, passed a constitutional amendment that, on January 1, 2014, raised the state’s minimum wage by $1 to $8.25/hour. That’s not all, the amendment also requires the implementation of annual cost-of-living adjustments, a measure that would inevitably increase the minimum wage even further. Needless to say, a majority of voters saw this legislation as a step in the right direction, a relief for families living on minimum wage incomes and response to the ever growing cost of living, especially here in New Jersey. But is this the whole story?

Prior to January 1, the minimum wage in New Jersey was $7.25/hour. This translates into $290/week, before taxes, assuming an individual works 40 hours/week. A salary of less than $15,000/year is a far cry from livable. It is for this reason, many individuals making minimum wage are required to work two even three jobs, leaving less time for leisure, family time, etc. What impact does such a low wage have on family life in the United States, where both parents are required to work multiple jobs just to put food on the table? Undoubtedly, this increase will alleviate the plight of those who live on a minimum wage salary, but what of businesses who are forced to increase their operating costs in an already difficult market.

Last week CNN Money reported that some employers, in an effort to maintain fairness among employees, have had to increase the salaries for all their workers. Small businesses will be hard-pressed when the wages of their junior employees begin rising and senior employee salaries remain the same. These across the board raises can be disastrous for small businesses in New Jersey. Concerns surrounding business operating expenses, which unquestionably include labor costs, could lead some businesses to lay-off employees, thus leaving a minimum wage worker with no wage at all.

Although, concerns surrounding labor expenses are legitimate, ultimately, concerns surrounding the average minimum wage earner win the day. Even President Obama, addressed the issue by implementing a 10.10/hour minimum wage for federal contract workers. On Tuesday, January 28, 2014 the President used his executive power “to advance his agenda on behalf of the American people.” What does this mean for the future of minimum wage among the states? Hopefully, this will be a heralding of a time when the minimum wage is no longer synonymous with Medicaid and Food Stamps. Unfortunately, the stark reality today, is that the cost of food, housing and basic needs is rising faster than the incomes of blue collar workers. This invites the questions of whether a minimum wage, even with the recent increases, is a wage at all.

The above blog post was written over one year ago. The information in this blog post may not be current due to changes in the law or recent case decisions. We encourage you to contact our firm, at 973-509-8500, for information on this particular post and to make sure the content is still current.

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