Times of Trenton (Guest Opinion Column)
By Charles Wowkanech
Opponents of raising New Jersey’s minimum wage often claim that the minimum wage was never meant to be a living wage, but only a temporary stepping stone toward more lucrative employment. This is a great idea, but what opponents fail to realize is that our state’s minimum wage is so abysmally low that it is no longer a stepping stone, but a pathway to long-term poverty.
A living wage is about more than just meeting basic necessities. It is about having enough money to save, take a vacation and live comfortably. Neither the current minimum hourly wage of $7.25 nor an increase to $8.25 per hour could be considered a living wage.
However, a $1 an hour increase would bring workers one step closer to a survivable wage. There should be no dispute that workers, who often juggle two and three jobs, have the right to at least sustain themselves and cover the costs of basic necessities. In fact, in order to give workers the chance to improve their economic standing, a survivable wage is essential.
In New Jersey, a minimum-wage employee working 40 hours a week would have an annual gross salary of $15,080 or approximately $1,257 per month. With our state’s high cost of living, a monthly rent payment alone would use the majority of that worker’s paycheck before even factoring in the cost of groceries, heating, electricity, a phone, transportation, insurance and health care. Now think about what a $1 increase in the minimum wage, or about $200 more a month, could mean to this worker.
Fears that increased labor costs would harm businesses are deceptive. Raising the minimum wage would actually generate real value for businesses by increasing job retention and reducing the costs associated with employee turnover. It should also come as no surprise that financially stable workers are more productive workers.
The claim that raising the minimum wage would cause prices to spiral out of control is also flawed. In fact, countless businesses pay workers above the minimum wage and maintain affordable prices for their products.
Those who argue that now is not the right time to raise the minimum wage, because it would hurt our economy, are mistaken. The reason that our economy is struggling in the first place is because so many jobs today do not pay enough for workers to survive. If we raised the minimum wage, the economy and businesses would benefit from increased consumer spending on local goods and services.
There has never been a better time than now to raise New Jersey’s minimum wage. Corporate profits are at record levels, while workers’ wages have stagnated for decades and families are finding it more difficult than ever before to make ends meet. According to a study by Legal Services of New Jersey, nearly one in four New Jerseyans was living in poverty in 2011, marking a 52-year high. Income inequality is also on the rise. The Wall Street Journal recently reported that between 2009 and 2012, 95 percent of all income gains went to the top 1 percent of Americans.
Fortunately, New Jersey’s workers have the power this Election Day to relieve some economic hardship by voting “Yes” on Ballot Question No. 2. Question No. 2, which will appear at the bottom of the Nov. 5 ballot, will do two things to fix our state’s minimum wage. First, it will increase the state minimum wage from $7.25 to $8.25 per hour. Second, future wage increases will be tied to inflation so that workers are able to keep pace with rising costs.
Currently, in order to raise the minimum wage, workers must appeal to the sympathies of politicians and overcome a well-funded opposition from business groups. As one might expect, this has proven to be a slow and inefficient process, which causes workers to fall further behind. According to the National Employment Law Project, if the minimum wage had kept pace with inflation since 1968, it would be $10.56 today.
A report by New Jersey Policy Perspective found that raising the minimum wage would affect a total of 429,000 working New Jerseyans, or 11 percent of the state’s workforce. Of those workers, 82 percent are over 20 years old. The report also found that an increase in the minimum wage would stimulate greater consumer spending, which would boost the U.S. Gross Domestic Product by $174.8 million in 2014. Therefore, claims that the minimum wage would only apply to teenagers and stifle economic activity are unfounded.
While raising the minimum wage in and of itself is not a solution to all of our economic challenges, it is a logical step toward reducing income inequality, addressing poverty, lessening reliance on government assistance programs and providing real opportunity for worker advancement.
This Election Day, let’s make sure that all jobs in New Jersey provide an opportunity for families and communities to grow. Vote “Yes” on Ballot Question No. 2 this Tuesday.
Charles Wowkanech is president of the 1-million-member New Jersey State AFL-CIO.