WHY A MINIMUM WAGE

For more than 60 years people who make the lowest wages have received protection against those wages being even lower. That protection has come from the government, in the form of minimum wage laws because, as James K. Galbraith aptly put it, "...relative wages are much more a matter of politics, and much less a matter of markets, than is generally believed."

The federal minimum wage was adopted in 1938 as part of the Fair Labor Standards Act (FLSA). Congress passed FLSA after finding "labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers."¹ Federal minimum wage increases since then have been adopted as amendments to FLSA. The most recent increase in minimum wage to its current level of $5.15 an hour occurred in two steps in 1996 and 1997. Assuming full-time employment of 40 hours per week, 52 weeks per year, that equals $10,712 a year. At seven years, the U.S. now is in its second longest period of stagnant minimum wage.

As Table 1 below shows, the purchasing power of the federal minimum wage peaked in 1968. That year the federal minimum wage was $1.60 an hour, which today would be worth over $7.00 dollars in real purchasing value. Considering that the average cost of a new home in 1968 was $26,600² compared to $267,000³ in 2004, and a gallon of regular gas was 34⁴ cents compared to $2.03⁵ late in 2004, the minimum wage has not kept pace.

Indeed, since 1968 the value of the minimum wage has decreased by approximately 40 percent, adjusted for inflation. The 1996-1997 increase is completely eroded to where the real value of the minimum wage now is at one of its lowest points ever. Legislation has been introduced in Congress that would raise the minimum wage to $7.00 an hour.

Federal law does not prevent states from setting their own minimum wage. As Table 2 shows, 12 states and Washington, D.C. exceed the federal minimum wage. On Election Day 2004, voters in two other states passed minimum wage measures. In Florida, an increase to $6.15 an hour was approved. In Nevada, a ballot initiative won that, if passed again in 2006, would increase the state's minimum wage to $6.15 an hour in 2007. It exempts workers under the age of 18 and those whose employers provide health coverage. New York's minimum wage could also rise above the federal level. The legislature passed an increase to $7.15 and is considering an override of Gov. George Pataki's veto.

Table 2
States above Federal Minimum Wage

New Jersey used to be among states with a minimum wage higher than the federal level. In 1992, Gov. Jim Florio signed an increase to $5.05-then the highest in the nation-while the federal wage was $4.25. In 1999, Gov. Christie Whitman signed a law requiring that the state minimum wage not exceed the federal level-which at the time was the current $5.15-or go below it.

There is no requirement for a state to have its own minimum wage rate. Seven-Alabama, Arizona, Florida, Louisiana, Mississippi, South Carolina and Tennessee-do not.

WHO BENEFITS

The last time the federal minimum wage went up, it directly affected nearly 9.9 million workers who had been making between $4.25 and $5.14 an hour, according to a report by the Economic Policy Institute. Because of what is sometimes called the "pushup" effect, another 9.6 million low-wage workers also benefited. Though the law did not require wage increases for them, the upward pressure from the higher wages of those just below led to pay increases. All told, nearly 18 percent of the 111 million workers in the U.S. benefited from the most recent minimum wage increase.⁶

Among those directly benefiting from the 1996-97 minimum wage increase, 58 percent were women, 16 percent were black and 18 percent were Hispanic. These groups make up a higher percentage of low-wage workers than of the entire workforce. Some 71 percent of those directly affected were age 20 and older and 46 percent worked full time.⁷

People in low-wage jobs also tend to fare more poorly than higher-wage workers with regard to health coverage and other benefits from employers. Of workers making less than $20,000 ($9.62 an hour for a 40-hour week), only half receive health insurance from their employers, compared to 80 percent of those making over $40,000 a year ($19.23 an hour). Low wage jobs are less likely to provide sick pay and family leave. These jobs offer less vacation time and tend to be more hazardous. Further worsening the impact of low pay, these jobs require the most night hours so child care often costs more and is more difficult to find. These jobs are the least likely to provide training. And they are only half as likely as high-wage jobs to provide some type of retirement plan.⁸

