Vote 'no' on minimum-wage hike

By Thomas A. Bracken

If New Jersey is going to solve its fiscal problems, we need to expand our private business sector. Happily, for the past three years, we have seen positive strides in our business community in the form of job growth - thanks to smart policies out of Trenton like reducing business taxes and offering targeted incentives for employers. This is a testament to the teamwork of Gov. Christie and the legislators who have made it a priority to build the economy, create jobs, and make New Jersey a more competitive business state.

Now, we face an issue in which the governor and the Legislature are at odds - and it can reverse the positive momentum. The issue comes to a head on Election Day, and you can do something about it.

A question on the ballot will ask voters to approve an amendment to the New Jersey Constitution that would mandate annual increases to the state's minimum wage. This question should not be taken lightly. The plan, as presented by the Legislature, calls for annual increases to the minimum wage tied to the national Consumer Price Index. By opening the state constitution to automate these pay increases, raises would be given every year in perpetuity, no matter the condition of the state economy.

This is the proposal voters will be asked to consider in Ballot Question No. 2. If you care about the economy, you should vote "no."

To be clear, the state Chamber of Commerce is not opposed to raising the minimum wage. Earlier this year, Christie and the business community negotiated a proposal that would have phased in a $1 - or a 14 percent - increase to the $7.25 minimum wage over three years, but the Legislature wouldn't consider the compromise.

What we oppose is using the state constitution to institutionalize private-sector fiscal decisions. Under this amendment, the minimum wage would be permanently taken out of the hands of future administrations, legislators, and employers. Annual raises would be automatically granted without considering whether the economy is strong or weak, or whether the market warrants the increases.

We have cautioned the Legislature that mandating raises this sharply, and in perpetuity, would have a chilling effect on economic growth - especially in the wake of Superstorm Sandy. It would cause already cautious employers to cut jobs and reduce hours. Any business thinking of relocating to our state - and bringing new jobs with it - would undoubtedly think twice when it sees the level of government intrusion into the private sector that this amendment represents.

A study sponsored by a coalition of businesses and the state chamber this year estimated 31,000 jobs would be lost if the ballot question were approved. This is neither responsible governing nor in the public good, which our constitution guarantees.

Keep in mind, of the state's 40,000 workers earning minimum wage, half are teenagers. A much lower number - 4,500 to 10,000 - are their family's primary wage earners. These workers - the primary beneficiaries of the ballot question - represent less than one-tenth of 1 percent of New Jersey's population.

National organizations that produce state-by-state business climate rankings have said that if this ballot question is approved, New Jersey's ranking, which has risen in each of the last three years, would drop to the dire levels of the Gov. Jon Corzine era.

Arguments that this plan would help the economy by pumping more money into it are misleading. This wage increase would add about $80 million per year in salaries. Even if all of it is pumped back into the economy through spending, it would have little impact on New Jersey's $500 billion economy. The wage increase equates to 17/100 of 1 percent of New Jersey's gross domestic product.

Do we want to enshrine something into our constitution that undermines New Jersey's competitiveness, has an unsettling effect on job growth, and assists few New Jerseyans?

The New Jersey chamber and the business community recognize that competitive wages are an important part of attracting and retaining a top-notch workforce. A fair minimum wage is a key component of this, and it should be set by our elected legislators and governor through debate and careful consideration - not automatically raised in perpetuity via a constitutional amendment.

Let's not derail our progress by adopting irresponsible policy.