www.eanj.org N.J. Minimum Wage Constitutional Amendment John J. Sarno, Esq. Employers Association of New Jersey 1
1
www.eanj.org
N.J. Minimum Wage Constitutional Amendment
John J. Sarno, Esq.Employers Association of New Jersey
2
Question #2 Public
3
National Public Opinion76% of Americans would vote to raise minimum wage to $9/hr.
with automatic CPI Increases58% Republicans 43%76% Independents 71%91% Democrats 91%
Gallup (Nov. 2013)
4
Campaign Spending (Approximate)
Proponents - $1.3 millionOpponents - $1 million
5
Typical Statements“Increasing New Jersey’s minimum wage will give nearly half a million working New Jerseyans a crucial leg up while pumping hundreds of millions of dollars into the state’s economy.”
Gordon Mac InnesNew Jersey Policy Perspective
“If this is passed, the minimum wage working poor gets helped. But it would be detrimental to the business community and impede our state to come out of its fiscal problems”
Thomas BrackenNJ Chamber of Commerce
6
The Vote61% - Yes39% - No
Voter turnout – 39.6%
7
Where it Stands NowFederal Minimum Wage (current) - $7.25N.J. Minimum Wage (current) - $7.25N.J. Minimum Wage (Jan 1, 2014) - $8.25
8
As of 201318 states and DC higher than federal standard23 states (including NJ) same4 states below federal standard5 states with no minimum wage
Washington has highest minimum wage $9.19/hr.
9
Fair Labor Standards Act25 cents/hr. – 1938
United States v. DarbyU.S. Supreme Court (1941)
Federal minimum wage applicable to employers that engage in interstate commerce
10
Cost of Living Increases Beginning Sept. 30, 2014 and on Sept. 30th of each year thereafter
Consumer Price Index (CPI-W) calculated by the federal government for Northeast Metropolitan Region
Effective each January 1st
11
Consumer Price Index
12
State Minimum Wage – Constitutional Amendment
FloridaColoradoNevadaOhioNew Jersey
13
State Minimum Wage Increase - CPI
Arizona NevadaColorado OhioFlorida VermontMissouri WashingtonMontana New Jersey
14
Setting Minimum Wage Through Legislation
Last raised in 2005 to meet federal standard of $7.25
15
N.J. Minimum Wage Advisory Commission
“New Jersey should set the minimum wage at $8.25 per hour immediately and should subsequently provide an automatic cost-of-living increase of the minimum wage, indexed to the Consumer Price Index”
2007
16
Minimum Wage and Inflation
If minimum wage had kept up with inflation it would be $17/hr in 2013 – N.Y. Times (Nov. 11, 2013)
17
Commission Members David J. Socolow Chairman Ex-Officio Commissioner, NJ Department of Labor and Workforce Development
Charles N. Hall, Jr. State AFL-CIO Rep. 12/22/2009 President, Local 108, RWDSU/UFCW
Philip Kirschner Business Rep. 1/12/2010 President, NJ Business and Industry Association *
Eric E. Richard State AFL-CIO Rep. 12/22/2009 Legislative Director, State AFL-CIO Rep
JoAnn Trezza Business Rep. 1/12/2010 VP, Human Resources, Arrow Group Industries
* Dissenting
18
Legislative Action and Governor’s Veto
2012 – Legislature passed bill consistent with Commission’s recommendation
2013 – Conditional veto Phase-in $1/hr increase over 3 years with no automatic cost of living increases
19
Hourly Wages By County5 highest: Hunterdon, Somerset, Morris, Burlington, Bergen
5 lowest: Atlantic, Camden, Salem, Essex, Cape May
Highest percentage of “Yes” voters – Camden, Essex, Hudson
Highest percentage of “No” votes – Cumberland, Cape May, Monmouth
20
Immediate Impact – January 1, 2014
Full-time worker, 40hr/week - $15,080/year
2014 - $17,160/year
Office of Legislative Services predicts 2.8% in 2015 - $480.50/year
21
NJ Minimum Wage Workers (16-years and older) - 2013Office of Legislative Services:
41,000 Earn minimum wage58,000 earn between $7.25 - $8.00No informative available - $8.00 – $8.25
N.J. Policy Perspective:241,000 earning between $7.25 – $8.25188,000 earning between $8.25 - $9.25
22
Amendment’s ApplicabilityEvery employer (including public employers)
If federal minimum wage is higher than state wage, state wage automatically increases
Does not amend N.J. Wage and Hour Law
57,000 paid less than minimum wage (not subject to minimum wage) – Learners apprecentices, students, trainees
23
Industries with Most Minimum Wage Workers
Leisure and Hospitality (includes restaurants and food service)
Retail
Other Services
Fast – Food Industry
Median hours/week - 30Median wage/hr - $8.69
52% of families of front-line, fast-food workers rely on public assistance - $7 billion/year
24
Minimum Wage and Other Wages
Wage Compression
John is hired in 2013 at $7.72/hr.Expected increases 2014 $7.95/hr. 2015 $8.19/hr.
Jane is hired in 2014 at $8.25/hr.
Do you raise John’s wage?
25
Impact on State Average Weekly Wage (SAWW)
UI, STD and FLI Benefits
Eligibility is based on 20 base weeks (20-times the minimum wage)
2013 base week is $145/week2014 - $165/week
Higher benefits and employer taxes over time
26
Overall Economic ImpactDavid Card and Alan Krueger from Princeton University measured impact of $4.25 - $5.05 increase in 1992 (18%)
Based on 410 fast-food restaurants in South Jersey
At the time, $5.05 was highest in the country
27
High-wage stores (paying $5/hr or more)
Low-wage stores (paying the $4.25/hr minimum wage)
Employment “contracted” at high-wage stores due to worsening economy (0.5% per store)
No impact on free and reduced-price meals to employees
Some evidence of slight price increases
28
No evidence that part-time workers replaced full-time workers
Employment “increased” at low-wage stores
Increased wage may have induced older, more skilled employees to take fast food jobs
Result may be specific to fast-food industry
29
Don’t ForgetPlease take the time to fill out EANJ’s Wage Surveys
30
Minimum Wage and Public Assistance
Supplemental Nutrition Assistance – eligibility at 30/ hrs/week at minimum wage (A parent with 2 children making minimum wage receives $276/month)
NJ FamilyCare – Parents with incomes up to $31,322 for family of four; Adults without children $15,282
Housing Assistance – Low-income individuals whose housing costs exceed 30% of household income
Collectively worth $18.62/hr if eligible for all maximum assistance – Cato Institute
31
Thank You
Questions?