MINIMUM WAGE IN NEW JERSEY

Five years before the federal FLSA, New Jersey enacted a law concerning minimum wage for working women and children. The law provided "for the investigation and study of wages of women and minors employed in trade and industry in the State of New Jersey; and for the determination and establishment of minimum fair wage standards for such workers; and for the purpose of preventing unfair and oppressive exploitation of such workers."⁹

The law said women and minors were not at a level of equality in bargaining with their employers for minimum fair wage standards. In the absence of minimum rates, the lowering of wages by employers enabled unfair competition against other employers, reduced purchasing power of workers and threatened industry stability.

Rather than set a minimum wage, the law gave the state Commissioner of Labor authority to appoint a wage board to recommend the establishment and amount of a minimum wage when any group of women or minors in any occupation received oppressive or unreasonable wages-defined as less than the reasonable value of services rendered and less than sufficient to meet the minimum cost of living necessary for health. The law allowed minimum wage exemptions for employers hiring apprentices or workers with impaired earning capacity due to age, physical or mental disability or injury.

Under the law, wage boards have been set up temporarily to address concerns of specific industries. The most recent wage board met in 1995 in response to a petition filed by the trucking industry concerning overtime requirements and exemptions. The wage board recommended an exemption for the industry that was overturned in court. The trucking industry then convinced the Legislature to amend the law to reflect the recommendations of the wage board.¹⁰

New Jersey's first state minimum wage, $1.25 an hour, took effect in 1967.¹¹ Since then the state minimum wage has been raised 13 times. (See Appendix A.) The New Jersey minimum wage does not apply to:

• part-time employees primarily engaged in childcare in their employer's home
• persons under the age of 18 without a special vocational school graduate permit
• motor vehicle sales persons
• certain outside sales persons as determined by the Commissioner of Labor
• volunteers with only incidental benefits at a county or other agricultural fair by or participated in by a nonprofit or religious corporation
• full-time students employed by the college or university at which they are enrolled

In addition, municipal, county, state and federal government employees in New Jersey are exempt from the state minimum wage. They are covered by the federal minimum wage instead, even if it is lower than the state wage.¹²

Waitresses must be paid the equivalent of minimum wage either by tips or an hourly wage or a combination of both.

According to the Current Population Survey of 2003 averages put out by the federal Bureau of Labor Statistics (BLS) 75,000 New Jersey workers are paid $5.15 an hour or less. They account for 4.1 percent of the 1.8 million workers in the state that are paid at an hourly rate. About 2.9 percent of workers nationally earn $5.15 an hour or less. Though it might seem surprising for a state with such a high cost of living, New Jersey ties for sixth in the nation in the percentage of workers earning at or below the federal minimum wage. (See Table 3.) None of the 15 states with the highest percentage of workers making at or under $5.15 has a cost of living as high as New Jersey's.^13,14

Table 3
Percentage of Workers at or below Federal Minimum Wage

In fact, as Table 4 shows, New Jersey's cost of living is 32.6 percent higher than the national average. The data come from a survey by ACCRA, a nonprofit organization that compiles data on costs in cities across the U.S. of groceries, healthcare, housing, transportation, utilities and other necessities to produce its Cost of Living Index. For the second quarter of 2004, New Jersey was above the national average in all of these costs and ranked behind only Hawaii, California, Washington, DC and Maryland overall.¹⁵

Table 4
New Jersey's High Cost of Living

Not everyone reflected in these data would be affected by a change in state minimum wage. Some of these workers are employed in a state other than where they live and others are exempt from minimum wage law. Self-employed or salaried workers are not included.¹⁶ Despite shortcomings in the data, it is useful in analyzing minimum wage workers living in New Jersey compared to the U.S. as a whole. The conclusion is clear: too many workers in this high-cost state earn at or below minimum wage.

