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On January 1 of this year, low-wage workers in Oregon woke up to a 20-cent an hour pay raise. In neighboring Washington, they got 19 cents.
The people living in those states didn't have to lobby or beg for the increase. They didn't have to endure insults from opponents telling them they have to work cheap because they lack skills, or that making more money is somehow bad for them. They didn't have to wait years for politicians to put them on the agenda. They just had to live in a state where rational people understand that as the cost of everything else rises, the minimum wage should rise too.
New Jersey ought to be one of those states too. Here, the minimum wage is not tied to inflation the way it is in Oregon, Washington and-by a vote of the public last November-Florida. In New Jersey, we make working people wait, and wait and wait. So the minimum wage in New Jersey has increased by just 10 cents in the past 13 years. But if New Jersey's meager minimum wage of $5.15 an hour were indexed to inflation it would have gone up by 13 cents this year alone. Had it been tied to inflation since its peak buying power in 1968, the state's minimum wage would now be $8.78. Instead, low-wage workers fall farther behind. Last year it took 158 hours of minimum wage work a week to afford a decent two-bedroom apartment. That's five hours more than the year before. The increase in the minimum wage over that period: zero.
When he proposed raising the state's minimum wage to $7.15 an hour, Acting Governor Codey opened the door to automatic yearly increases by saying he wants a labor-management council created to recommend how to do it. All we really need is the will to go beyond Codey's proposal. The raise should be to $7.50 an hour, reflecting the fact that New Jersey's cost of living is more than a third above the national average. And we should lock in the raise with automatic yearly increases to keep up with inflation-not a council to study the idea.
Meanwhile, we get to listen to business groups argue that paying the lowest wage workers a little more is beyond what employers can afford. Strange, isn't it, that business doesn't think giving CEOs huge bonuses on top of already huge salaries is more than it can afford. It was recently reported that Lucent's CEO received a bonus of $2.95 million, or two and a half times her salary.
But if we're really concerned about what business can handle, it should be pointed out that regular yearly increases are better for the bottom line than sporadic hikes. As Massachusetts Gov. Mitt Romney said, "I do not believe that indexing the minimum wage will cost us jobs. I believe it will help us retain jobs." There is something to be said for predictability.
Romney's view on job loss is borne out by data. In states where the minimum wage is higher than the federal rate of $5.15, total employment increased by over six percent from January 1998 to January 2004. That's more than 50 percent greater than the job growth in states with the federal minimum wage.
New Jersey's low-wage workers clean the houses, tend to the children, and take care of the parents of the more affluent. Yet when prices go up for rent, utilities, groceries and everything else, they haven't been seen as "deserving" of more pay. They are told they need more training and education. Training and education are great. But when these people are trained for other tasks that move them up the ladder, what about the people who take their place at the bottom? Let's not forget that there will always be low-paying jobs in our society-but they shouldn't pay poverty wages.
Just because New Jersey's state government has lacked the foresight to raise the minimum wage over the past decade, does not mean that workers should have to continue to struggle. We need to raise the wage-and lock in the gains with automatic yearly increases.
Susan J. Bottino is a policy analyst for New Jersey Policy Perspective and author of the report, "Slip Slidin' Away: $5.15 an Hour Isn't Enough,".
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