CIANJ Opposes Minimum Wage Hike

CIANJ is opposed to the bill sponsored by Assembly Speaker Sheila Oliver to increase the minimum wage in New Jersey by 17 percent to $8.50. A hike would hurt job growth and could lead to layoffs that would hurt the very people the bill sponsors want to help.

It would be ill advised at this time to increase the minimum wage. New Jersey’s recovery from the nationwide recession has begun, but it remains fragile and $1.25 hike would pressure employers by increasing costs and result in fewer jobs and fewer hours.

CIANJ agrees with conclusions of the New Jersey Minimum Wage Advisory Commission, which, in delivering its annual report to the governor, opposed a minimum wage increase. The commission noted New Jersey’s wage is consistent with our neighbors in Delaware, New York and Pennsylvania, and any move to increase it would affect New Jersey’s ability to compete in the region.

Wages are best determined by the free market system that relies on competition among employers to attract the best workers, CIANJ concluded. Studies done by the Employment Policy Institute show that the lowest paid workers – the very people policymakers are trying to help — are actually harmed by minimum wage hike proposals because job growth diminishes. Michael Saltsman, a research fellow at the Institute, studied the effects of a minimum wage increase in 28 states from 2003 to 2007 and found it did not reduce poverty. Instead, Saltsman found the forced wage increase made it more expensive to hire less-skilled and less-experienced job applicants and consequently there were fewer jobs and fewer hours for people who need it most.