WHAT IT TAKES TO GET BY

Several studies have found that the amount of money it takes to live in New Jersey far exceeds the minimum wage.

The Economic Policy Institute used a standard of the "basic family budget" to determine the wage a family must make to afford basic needs. The family budget method employs widely available data to tabulate the costs of each major family budget item, taking into account geographic variations and how many adults and children are in a household. For example, in 1999, the family wage budget for a single parent with one child ranged from $13.58 an hour in the Vineland-Millville-Bridgeton area to $16.36 in the Middlesex-Somerset-Hunterdon area.¹⁷ (See Appendix B.)

In 2002, Legal Services of New Jersey's Poverty Research Institute released a "self-sufficiency standard." It measured the wages that families of various sizes and composition in a particular county would require to pay for basic needs without government or private assistance. The study found that a single parent with an infant needed to earn a low of $13.29 an hour in Camden Country and a high of $19.87 in Hunterdon County to be self-sufficient.¹⁸ (See Appendix C.)

All costs typically incurred by a family in New Jersey are higher than the national average but, at 73 percent above average, housing is by far the most expensive budget item. According to the National Low Income Housing Coalition, as shown in Table 5, it takes $19.74 an hour in New Jersey to afford a two-bedroom unit at fair market rent ($1,026 per month). At minimum wage, that comes to 153 hours of work a week.¹⁹ In just one year, from 2002 to 2003, the housing wage-the amount of money needed if housing stays within the federal recommendation of 30 percent of a family budget-in New Jersey rose by 4.73 percent while the minimum wage stood still. Only in Massachusetts and California is housing less affordable than in New Jersey.²⁰

No matter how you measure cost of living, it clearly is going up, and faster than the pay of low-wage workers can match. In 1968, when purchasing power of the federal minimum wage was at its highest, a full-time minimum wage worker could support a family of three at a level 17 percent above the federal poverty threshold. But in 1999, that same family would be 20 percent below the poverty threshold.²¹

And even this understates the failure of minimum wage to meet basic family needs. That's because the federal poverty threshold is widely recognized as inadequate for measuring the self-sufficiency of households. The guide for setting the poverty level takes the cost of food staples and multiplies it by three and then by the number of people in a household. This made some sense in 1963, when it was instituted, and food accounted for 23 percent of a family budget and housing was 29 percent. But today food is just 16 percent of a family budget and housing is up to 41 percent. Nor does the federal poverty threshold take into account geographic cost variations or ages of family members, other than adult and child.²²

Inflation since 1968 has ranged from 1.6 percent in a year to 13.5 percent. Using the Consumer Price Index (CPI), if the federal minimum wage had risen with inflation since 1968, when it was $1.60 an hour, it would now be $8.70.²³ Two states-Washington and Oregon-deal with inflation's impact on wage-earners' buying power by indexing their minimum wage. Both states use variations of the CPI. Oregon's minimum wage is adjusted and then rounded to the nearest five cents. In both states, the cost of living adjustment automatically takes effect January 1 of each year. The Florida and Nevada voter initiatives are similarly indexed.

Another way to look at the worth of the minimum wage is to compare it to the average wage of all workers who are paid by the hour. Here, too, the federal minimum wage falls short. While the minimum wage was around 50 percent of the hourly wage in the 1950s and 1960s, by 2003 it had fallen to 33 percent-the lowest level since 1949.²⁴

New Jersey's minimum wage in 2003 was about 26 percent of the state average hourly wage of $19.72, as calculated by BLS. Between 2001 and 2003, the state's average hourly wage rose by 97 cents, while the minimum wage stood still.²⁵

WHAT NEW JERSEY SHOULD DO

According to 2003 data, the 307,000 workers who now make less than $7.50 an hour-8.3 percent of the state's workforce-would be directly affected.²⁶

