Monday, October 15, 2012
SWEENEY CONSTITUTIONAL AMENDMENT RESOLUTION RAISING MINIMUM WAGE CLEARS COMMITTEE
Initiative Would Be Placed on Ballot in 2013
TRENTON – A Senate resolution sponsored by Senate President Steve Sweeney (D – Gloucester, Salem, Cumberland) that would call for a constitutional amendment to raise the state’s minimum wage and tie further increases to the Consumer Price Index (CPI) cleared the Senate Budget and Appropriations Committee today. The initiative would be placed on the 2013 ballot for voter approval.
“For years, New Jersey has assigned a dollar amount to the minimum wage that is woefully inadequate,” said Sweeney, who testified before the Committee. “In fact, it is a complete failure. According to a 2011 analysis by the Office of Legislative Services, among the 307,000 workers in New Jersey who earned among the lowest hourly wages, nearly half worked full-time and one-quarter were parents. Imagine trying to feed a family, pay the rent and keep gas in the car on less than $16,000 a year.”
Under the resolution, the state’s minimum wage would be increased from the current rate of $7.25 an hour to $8.25 an hour beginning January 1, 2014. After that, any increase in the minimum wage would be indexed to the annual CPI. Voters would get to decide the issue in 2013.
According to the Office of Legislative Services, ten states, representing 21% of the nation’s workforce, have indexed their minimum wage to changes in the CPI: Arizona, Colorado, Florida, Nevada, Ohio, Oregon, Missouri, Montana, Vermont, and Washington. Every one of those states, except Vermont, adopted an indexed minimum wage by ballot initiative.
As of January 1, 2012, 18 states, representing 43% of the nation’s workforce, have set minimum wages above the federal minimum of $7.25. These 18 states are listed here with the nine states among them which have indexed minimum wages bolded and italicized: Washington, $9.04; Oregon, $8.80; Vermont, $8.46; Nevada, Illinois and Connecticut, $8.25; California and Massachusetts, $8.00; Alaska, $7.75; Ohio, $7.70; Florida, $7.67; Arizona and Montana, $7.65; Colorado, $7.64; Maine and New Mexico, $7.50; and Rhode Island and Michigan, $7.40.
The resolution now heads to the full Senate.
The Senate President’s testimony to the Committee is below:
Last month, I introduced legislation that would increase the minimum wage here in New Jersey and remove politicians from the process forever.
My bill would place on the ballot in 2013 an initiative that would raise the minimum wage to $8.25 beginning January 1st, 2014, then tie any increases moving forward to the annual CPI.
This is something that we must get done.
For years, New Jersey has assigned a dollar amount to the minimum wage that is woefully inadequate.
In fact, it is a complete failure.
There is a misperception out there that the minimum wage is for high school kids looking to make a few bucks over the summer.
That is entirely false.
According to a 2011 analysis by the Office of Legislative Services, among the 307,000 workers in New Jersey who earned among the lowest hourly wages, only 20 percent were teenagers.
Nearly half worked full-time and one-quarter were parents.
Imagine trying to feed a family, pay the rent and keep gas in the car on what, for most, amounts to less than $16,000 a year.
Many families are struggling at incomes twice or three times that.
And we know that New Jersey’s current minimum wage, and the means by which we increase it, is extremely unfair to women in this state.
According to the Current Population Survey data from 2011, over 61% of those making minimum wage or below in New Jersey are women (66,400).
Rutgers estimates that by raising the minimum wage, we can, in effect, raise the wages for 300,000 women in New Jersey.
That, in turn, will help close the wage gap that sees New Jersey women paid 79 cents for every one dollar made by their male counterparts.
And historically speaking, the percentage of minorities receiving minimum wage has been greater in proportion to the percentage of minorities that make up the total work force.
Meanwhile, as those at the lower end of the pay scale continue to struggle, the richest among us continue to get richer.
According to a recently released Census Bureau report, in the United States the median household income dropped 1.5% in the last two years.
While this was occurring, the top 1 percent of wage earners had a 6 percent increase in income in the last year, while earners in the bottom 80 percent of the income distribution mostly lost ground.
We see these results here in New Jersey.
According to Legal Services, the number of people living in poverty in this state has increased, from 8.7% in 2007 to 11.4% in 2011.
New Jersey Policy Perspective estimates that approximately 79,000 people were forced out of the middle class in New Jersey over the last few years.
This, frankly, is embarrassing.
I am not claiming that a minimum wage increase will cure all of these problems, but there is absolutely no denying that it would go a long ways in helping.
The current minimum wage is simply not enough, especially considering we live in one of the nation’s most expensive states, with housing costs among the highest anywhere.
It’s bad enough that we have dragged our feet in terms of raising wages for those at the very bottom of the economic ladder, but even more so that we have left the minimum wage to the whims of politics.
That is why an increase not only needs to happen, but it must be tied to the Consumer Price Index, so that it goes up whenever it is necessary.
Plus, as noted by the Economic Policy Institute, when the minimum wage goes up, it has a spillover effect that helps increase wages for other workers.
Moreover, fears that a tie in to the CPI will cause economic turmoil are simply unfounded.
The CPI is a way to ensure the minimum wage keeps pace with reality…so even the most modest of incomes is not rendered meaningless by the cost of living.
When the CPI remains steady or drops -- as we saw in the last recession -- we aren’t going to be seeing minimum wage increases.
This will help safeguard businesses from untimely spikes, while still ensuring that in the future, workers will be protected.
Indexing the minimum wage to inflation and taking it out of the hands of legislators and governors is something I had hoped to do in 2005, only to see it stripped from the final law.
But consider this: If we had indexed the minimum wage from the start, it would today be $9.20 — nearly a dollar more than I am now proposing.
Already, those opposed to taking the minimum wage out of the political arena have begun to voice their opposition, including Governor Christie.
The governor and I have worked together on several important initiatives, but on this fundamental issue, he is out of touch with the needs of working-class New Jersey.
Ensuring some basic standard of living shouldn’t be left in the hands of partisan legislatures and governors to debate only when the minimum wage stops meeting the needs of the workers it is intended to help.
Ten states have already passed measures increasing the minimum wage through tie-ins with the CPI.
They include such bastions of liberalism as Arizona, where it passed with 66% of the vote, Missouri, where it passed with 76% of the vote, and Montana, where it passed with 73% of the vote.
In Colorado, Florida, Nevada, and Ohio, residents were asked to amend the state constitution to guarantee a minimum wage that would keep pace with inflation.
It passed each time, with the highest margins of victory coming from such liberal heartlands as Florida (72%) and Nevada (69%).
We have amended the state constitution to legalize bingo games and casino gambling, to allow senior citizens and veterans to enjoy a guarantee of property-tax relief and to dedicate and rededicate tax money for specific purposes.
Surely that means there is room to ensure that those on the lower edges of the pay scale can secure some kind of constant, consistent wage increase.
We’ve waited too long to do this.
The time to act is now.
Let us finally, once and for all, take this issue out of the hands of politics and politicians and give hard working people in this state what they need.