New Jersey reaches milestone $15 minimum wage — and some already are saying it isn’t enough

Inflation seemingly has wiped out many of potential benefits when rate was suggested more than 5 years ago

New Jersey reaches milestone $15 minimum wage — and some already are saying it isn’t enough

The long-celebrated fight for $15 — which began when the state’s minimum wage was still in single digits — will be over on Jan. 1, 2024, when the state’s wage is elevated to $15.13.

Its impact isn’t as clear. But it is not likely to be what proponents thought it would be when the battle began.

For starters, many jobs already pay above the rate — a supply-and-demand benefit caused by a shortage of entry-level workers. And, it should be noted, there is a lower minimum for some jobs, including agriculture workers.

But, there’s also this: Rising prices — some caused by inflation — have made the wage not worth as much as some felt it would be years ago.

While the minimum wage was just $8.60 an hour when Gov. Phil Murphy took office in 2018, food — among other items — was cheaper then. Today, most meals cost plenty more.

Peter Chen, a senior policy analyst at New Jersey Policy Perspective, a progressive think tank, said the milestone is a mixed bag.

“This minimum wage increase is the well-deserved and historic culmination of decades of organizing and tireless efforts by low-wage workers, labor unions and advocacy groups throughout New Jersey,” he said. “And the state’s economy continued to boom throughout the wage increases, vindicating the view that fair wages and economic prosperity can coexist.”

Of course, as has been proven in the race to $15, raising wages brings consequences.

Stephanie Ruhle, an MSNBC host and former top Wall Street executive, discussed the conundrum during the Middlesex County Business Summit on Tuesday.

“We get really excited about increasing wages,” she said. “We want that, and it’s important. People deserve to make it a living wage, but we forget what happens on the other side.

“Everyone can say, ‘Businesses should make less money.’ Go be a business owner and tell me that. If you’re a small business owner, it’s very, very difficult to suddenly say I’m just going to pay a little more money; it’s got to come out somewhere.”

And ultimately leads to the cost being put on consumers.

Murphy and other state officials celebrated the milestone wage nonetheless.

“When I first came to office, one of my top priorities was to increase the minimum wage for millions of New Jerseyans,” Murphy said. “One year later, we put pen to paper and officially signed legislation to raise New Jersey’s minimum wage to $15 per hour by 2024.

“As we approach this long-awaited benchmark, I am hopeful that New Jersey workers will be able to improve their quality of life and secure a better future for their families in the middle class. Our administration will continue to prioritize our workers, who are the backbone of our economy.”

Under the law, seasonal and small employers were given until 2026 to reach $15 per hour to lessen the impact on their businesses. The minimum hourly wage for these employees will increase to $13.73/hour on Jan. 1, up from $12.93.

Agricultural workers are guided by a separate minimum wage timetable and were given until 2027 to reach the $15/hour minimum wage. Employees who work on a farm for an hourly or piece-rate wage will see their minimum hourly wage increase to $12.81, up from $12.01. Additionally, long-term care facility direct care staff will see their minimum wage rise by $1, to $18.13/hour.

Department of Labor & Workforce Development Commissioner Robert Asaro-Angelo celebrated the announcement, too.

“This is a proud moment for New Jersey as we prepare to become one of only a handful of states with a minimum wage above $15 an hour,” he said. “As we reach this significant milestone, my heartfelt appreciation goes to Gov. Murphy and our Legislature for their dedication and commitment to supporting New Jersey workers and businesses.”

The Labor Department sets the minimum wage for the coming year using either the rate specified in the law, or a calculation based on the Consumer Price Index, whichever is higher. Once the minimum wage reaches $15 per hour in January, the state Constitution specifies that it continues to increase annually based on any increase in the CPI.

Tipped workers’ cash wage will remain at $5.26/hour, with employers able to claim a $9.87 tip credit, an increase of $1. If the minimum cash wage plus an employee’s tips do not equal at least the state minimum wage, then the employer must pay the employee the difference.

Chen said additional metrics should be used, too.

“In 2019 dollars, a $15 wage today is only worth $12.30,” he said. “The state needs one fair wage that meets the needs of families and covers all workers. Lawmakers need to build on the success of the minimum wage increase by removing the outdated and exploitative exemptions to the minimum wage and raising the wage to reflect the state’s cost of living.”

For more on the rights and protections of tipped workers, click here.

For more information on the state minimum wage, click here.