Table 6 shows that nearly 60 percent of those directly affected by an increase in the minimum wage from $5.15 an hour to $7.50 are women. Just over 40 percent are black or Hispanic. Nearly 80 percent are age 20 or older. Nearly half work full-time.²⁷ With regard to this last statistic, it should be noted that recent data show many workers employed part-time want to work full-time but cannot find a full-time job. According to The State of Working America, 2004-05, by the Economic Policy Institute, New Jersey from 2000 to 2003 saw a 2.1 percent increase in the number of workers employed part-time involuntarily-meaning they would rather be working full-time. The number of involuntary part-time workers increased in all but three states during this time period and the national average increase was 3.9 percent.²⁸

The typical worker who would benefit directly from raising New Jersey's minimum wage is employed in retail or the leisure and hospitality trade, performing a sales or service job. Service workers include a diverse group of occupations such as home health aides, food preparation workers, building and grounds maintenance, and hairstylists.²⁹

In addition to raising the pay for minimum wage workers, an increase in the minimum wage would indirectly affect workers earning just over the minimum wage. The pushup effect is likely to mean raises for an additional 189,000 workers, those now making between $7.50 and $8.50 an hour.³⁰ Of these, 67 percent work full-time and 88 percent are 20 or older. So the total number of workers affected by an increase in the minimum wage to $7.50 an hour would be over 496,000.³¹

DEALING WITH DOUBTERS

The benefits of raising the minimum wage are clear and proven. Low-wage workers get more buying power. Their families move closer to self-sufficiency. But whenever a minimum wage increase is proposed there is strong opposition-witness New York Governor Pataki's previously mentioned veto. Arguments raised by politicians and business representatives typically center on what they say would be the negative effects of a minimum wage hike.

Let's deal with some of those arguments.

Job Loss

If workers are more expensive, fewer will be hired, according to this claim. But studies have shown that raising the minimum wage does not cause job loss. Economists David Card and Alan Krueger of Princeton University studied the impact on the fast-food industry of New Jersey's 1992 minimum wage increase and found that employment was not adversely affected. They compared jobs in New Jersey to Pennsylvania, whose minimum wage remained the same, and found employment actually went up in New Jersey. They chose fast-food because at that time the industry employed 20 percent of all restaurant workers. The restaurant industry in turn employed about one-third of all workers earning at or near minimum wage.³²

In addition, an increase in the minimum wage acts as a disincentive for workers to leave their jobs, reducing turnover and absenteeism costs. In the fast-food industry, which commonly pays low wages, annual turnover averages 300 to 400 percent.³³

A recent study of state minimum wages by the Fiscal Policy Institute (FPI) in New York found employment is at least as high in states where the minimum wage is above the federal wage is in those where $5.15 an hour prevails. The number of small businesses-50 or fewer employees-increased by 3.1 percent for the higher minimum wage states compared with 1.6 percent for the rest.³⁴ In its own analysis, the U.S. Small Business Administration's (SBA) Office of Advocacy reports that smaller firms already pay higher wages because retaining workers and reducing absenteeism is very important to them.³⁵

Nor will raising the minimum wage put a state at a disadvantage with neighboring states. Minimum wage jobs are largely geographically-specific, support jobs. There will continue to be a need for these jobs. Likewise, low wage jobs are not generally offshorable. Increasing the minimum wage will not have an impact on trade because these are not the types of jobs that can be done far from the persons receiving the service.³⁶

Small Businesses Would Suffer

Some opponents express concern that increasing the minimum wage would make it difficult for small business owners to keep operating. However, of 4,603 small businesses that responded to a survey of their concerns by the National Federation of Independent Business Research Foundation, the minimum wage/living wage issue ranked 57th in importance.³⁷ And in a recent survey by the New Jersey Chamber of Commerce and the business publication NJBiz, 66 percent of respondents said an increase in the state minimum wage to between $7 and $8 an hour would have little or no impact on their businesses.³⁸

