Who Deserves a 'Living Wage?'

A divided New Jersey commission asked the Legislature and governor to index the state’s minimum wage to inflation.

• By Jerry Laws
• Mar 01, 2008

Safety, productivity, alertness, and quality are tightly linked with job satisfaction. But does this mean state governments should ensure a “living wage”?

The first annual report of the New Jersey Minimum Wage Advisory Commission, dated Dec. 21, 2007, has set up what promises to be a heated debate about the role of states in ensuring a “living wage” for their “working poor” residents in the 21st Century and may set New Jersey on a path to become the bellwether state in the Northeast for ever-higher minimum wages. The commission, chaired by state Labor and Workforce Development Commissioner David Socolow, recommends an immediate $1.10 per hour increase in the state’s current $7.15 minimum wage, plus automatic cost of living increases, plus indexing the state’s minimum wage to the Consumer Price Index for urban consumers in the Northeast Metropolitan Region.

The recommended $8.25 per hour was the poverty threshold wage for a three-person family in 2007, the panel said in its report. Socolow sided with the commission’s two organized labor representatives in voting for the recommendations; the other two commissioners are business representatives. JoAnn Trezza, the HR vice president of Arrow Group Industries, which makes storage buildings, agreed with raising the state’s minimum to $8.25 but wants this done in stages, while the New Jersey Business and Industry Association’s president, Philip Kirschner, opposed $8.25 and annual indexing. “Small businesses that rely on entry level minimum wage employment simply cannot afford this increase in a single step,” Kirschner wrote. Automatic indexing would make New Jersey’s businesses unable to compete with those in every neighboring state because they do not index their minimum wages, he added. (States that index annually are Arizona, Colorado, Florida, Missouri, Montana, Nevada, Ohio, Oregon, Vermont, and Washington State. Keep in mind, New Jersey has a higher cost of living and higher housing costs than most of these.) The federal minimum wage will rise to $7.25 in 2009.

As Kirschner pointed out, raising New Jersey’s minimum will eventually affect all businesses in the state by leading to higher unemployment payments, temporary disability payments, and worker’s comp rates. The end result may be a good swap: fewer businesses paying more to fewer, but safer and healthier, workers.

This article originally appeared in the March 2008 issue of Occupational Health & Safety.