New Year’s will bring some relief to New Jersey’s lowest paid workers when the minimum wage rises from $11 an hour to $12 an hour. This is the latest scheduled increase under the 2019 law to raise New Jersey’s minimum wage to $15 an hour, for most workers, by 2024. This raise will help workers better afford basic needs, ensure more families can cope with the increased financial pressures brought on by the COVID-19 pandemic, and better maintain the economic demand for goods that small businesses need to thrive.
Other low-wage workers will also see an increase in 2021. The minimum hourly wage for both seasonal workers and workers of small employers (businesses with five or fewer employees) will increase to $11.10. Meanwhile, farmworkers will see their minimum hourly wage increase to $10.44, and the tipped wage will increase to $4.13. Last year’s increase boosted the economic security of over 460,000 workers. For 2021, it’s unclear exactly how many workers will see an increase as the accuracy of estimates are complicated by the pandemic.
While this is a welcomed rise in wages, more work remains to be done to ensure that all workers can live with dignity, meet basic needs, and have an opportunity to thrive. For example, housing remains unaffordable for most minimum wage workers, making it difficult to afford other necessities like transportation and medical care.[1] And this crisis has exacerbated these problems for low-paid workers, who suffered the most from job losses in 2020.
Thankfully, New Jersey’s minimum wage law has positioned the state for a stronger pandemic recovery. In the years leading up to the pandemic, low-wage workers in states that raised their minimum wages experienced much faster wage growth than those in states that didn’t. Moreover, raising wages during recessions helps to both hasten and strengthen the economy’s recovery.
While we still have a long way to go to ensure that everyone can succeed in New Jersey, the latest increase to the minimum wage is a welcomed improvementduring these difficult times.
End Note
[1] National Low-Income Housing. 2020. Out of Reach 2020: New Jersey. https://reports.nlihc.org/oor/new-jersey