While it was once believed that small businesses had a disproportionate share of low wage workers compared to larger firms, research proves otherwise. A report by the SBA Office of Advocacy showed that businesses employing 100 or fewer persons accounted for just over half-54 percent-of workers earning at or near the minimum wage while employing about 52 percent of the total labor force. SBA also found that increasing the minimum wage can make small businesses more competitive with larger rivals.³⁹ This is due in part to higher productivity, lower turnover, reduced recruiting and training costs, decreased absenteeism, fewer incidences of internal theft, improved morale and the increase in employee purchasing power.⁴⁰, ⁴¹

Even among larger businesses, paying more has been shown to have advantage for employers. Costco, which pays an average of $15.97 an hour and starts workers at $10, reports lower turnover, higher productivity and less theft than its competitor Wal-Mart/Sam's Club, which pays on average $11.52. Wal-Mart estimates that it costs $2,500 per worker to test, interview and train a new employee. Only six percent of Costco employees leave after the first year, compared to 21 percent at Wal-Mart/Sam's Club. Even with higher salaries, labor costs as a percentage of sales are lower at Costco than at Wal-Mart because workers are more productive.⁴² Although James D. Sinegal, the CEO of Costco, has been advised to reduce labor costs to increase shareholder profits, he has said, "...when you take care of your customer and your employees, your shareholders are going to be rewarded in the long run. And I'm one of them; I care about the stock price. But we're not going to do something for the sake of one quarter that's going to destroy the fabric of our company and what we stand for." (He also limited his pay in 2002 at $350,000 with no bonuses.)⁴³

Slow Job Growth

The Fiscal Policy Institute study found that in states with higher minimum wages than the federal standard, employment increased by 6.2 percent between 1998 and 2004. States adhering to the federal minimum wage experienced employment growth of only 4.1 percent. The FPI study suggests that "employers are likely to respond to a wage increase by improving the skills of their workers and becoming more efficient, and that slightly higher wages would be offset by savings from reduced turnover and higher productivity."⁴⁴

An example of a company doing well and paying above the minimum wage is In-N-Out Burger, a fast-food company that started in California. It pays new employees $8.25 an hour. All full-time workers receive medical, dental and vision coverage, plus life insurance, toward which they pay approximately 20 percent of the premiums. They also get vacation and sick time. In-N-Out Burger continues to grow in a competitive market, with annual sales nearly double the industry average. The company typically opens 10 stores each year, showing that job creation does not need to slow down just because employees are paid more than the minimum wage.⁴⁵

It Helps People Who Don't Need Help

Opponents typically contend that teenagers, often from well-off families, would reap a large portion of the benefits of a minimum wage increase. They say such workers only work part-time and are not breadwinners for their families. Such arguments are overstated: as noted earlier, the Economic Policy Institute estimates that of the approximately 307,000 New Jersey workers who would directly benefit from an increase in the minimum wage to $7.50, 78 percent are 20 or older, and 46 percent work full-time.⁴⁶

One group opposed to New York's minimum wage increase claimed that over 60 percent of workers living in poverty in the state already earn more than the proposed new pay rate.⁴⁷ But this argument against increasing the minimum wage has two major flaws. It only considers the direct effects on workers making $7.10 an hour or less and not the pushup effect. And the fact that many people in poverty make more than minimum wage is just further proof that the minimum wage is too low.

Skills, Not Pay, Are the Answer

Some say equipping low-paid workers with more skills and college degrees is a better solution than raising the minimum wage. But many low-wage workers already have the skills needed to do their jobs. The problem is the jobs just don't pay. Many low-wage jobs involve interpersonal skills, which are less financially rewarding than mechanical or technical skills. For example, childcare workers make less than animal trainers.⁴⁸ And some workers who make low wages work for other people who also make low wages, like those who care for the children of underpaid mothers and fathers.

