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| For Release November 8, 2004 | Contact Jon Shure 609-393-1145 |
and Tied to Cost of Living
TRENTON-New Jersey's minimum wage used to be the highest in the nation-and it should be again, according to a report that calls for an increase to at least $7.50 an hour and tying the wage to the cost of living so it automatically rises every year.
Slip Slidin' Away: $5.15 an Hour is Not Enough details the erosion in buying power of the minimum wage and points out that hundreds of thousands of working New Jerseyans are having trouble supporting their families because the minimum wage is so low.
Though its cost of living is a third higher than the national average, New Jersey ranks sixth in the country in terms of the percentage of workers making $5.15 an hour or less. According to the Current Population Survey of 2003 averages put out by the federal Bureau of Labor Statistics (BLS) 75,000 New Jersey workers are paid $5.15 an hour or less. None of the 15 states with the highest percentage of workers making at or under $5.15 has a cost of living as high as New Jersey's.
NJPP President Jon Shure said, "Workers are not getting what they need or deserve. If the minimum wage in the 1990s had risen at the same rate as CEO pay it would now be $24 an hour."
The report, written by NJPP Policy Analyst Susan J. Bottino, notes that someone working a full year at minimum wage makes $10,712, far below what it really costs to live in New Jersey. According to one study, a single parent with an infant needs to earn from $13.29 an hour in Camden Country to $19.87 in Hunterdon County.
Another way to look at the worth of the minimum wage is to compare it to the average wage of all workers who are paid by the hour. While the federal minimum wage was around 50 percent of the hourly wage in the 1950s and 1960s, by 2003 it had fallen to 33 percent-the lowest level since 1949. New Jersey's minimum wage in 2003 was about 26 percent of the state average hourly wage of $19.72. Indeed, between 2001 and 2003, the state's average hourly wage rose by 97 cents, while the minimum wage stood still.
According to 2003 data, 75,000 New Jersey workers make $5.15 an hour or less and a total of 307,000 workers now make less than $7.50 an hour-8.3 percent of the state's workforce.
Nearly 60 percent of those are women. Just over 40 percent are black or Hispanic. Nearly 80 percent are age 20 or older. Nearly half work full-time. The typical worker who would benefit directly from raising New Jersey's minimum wage is employed in retail or the leisure and hospitality trade, performing a sales or service job. Service workers include a diverse group of occupations such as home health aides, food preparation workers, building and grounds maintenance, and hairstylists.
In addition to raising the pay for minimum wage workers, an increase in the minimum wage would indirectly affect workers earning just over the minimum wage. The pushup effect is likely to mean raises for an additional 189,000 workers, those now making between $7.50 and $8.50 an hour. Of these, 67 percent work full-time and 88 percent are 20 or older. So the total number of workers affected by an increase in the minimum wage to $7.50 an hour would be over 496,000.
New Jersey used to be among states with a minimum wage higher than the federal level. In 1992 it was increased to $5.05-then the highest in the nation-while the federal wage was $4.25. In 1999, the state adopted a law requiring that the state minimum wage not exceed the federal level-which at the time was the current $5.15-or go below it.
Today, 12 states and Washington, D.C. exceed the federal minimum wage. On Election Day, voters in two other states passed minimum wage measures. In Florida, an increase to $6.15 an hour was approved. In Nevada, a ballot initiative won that, if passed again in 2006, would increase the state's minimum wage to $6.15 an hour in 2007. New York's minimum wage could also rise above the federal level. The legislature passed an increase to $7.15 and is considering an override of Gov. George Pataki's veto.
"Many of the highest minimum wage states are New Jersey's neighbors, and there's irony in that," Shure said. "New Jersey spends millions of dollars of tax money every year competing with those states to get business to come here, but we don't do enough to make sure working people can live here."
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