How the minimum wage increase hurts all of us in NJ

Unless you’ve been living in a plastic bubble, you know that Gov. Murphy signed a bill into law that will raise the minimum-wage to $12 by the end of this week, eventually increasing to $15 by 2024. While the idea of a raise in minimum wage might sound good in theory, in execution it’s a bad idea for everyone in New Jersey.

It’s obvious why it’s bad for business, especially during COVID-19. People can’t afford to keep employees on at all, let alone pay them more what they were paying before.

"OK," you may think, but it’s great for employees! Now they can feed their families! But that’s actually not true. People who need to feed family should not be working at minimum wage jobs, at least for the most part. The idea of a minimum wage came about so that people who were just starting out in the workforce in entry level jobs could get a fair wage and would not be underpaid for their work. But minimum wage is supposed to be just that— minimum.

It’s not supposed to be relied on as a career-long salary. It’s supposed to be a starting-off point from which you launch a career with a higher salary and from there even higher, and so on and so on. So what you actually do when you mandate a minimum wage increase is take away someone’s motivation to improve their lot in life. You create a situation where people can become complacent working in entry-level jobs forever, not realizing that there’s more out there and that this small hourly minimum wage is not designed to help you raise a family, buy a house, save for the future, invest for retirement, etc.

Then, of course, there’s the consumer piece. Once you raise the minimum-wage and force employers to pay more, they end up passing the increases along to the consumer. The cost of goods is now more, which effectively cancels out the small salary boost that raising the minimum wage provides.

It’s a bad idea to raise the minimum-wage. It’s a better idea to “cut your teeth” and hone your skills in a minimum wage job and then strive for more. There’s a reason for a reasonable minimum wage but it should be just that—minimum. Raising it, especially to the level that Murphy did, is a punishment to employers, businesses, and consumers, with only a marginal and temporary benefit to employees.

The post above reflects the thoughts and observations of New Jersey 101.5 talk show host Judi Franco. Any opinions expressed are Judi's own.