Upward Mobility Cures All

This mantra used to apply much more than it does today. Workers no longer can depend on their pay increasing over time. A study by the Boston Federal Reserve Bank and the University of Michigan found that in the 1990s, 40 percent of U.S. families remained in the same income quintile throughout the decade. And 53 percent of families who started the 1990s in poverty remained there.⁴⁹ Contrary to popular belief, minimum wage jobs are not just "starter jobs"-people often stay in these low-paying jobs for a very long time.

Other Programs Work Better, like the EITC

The Earned Income Tax Credit-offered by the federal government and a number of states, including New Jersey-reduces the amount of tax a low-income working individual or family owes. Congress originally approved the EITC in 1975 in part to offset the burden of Social Security taxes and to provide an incentive to work. Income and family size determine the amount of the EITC. To qualify for the federal credit, both the earned income and the adjusted gross income for 2003 must be less than $29,666 a year ($14.26 an hour) for a taxpayer with one qualifying child ($30,666 for married filing jointly), $33,692 a year ($16.20 an hour) for a taxpayer with more than one qualifying child ($34,692 for married filing jointly) and $11,230 a year ($5.40 an hour) for a taxpayer with no qualifying children ($12,230 for married filing jointly). ⁵⁰

New Jersey's EITC, which took effect in 2000, has a more restrictive income eligibility requirement than the federal program. The state program cuts off eligibility at $20,000 a year ($9.62 an hour).⁵¹

Some argue that increasing the minimum wage would result in some low-income families losing eligibility for EITC. What they do not mention is that in most cases the minimum wage would have to almost double for recipients of the New Jersey EITC to lose their eligibility and nearly triple to disqualify workers from the federal EITC. Besides, workers who make enough money won't need the EITC. Those who say EITC benefits should be increased instead of raising the minimum wage place the responsibility for making work pay on the government instead of business, forcing taxpayers in effect to subsidize low-wage employers. Further, the federal EITC and the poverty thresholds are adjusted annually for increases in the cost of living but the New Jersey EITC and the minimum wage rate are not.⁵², ⁵³

Prices Will Rise

Price is determined by supply and demand and is also dependent upon what consumers are willing to pay. Wages are just one factor contributing to the cost of an item. Other factors include transportation, equipment, rent, advertising, business location, employee recruitment and training and consumer income.⁵⁴

Taking all of this into consideration, the Brennan Center for Justice at NYU Law School found that if Wal-Mart gave all of its workers a raise of $1 an hour, the impact on prices would be half of one cent.⁵⁵ Nationally, the retail industry employs more than half the workers paid at or below minimum wage-and retail profits increased more than average profits for all industries. From 1968 to 2000, retail profits went up 158 percent.⁵⁶

Consumers worried about prices might look not at hourly employees, who are paid the least, but at top management who make the most. Earnings inequities between CEOs and rank-and-file workers are increasing rapidly. In 1980, the average CEO at a major corporation made as much as 97 full-time minimum wage workers. In 2000, it took as many as 1,223 minimum wage workers to equal average CEO compensation.⁵⁷

Indeed, if the minimum wage had grown as much as CEO compensation-571 percent from 1990 to 2000-it would be $25.50 an hour.⁵⁸ In 2003, the median increase for an S&P 500 CEO was 22.18 percent. Four companies-Apple Computer, Oracle, Yahoo! and Colgate-Palmolive-increased CEO compensation by over 1,000 percent.⁵⁹

Since the first quarter of 2001, corporate profits in the U.S. have grown by 58 percent while private wage and salary income was dropping by almost 2 percent.⁶⁰

LIVING WAGE

The legally required minimum wage should not be mistaken for a "living wage," the amount of money a household needs to be self-sufficient. Raising the minimum wage is an important, necessary step toward an economy where everyone can build a future. But in the long run, New Jersey and the nation must confront the need to do more.

