$15 AN HOUR MINIMUM WAGE WOULD COST NEW JERSEY TENS OF THOUSANDS OF JOBS…AND THEN SOME
TRENTON (May 12, 2016): To those under the misguided
impression that a $15 an hour minimum wage is sustainable in the great Garden
State, the National Federation of Independent Business (NFIB) begs to differ.
Their Research Foundation released a study this morning highlighting the
devastating impact existing legislation will have if the minimum wage rate
immediately increases from $8.38 an hour to $10.10 an hour. If Senator Sweeney
gets his way, the increase would then be followed by annual increases of $1
until the rate reaches $15 per hour. Once at $15, annual adjustments would be
tied to inflation, as they are now. According to the study, this proposal will decimate
the small business sector and dry up what little employment opportunities New
Jerseyans have.
“The findings of our study today are worse than even I
anticipated they would be. The long-term result of the labor cost increase
associated with $15 an hour minimum wage is New Jersey losing 70,000 jobs over
the next decade,” said NFIB New Jersey state director, Laurie Ehlbeck. “The
Senate is poised to consider a minimum wage bill on Monday that, if
implemented, will immediately strike the small business community a difficult
blow. Even more concerning, however, is the degree of economic damage it will
cause over the long term. Raising the cost of labor for employers of minimum
wage workers by 79% over as little as five years is a hit that no one can afford to take.”
According to NFIB’s Research Foundation, the minimum wage
bill doesn’t just cost jobs over the long run or even stop at $15 an hour.
Additional payroll taxes that must be paid on wage differentials will only add
to the financial burden experienced by employers attempting to retain employees
that could be making as much as $16.16 by 2022.
“Small business owners pay payroll taxes on 7.65% of their
employee’s wages which means that not only are lawmakers expecting them to
compensate for a dramatic increase in labor costs, they’re also hitting them
with a tax increase, which is what Trenton does best,” continued Ehlbeck. “Of
course, the tax increase is probably because they’ll be in need of a revenue
source. Unfortunately our study does a great job highlighting the billions of
dollars that New Jersey’s lethargic economy is going to lose if this bill is
enacted.”
Additionally, the Research Foundation found that because the
bill ties future increases to inflation once it hits $15 an hour, New Jersey’s
minimum wage rate would exceed $17 an hour by 2027 if inflation continues the
trend that it has experienced since the great recession.
“Proponents of this bill have clearly lost sight of the fact
that the minimum wage rate was designed as a starting point for people new to
the workforce, not something that was ever intended to feed entire families.
Raising it to such an exorbitant amount is clearly not out of concern over our
fiscal future, it is about advancing a political agenda and failing to
stabilize our state’s economy,” concluded Ehlbeck.
