Trenton (April 15, 2014) – New Jersey dropped six places in a national economic ranking mainly because of the minimum wage increase approved by voters last November and it should be a reminder to lawmakers in Trenton that the clever politics often has negative results, said the National Federation of Independent Business (NFIB) today.
“We’re getting the kind of national attention that we don’t want now,” said NFIB State Director Laurie Ehlbeck. “Business investors around the country pay attention to these rankings and it affects their perception of the state. Business owner in New Jersey pay attention as well and it influences their outlook on the state’s economic climate.”
The American Legislative Exchange Council this morning released its 2014 Rich States-Poor States Economic Outlook Index, which weighs a number of factors, including rates, labor laws and regulations. New Jersey this year dropped from 39th place to 45th.
“We’re right back at the bottom of the pile,” said Ehlbeck. “We had a big hole to dig out of in the first place and the minimum wage increase made that hole deeper.”
New Jersey has one of the highest income taxes in the country to go along with the highest property taxes. It has a very aggressive regulatory system and now, because of the November ballot question, it has the only minimum wage rate in the country that is required by the Constitution to increase every year automatically.
“For a lot of small business owners that means they’ll never really be able to keep up with the increasing cost of labor,” said Ehlbeck. “That’s a very important consideration when you’re trying to decide whether to hire new employees. The economy won’t improve every year. Other expenses won’t go down every year. But your labor costs will go higher every year.”
Ehlbeck said that New Jersey can’t be competitive unless lawmakers commit to removing some of the impediments to economic growth.
“There’s no reason for New Jersey to be among the highest taxed states in the country,” she said. “If we want to have a top-tier economy then we need a tax structure that rewards hard work and investment. Obviously, having the highest taxes in the country isn’t working.”
To learn more about NFIB please visit www.nfib.com.