More than 110 U.S. cities and counties have enacted living wage laws over the past decade including Cumberland, Gloucester and Hudson Counties in New Jersey as well Jersey City and the city of Camden. In most cases living wages apply only to workers employed by a firm that is under contract to a government entity or in some other way receives public funds. The idea is that employers who benefit from tax dollars should not burden public social services systems by not paying their employees enough to live. Where living wage laws exist, employers generally are required to pay workers from $8.50 to $12.00 an hour and in some cases must also provide additional benefits such as health insurance, vacation time, pensions, training and/or cost of living adjustments.⁶¹

A few cities have enacted broader living wage ordinances to which all large private businesses must comply as well. They include Santa Fe, NM, San Francisco, Madison, Wisc. and Washington, DC.⁶²

As New Jersey considers a higher state minimum wage, it should ensure that the ability of local governments to respond to higher costs of living and other specified local needs is not undermined. Hudson County's living wage law, for example, was recently invalidated by a lower court that ruled the ordinance conflicted with the state minimum wage law. The decision is under appeal.⁶³ This decision ignored a long legal tradition in New Jersey of respecting the power of local communities to enact ordinances regarding labor regulation that meet local needs. Any minimum wage legislation in New Jersey should clarify that only where the Legislature clearly states that it tends to preempt higher labor standards or alternative regulation at the local level will local power be supplanted.

Some living wage laws include a provision requiring higher hourly compensation for workers who do not get health coverage.

CONCLUSION

Work should be the means for someone to earn a livelihood and build for the future. But a minimum wage worker in New Jersey can barely survive.

An increase in the minimum wage is long overdue. The minimum wage in New Jersey is $5.15 an hour, unchanged since 1999. It is the same as the federal minimum wage, yet New Jersey's cost of living is nearly a third higher than the national average.⁶⁴ Once, New Jersey's minimum wage was the highest in the nation. It is time for New Jersey to again set the standard. This state should never consider the federal wage appropriate. It does not make sense for New Jersey to rank as the country's fourth most expensive place to live and have the same minimum wage rate as states with the lowest costs of living, such as Arkansas and Oklahoma.

New Jersey, which spends millions of dollars a year competing with neighboring states to try to attract businesses, is falling behind those states when it comes to assuring that workers make enough to live. Six states in the Northeast-Massachusetts, Connecticut, Maine, Delaware, Rhode Island and Vermont-plus Washington, DC and potentially New York-have a higher state minimum wage than New Jersey.

Polls clearly show the majority of Americans favor increasing the minimum wage. In a Christian Science Monitor poll, 75 percent supported an increase.⁶⁵ A poll conducted for the Ms. Foundation found that 77 percent of likely voters support raising the minimum wage to $8.00 an hour and 79 percent support adjusting the minimum wage for inflation.⁶⁶ And in January 2004, a Pew Research Center survey found that 77 percent of adults surveyed believe that increasing the federal minimum wage should be a priority for the president and Congress.⁶⁷

The government must set the standard by raising the minimum wage and requiring businesses to provide certain benefits, including adequate wages, health insurance or other basics. This protects workers, good employers and the public. Unscrupulous employers should not be able to take advantage of government assistance for employees who cannot provide for themselves because their jobs don't pay enough or provide adequate benefits. Nor should they undercut socially responsible businesses that might have higher costs and charge higher prices because they provide for their employees.

In addition, owners of businesses large and small across the country have enjoyed several years of tax cuts. Low-income workers, whose wages buy less than they used to while prices rise, should benefit too.

Increasing the minimum wage would improve the wellbeing of New Jersey's citizens and the state's economy. Americans widely share the belief that people should earn their own way if they can. A job should make it possible for a worker to do just that. The goals should be profitability for companies and self-sufficiency for individuals.

