Study Shows New Jersey Minimum Wage Increase Would Wipe Out Up to 31,000 Jobs
Economic Effects of a New Jersey Minimum Wage Increase:
An Econometric Scoring of SCR No. 1
The NFIB Research Foundation analyzed the potential economic impact of implementing the changes to New Jersey minimum wage laws* that would amend Article 1 of the New Jersey Constitution to include language stipulating an increase of the minimum wage in New Jersey to $8.25 per hour beginning the January 1 following the date of the amendment’s passage (assumed to be January 1, 2014, for purposes of this analysis). The amendment would also provide for future increases in the New Jersey minimum wage by tying it to the consumer price index for all urban wage earners and clerical workers as calculated by the federal government.
Forecast of Job Loss and Lower Output by Rate of Inflation:
- • 0% inflation = 13,679 jobs lost by 2023; economic output lower by $1.5 billion
- • 2% inflation = 22,695 jobs lost by 2023; economic output lower by $2.8 billion
- • 4% inflation = 31,797 jobs lost by 2023; economic output lower by $4.2 billion
The research shows that:
- • The long-run effect of the legislation would be the destruction of jobs and economic production
in the state of New Jersey. - • Depending upon the rate of inflation in future years, passage of SCR No. 1 could result in over
31,000 lost jobs in New Jersey over a ten-year period; and - • A cumulative reduction in real output of $17.4 billion over that same time period.
- • More than 59% of the lost jobs would be jobs from the small business sector of the economy.
*Contained in Senate Concurrent Resolution (SCR) No. 1 on private sector employment and production. SCR No. 1, sponsored by Senators Stephen M. Sweeney and Shirley K. Turner along with Assembly Members Sheila Y. Oliver, Timothy J. Eustace, and L. Grace Spencer.