Last November, New Jersey voters amended the State Constitution to raise the minimum wage from $7.25 to $8.25. Business owners opposed the proposal and claimed that it would lead to job losses and undermine their ability to move past the lingering effects of the recession. On the other side, those in favor said that academic studies show that raising the minimum wage has only minor effects on employment and provides stimulus to the economy by putting more money in the hands of people most likely to spend it.
Both sides had valid concerns. Opponents of the wage increase say that even a slight increase would be a “job killer” and would particularly hurt teenage workers and small businesses. They also expressed concern that businesses will have to cut back hours and benefits or lay off workers and curtail hiring.
Those in favor believe that raising the minimum wage will affect about 500,000 New Jersey workers (around 11% of the workforce). They estimate that workers directly affected will get an average annual raise of $980 each and those indirectly affected $220 per year. This, they say, would be spent immediately and locally, stimulating New Jersey’s economy.
Only time will tell what the impact raising the minimum wage will have for New Jersey. Will it give workers more money and boost the economy or will it created more problems by overly burdening businesses, with unintended and unwanted consequences? With the assistance of Charles J. Vaccaro, J.D. Candidate May 2015.