"We're workin' our jobs, collect our pay
Believe we're gliding down the highway,
When in fact we're slip slidin' away"⁶⁸

ENDNOTES

1. U.S. Department of Labor. Employment Standards Administration. Wage and Hour Division. "The Fair Labor Standards Act of 1938, as Amended." WH Publication 1318. Revised March 2004.
2. <www.1960s flashback.com/1968/Economy.asp>
3. CNN Money. "New home sales surge". September 27, 2004. <money.cnn.com/2004/09/27/news/economy/newhomes>
4. <www.1960s flashback.com/1968/Economy.asp>
5. Energy Information Administration. <www.eia.doe.gov>
6. Bernstein, Jared and John Schmitt. "Making work pay: The impact of the 1996-97 minimum wage increase." Washington, DC: Economic Policy Institute. 1998.
7. Ibid.
8. Russell Sage Foundation. "Forum on the future of work: beyond the unemployment figures." Transcript. May 27, 2004.
9. P.L. 1933, c. 152
10. Corrales, Robert. Public Information Officer for New Jersey Department of Labor and Workforce Development. E-mail of October 18, 2004.
11. P.L. 1966, c. 113
12. Southern New Jersey District Office. U.S. Department of Labor. ESA Wage & Hour Division. Contacted September 2, 2004.
13. U.S. Bureau of Labor Statistics. <www.bls.gov/cps/minwage2003tbls.htm#3>
14. ACCRA data on Missouri Economic Research and Information Center Web site. <www.ded.mo.gov/business/researchandplanning/indicators/cost_of_living/index.shtml>
15. Ibid.
16. Ibid.
17. Boushey, Heather, Chauna Brocht, Bethney Gundersen, and Jared Bernstein. Hardships in America: The Real Story of Working Families. Economic Policy Institute. 2001.
18. Pearce, Diana and Jennifer Brooks. "The real cost of living in 2002: the self-sufficiency standard for New Jersey." Prepared for Legal Services of New Jersey, Poverty Research Institute. June 2002.
19. National Low Income Housing Coalition. "Out of Reach 2003: America's housing wage climbs." Accessed September 2, 2004. <www.nlihc.org/oor2003/data.php?getstate=on&state%5B%5D=NJ>
20. Ibid.
21. ------. "The living-wage movement: good social policy or self-defeating?" Wharton School, University of Pennsylvania. November 10, 1999.
22. Universal Living Wage. "Globalization and labor." March 11, 2004.
23. U.S. Bureau of Labor Statistics <ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt>
24. Chasanov, Amy. "No longer getting by: an increase in the minimum wage is long overdue." Economic Policy Institute Briefing Paper. May 11, 2004.
25. U.S. Bureau of Labor Statistics. <www.bls.gov/oes/home.htm>
26. Economic Policy Institute analysis of 2003 Current Population Survey data
27. Ibid.
28. Mishel, Lawrence, Jared Bernstein and Sylvia Allegretto. The State of Working America, 2004-05. Economic Policy Institute. New York: ILR Press. September 5, 2004.
29. Economic Policy Institute analysis of 2003 Current Population Survey data
30. Parrott, James and Oliver Cooke. "Raising the minimum wage in New York: helping working families and improving the state's economy." Fiscal Policy Institute. January 11, 2004 and Spriggs, William and Bruce Klein. "Raising the floor: the effects of the minimum wage on low-wage workers." Economic Policy Institute. 1994.
31. Economic Policy Institute analysis of 2003 Current Population Survey data
32. Card, David and Alan B. Krueger. Myth and Measurement: The New Economics of the Minimum Wage. Princeton University Press. 1995.
33. Sklar, Holly, Laryssa Mykyta, and Susan Wefald. Raise the Floor: Wages and Policies that Work for All of Us. Cambridge, MA: Ms. Foundation for Women. 2001.
34. Parrott, James and Oliver Cooke. "State minimum wages and employment in small businesses." Fiscal Policy Institute. April 20, 2004.
35. Bounds, Gwendolyn. "Argument for minimum-wage boost." The Wall Street Journal. July 27, 2004.
36. Russell Sage Foundation. "Forum on the future of work: beyond the unemployment figures." Transcript. May 27, 2004.
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