by Brian T. Lynch, MSW
A State Senator in New Jersey fears a $1 raise for the working poor in this state will be too much of a hardship for businesses if the economy slows down a little.
For some national context, New Jersey passed a minimum wage law last year that will boost the minimum to $15 per hour by the year 2024. After the initial jump this past January, the working poor will receive a one dollar per hour raise every January between now and January of 2024.
New Jersey is an expensive state in which to live. The northern half of the state is part of the New York City metropolis. The central sections of the state are within the Philadelphia metropolis. The latest Economic Policy Institute study estimates a family of two adults and two children in Morris County would need a combined income of $104,121 per year to live comfortably. That works out to $50 per hour, 40 hours per week for one breadwinner, or $25 per hour if both parents work full-time. It also means that a single mother making the current minimum wage of $8.85 per hour would have to work 25 hours per day, 9 days per week to live comfortably in Morris County.
State Senator Vin Gopal, a Democrat from Monmouth County, NJ, said the state minimum wage law was an “irresponsible bill” when it passed. He is sponsoring a bill that would suspend minimum wage hikes in the future if there are signs of an economic slowdown. He calls this, “a basic, common-sense precaution.”
Back when workers and business owners were neighbors, owners cared about what would happen to an employee’s family during economic downturns. They would make adjustments and only ask all of their workers to make a small temporary sacrifice if needed so that the business and workers could both survive.
In today’s callus corporate environments, workers are a commodity (labor) to be hired or fired as a way of fine-tuning profits. This jaded view of people is reflected in the pending NJ Senate bill, S3607, which would suspend future minimum wage increases when there are signs of a slowing economy.
This bill doesn’t ask every employee to sacrifice during hard times. It asks only the most vulnerable workers to take a hit for the company. And where is there any built-in expectation that businesses should make any temporary accommodations to their bottom line?
If a company is really so economically fragile that it can’t afford an extra $58 dollars a week for a low wage worker during a downturn, they should have an option to apply to the state for an economic bridge loan to cover the cost of the raise until the economy turns around. Increasing worker incomes during an economic downturn, after all, makes economic sense. It is what economists call an economic stimulus. It increases local spending which helps jumpstart the economy.
For businesses to shift the economic stress caused by the normal ups and downs of the business cycle onto the backs of the lowest-paid workers is repugnant to me.