Report: Minimum Wage Increase Would Boost NJ’s Economy

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STATE – According to a report released this week by the Economic Policy Institute, a proposal to raise New Jersey’s minimum wage would help the state’s economy and more than 300,000 New Jersey workers.

The state Assembly passed a bill yesterday that would raise New Jersey’s minimum wage from $7.25 per hour to $8.50 per hour and require future annual adjustments based on the Consumer Price Index. The state Senate has yet to vote on its version of the measure, which was referred to the Budget and Appropriations Committee in March.

While critics of the bill suggest that most minimum wage workers are middle class teens working for extra spending money, the EPI report finds that “more than four in five (85 percent) are 20 years of age or older, and nearly four in five (79 percent) work more than part-time (29 percent work mid-time, between 20 and 35 hours a week, and 50 percent work full-time, 35+ hours a week). More than 3 in 4 workers (76 percent) benefiting from an increase in the minimum wage have a high school diploma or more.”

The report also notes that more than 282,000 New Jersey children have a parent who would benefit from increasing the minimum wage.

The EPI analysis concludes that workers who benefit directly and indirectly (those who would see a slight pay raise to keep their salaries above the new minimum wage) would receive an additional $439 million in wages in the first year following a minimum wage increase. Spending during that time would raise New Jersey’s GDP by $278 million.

The EPI estimates that the equivalent of 2,420 full-time jobs would be created as a result of that GDP boost. “These jobs would be concentrated within New Jersey, since lower-income workers disproportionately spend their wages locally to meet the immediate needs of their families,” the report says.

 


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