New Jersey and New York Propose Minimum Wage Increases in the Aftermath of the Economic Recession

By: Chris Muniz

In January of 2012, Bill A2161,[1] which proposed to increase the New Jersey minimum wage to $8.50, was introduced and referred to the New Jersey Assembly Labor Committee.[2]  Currently, New Jersey is one of twenty-three states that maintain the federal minimum, $7.25, meaning this Bill would give New Jersey the third highest minimum wage in the Country.[3]  After being reported out of the Assembly Labor Committee, the Bill was passed by the full Assembly on May 24, 2012 with a 46-33-0 vote.[4]  On November 19, 2012, the New Jersey State Senate Budget Committee passed the Bill with a 7-6 vote.[5]

At that time, Governor Chris Christie indicated to some Senate members that he would not sign the Bill because it included an automatic annual wage adjustment provision based on the consumer price index.[6]  Interestingly, some Republicans in the Legislature noted that they were not opposed to a minimum wage increase, but questioned the wisdom of doing so with the increased unemployment rate and in the aftermath of Superstorm Sandy.[7]  In spite of some of these concerns, the Senate passed the Bill with a 23-16 vote on November 11, 2012.[8]  The Bill was ultimately approved by both houses on December 3, 2012, with a 44-31-1 vote and was left for Governor Christie’s signature to sign it into law.[9]

Just this past Monday, January 28, 2013, Governor Christie vetoed the Bill on the last possible day he had to make his decision.[10]  Governor Christie however countered with a scaled back plan to phase in a one dollar increase over the next three years, a 25-cent hourly increase in the first and third years and a 50-cent hourly increase in the second year.[11]  As previously noted, Governor Christie’s stated reasoning for doing so was his fear that the Bill would have hurt the State’s economy.[12]  Specifically, Governor Christie stated that “[T]he sudden, significant minimum-wage increase in this bill, coupled with automatic raises each year tied to the Unites States Consumer Price Index, will jeopardize the economic recovery we all seek.”[13]  In order to “sweeten” the counter proposal, Governor Christie promised to increase the earned income tax credit if the Democrats would support his proposal.[14]  The Bill now is slated for a second vote in the Legislature to decide whether to overrule Governor Christie’s veto.[15]

This Bill comes at a time when many states across the country are either increasing their minimum wage or have plans to increase it as the economy recovers from the recession.[16]  Since January 2013, twelve states have contemplated increasing their minimum wage other than minimum wage including Maryland, Hawaii, and New York.[17]  In nine other states, automatic wage increases took effect ranging from ten to thirty-five cents.[18]  Opponents to these increases largely state that potential harsh effects that could be felt by small businesses especially in conjunction with rising labor costs.[19]  However, most of these states seem to be taking action on par with President Obama’s platform of balancing the scale between the rich and the poor in America.[20]  In President Obama’s State of the Union Address last week he specifically noted that this growing gap between the rich and the poor needs to be addressed because it is the “defining issue of our time.”[21]

Taking their cue from President Obama, this issue of income inequality has been recognized by lawmakers in Albany and on Monday January 28, 2013, New York State Assembly speaker Sheldon Silver announced plans to introduce a bill that would increase New York’s minimum wage to $8.50 an hour.[22]  This 17% increase is also coupled with an automatic increase adjusted each year for inflation.[23]  According to Governor Andrew Cuomo, this increase could help more than 1.5 million New Yorkers and could likely push up earnings for those just making over minimum wage, a pay increase that could affect 1 in 5 workers statewide.[24]  Under the proposed bill, an estimated extra 1 billion dollars could be injected into New York’s economy and potentially create 7,300 new jobs in the State.[25]  Not all economists agree that however that this increase in minimum wage would truly create new jobs or help stimulate New York’s ailing economy.[26]  Nonetheless, Governor Cuomo has made this proposed minimum wage increase a significant part of his budget bills for 2013.[27]  Those budget bills are to be debated in the New York State Legislature over the coming weeks with the finalized budget for 2013 scheduled to be passed by March 31, 2013.

---

[1] S. Budget & Appropriations Comm., A2162, 215th Leg., 2162 (N.J. 2012), http://www.njleg.state.nj.us/2012/Bills/A2500/2162_R1.PDF.

[2] N.J. Leg., A2162 Increases minimum wage to $8.50 then makes annual adjustments based on CPI Increases, N.J. LEG. (last visited Feb. 3, 2013), http://www.njleg.state.nj.us/bills/BillView.asp.

[3] Angela Delli Santi, Christie sent measure raising NJ’s minimum wage, Bloomberg Bus. Week (Dec. 12, 2012), http://www.businessweek.com/ap/2012-12-04/christie-sent-measure-raising-njs-minimum-wage.

[4] N.J. LEG., supra note 2.

[5] CBS N.Y., Associated Press, New Jersey Senate Committee Votes For Minimum Wage Increase, CBS N.Y. (Nov. 19, 2012, 7:48 PM), http://newyork.cbslocal.com/2012/11/19/new-jersey-senate-committee-votes-for-minimum-wage-increase/.

[6] Id.

[7] Santi, supra note 3.

[8] N.J. LEG., supra note 2.

[9] Id.

[10] Seth McLaughlin, N.J. Gov. Christie vetoes minimum wage increase, offers another, The Wash. Times (Jan. 28, 2013, 2:27 PM), http://www.washingtontimes.com/blog/inside-politics/2013/jan/28/nj-gov-christie-vetoes-minimum-wage-increase/.

[11] Id.

[12] Jenna Portnoy, Christie vetoes minimum wage bill, Democrats vow to put measures on ballot, N.J. (Jan. 29, 2013, 1:06 PM), http://www.nj.com/politics/index.ssf/2013/01/christie_minimum_wage.html.

[13] Id.

[14] Id.

[15] Id.

[16] Emma Beck, Growing number of states look at minimum wage hikes, USA Today (Jan. 29, 2013, 6:50 AM), http://www.usatoday.com/story/news/nation/2013/01/28/minimum-wage-increases/1862355/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+hometop4+(Top4+-+Flipboard).

[17] Id.

[18] Id.

[19] Id.

[20] Andrew Harrer, 2012 State of the Union Address, N.Y. Times (Jan. 24, 2013), http://topics.nytimes.com/top/reference/timestopics/subjects/s/state_of_the_union_message_us/index.html?inline=nyt-classifier.

[21] Jon Eligon, With Focus on Income Inequality Albany Bill Will Seek $8.50 Minimum Wage, N.Y. Times (Jan. 29, 2013), http://www.nytimes.com/2012/01/30/nyregion/albany-bill-would-raise-the-new-york-state-minimum-wage-to-8-50.html?_r=0.

[22] Id.

[23] Id.

[24] Teri Weaver, Higher minimum wage could create 7,300 new jobs in New York, study says, Syracuse (Jan. 28, 2013, 1:54 PM), http://www.syracuse.com/news/index.ssf/2013/01/higher_minimum_wage_could_crea.html.

[25] Id.

[26] Id.

[27] Teri Weaver, Debate rages over New York raising its minimum wage by $1.25 an hour, Syracuse (Mar. 13, 2012, 9:13 AM), http://www.syracuse.com/news/index.ssf/2013/01/higher_minimum_wage_could_crea.html.