Are you getting a 9% raise Jan. 1? NJ minimum wage workers are (Opinion)
It would be a whopper of a raise for most people. Nearly 9%. I bet you’re not starting off the new year with such a bump. But minimum wage workers are.
The current minimum wage of $13 per hour increases on Jan. 1, 2023 to $14.13 per hour. Under the Murphy administration plan it will soon max out at $15.
I was never a fan of this. Sure it makes liberal progressives like Phil Murphy look good. They can virtue signal that they’re improving the lives of the poor. But are they?
High minimum wage increases are bound to increase costs of goods because it increases the cost to manufacture those goods. So higher prices help the poor?
George Reisman, PhD, Professor Emeritus of Economics at Pepperdine University, said it best when he said,
“The higher wages are, the higher costs of production are. The higher costs of production are, the higher prices are. The higher prices are, the smaller the quantities of goods and services demanded and the number of workers employed in producing them.”
Yes, ultimately it can cost jobs. It most definitely has been shown to reduce the number of hours given to employees making minimum wage. It’s a "one step up and two steps back" scenario.
Minimum wage jobs historically were jobs that required no skill set and often filled by people just starting out in the workforce. As you acquired skills, your value to a company increased and so did your pay. That’s how it ought to be.
How often have we heard advocates of the $15 an hour minimum wage speak in terms of it being too difficult for a family of four to get by when both parents are working for a lower minimum wage? In what universe should people be choosing to have babies when they’ve acquired zero skills to earn enough to raise one child let alone two?
There’s another issue though. Every time a minimum wage worker gets a mandatory raise, it’s setting the rest of us back. Pay scales being relative things, on Jan. 1 you’ll be set back by $1.13 an hour. You won’t be losing it per se, but if you were earning 12 dollars above minimum wage on Jan. 1 you’ll only be earning 10 dollars and 87 cents above. That matters. Prices will go up and you’ll be stagnant.
Further, the more we mandate higher minimum wages the more we run the risk of companies outsourcing jobs overseas or replacing human workers with robots and machines. The latter is certainly already being done. This policy accelerates the proliferation.
Small business is the backbone of an economy. How well will New Jersey’s small businesses be able to absorb this come Jan. 1? They may not be celebrating New Year’s Eve.
Opinions expressed in the post above are those of New Jersey 101.5 talk show host Jeff Deminski only.
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