Debate over N.J. minimum wage in Tuesday's election

Increasing New Jersey's minimum wage now and through annual cost-of-living raises will help workers and boost the economy. Or it will force businesses to increase prices and cut hours, hurting consumers and workers.

Through radio ads, pamphlets, and news conferences, dueling campaigns are trying to reach voters about a ballot question that would amend the state constitution to increase the minimum wage by $1, to $8.25 an hour, and tie future increases to the Consumer Price Index. Voters will decide the measure Tuesday.

Polls show New Jerseyans favor increasing the state's minimum wage, currently the same as the federal minimum of $7.25 an hour. A Monmouth University/Asbury Park Press poll conducted last month found 65 percent of registered voters who responded supported the proposed increase and incorporating future cost-of-living increases.

If the measure passes, New Jersey will join 18 states and the District of Columbia that have minimum wages above the federal level. A national nonprofit organization funded partly by the restaurant industry and managed by Washington lobbyist Richard Berman's firm, the Employment Policies Institute, has run television and radio ads against the ballot question, saying a higher wage would reduce opportunities for entry-level workers and wouldn't diminish poverty.

Backers of the proposal - who say workers can't survive on $7.25 an hour in high-cost New Jersey - have been working to ensure that popular support for raising the wage translates to votes for Question 2 on the ballot.

"Part of our challenge has been voter education, to make sure New Jerseyans know they can vote to raise the minimum wage," said Paul Penna, campaign manager for the Raise the Wage Campaign, a coalition of labor and community groups.

Though voters may be accustomed to ballot questions on bond issues, Penna said, "we don't generally decide policy issues via the ballot box."

The Legislature passed a bill that would have increased the minimum wage to $8.50, with annual cost-of-living increases, but Gov. Christie vetoed the measure.

Christie said he would have supported a $1 increase phased in over three years - a proposal the New Jersey Chamber of Commerce also supported, said chamber president Thomas Bracken.

The issue, Bracken said, is the "three-in-one" question. "Do not link it to the CPI, and absolutely do not link it to the constitution," said Bracken, spokesman for a coalition of business groups forming the No on 2 Campaign.

The campaign is urging voters who support an increase to vote no, arguing that legislators will still pass a law to raise the wage, but without automatic annual increases, which Bracken said would "take a major decision out of the hands of business people."

Penna said the Legislature hadn't raised the wage for four years, since the federal minimum became law. Approving the ballot question, he said, "is certainly better" than waiting for lawmakers to pass an increase.

In addition to arguing against automatic increases, Bracken said it was a bad idea to tie increases to the Consumer Price Index, saying that if New Jersey's economy didn't do as well as the nation's, the state would still have to raise its wage.

The proposal "will make the state of New Jersey much less competitive," Bracken said. "We've been told that by many ratings agencies." To compensate for higher wage costs, Bracken said, businesses would have to increase prices, cut hours, or cut jobs entirely. A report released by the Employment Policies Institute projects up to 4,700 jobs lost in New Jersey.

"None of those options are good for the majority of New Jerseyans," Bracken said. He will debate Democratic lieutenant governor candidate Milly Silva on the minimum wage on WNYC-FM radio on Monday morning.

Supporters of the ballot question dismiss the arguments as fearmongering by business lobbyists.

They say minimum-wage increases have no discernible effect on unemployment levels - but will boost consumer spending.

"What small businesses need are more customers who have more money to spend," said Jon Whiten, deputy director of the New Jersey Policy Perspective, a liberal-leaning think tank.

The New Jersey Main Street Alliance, which represents 1,400 small-business owners, released a video last week with owners voicing support for an increase. "That means that I can make more money if people are spending more," one owner says.

Raising the wage would add $175 million to the gross domestic product next year, an increase felt mainly in New Jersey, according to a New Jersey Policy Perspective report.

But that boost wouldn't be a windfall within "a $500 billion economy" in New Jersey, Bracken said. Relatively few workers would be affected by the increase, he said: Of about 41,000 minimum-wage earners in the state, between 7,000 and 10,000 are their family's primary source of income.

Whiten called that analysis "incredibly misleading." Including workers who make less than $8.25 an hour but more than minimum wage, 241,000 New Jerseyans would get a raise Jan. 1, Whiten said.

Because workers who make up to $9.25 an hour would receive future wage increases, 429,000 people - 11 percent of the state's workforce - would be affected, Whiten said. He said Bracken's concerns about the national CPI were unfounded, saying a regional measure would be more erratic, although the two measures wouldn't vary much over the long term.

Though the minimum-wage question has drawn the most attention, voters also will be asked to decide whether veterans organizations can use proceeds from games of chance to pay for operating costs, not only for events or charitable purposes.

John Baker, department adjutant of the American Legion of New Jersey, said some legion posts were financially strapped. Post homes that have bingo games or pull-tabs could use the money for bills and repairs, Baker said.

"We want to be able to maintain the buildings, so the buildings can be used by the community," he said, adding that the measure "is not going to affect the general taxpayer."