New Jersey’s Democratic governor and legislative leaders have reached a highly anticipated agreement to raise the state’s minimum wage to $15 an hour for most workers by 2024.
Under the deal, many workers would see their wages rise gradually to a $15 an hour, though some, including those employed by small businesses with five or fewer employees, will have to wait longer.
The deal had been held up by a disagreement over which workers should receive $15 an hour and when.
Gov. Phil Murphy called for $15 for all, while his fellow Democrats who lead the state Legislature — Senate President Stephen Sweeney and Assembly Speaker Craig Coughlin — said there must be exceptions made for some employers, including small businesses and farmers. This tension had stalled progress on one of the Democrats’ top priorities.
“I’m sorry it took as long as it did, but I think we came up with a really good compromise,” Sweeney, D-Gloucester, told NJ Advance Media. “It took forever, but we got it done.”
The breakthrough announced Thursday is a plan to raise the standard minimum wage to $10 an hour on July 1, $11 an hour in 2020, $12 an hour in 2021, $13 in 2022, $14 in 2023 and $15 in 2024.
“This is a big, big step forward for New Jersey. And particularly, it’s responsible,” Murphy said during a virtual town hall. “We are changing the lives of a million workers in this state. I can’t stress that enough.”
The impact of the deal is far-reaching. New Jersey Policy Perspective, a liberal Trenton think tank, estimated more than 1 million workers will benefit from the wage hike. But about 10 percent of those employees will be put on a slower path.
Seasonal workers and small business employees won’t reach $15 an hour until 2026. Farm workers will hit $12.50 in 2024, after which it would be left up to state officials in the executive branch whether to keep going to $15 an hour by 2027.
A bill still must be passed by the state Senate and Assembly and signed into law by the governor. The Democrat-controlled Legislature hopes to vote on the measure by the end of the month, according to one legislative source.
Murphy said he’s pleased to clear the deck and “focus on new priorities” — such as legalizing recreational marijuana in the state.
“The highest priority I had for 2019 was minimum wage getting to $15,” he said. “As of today, we have that deal sealed.”
Murphy has said a big increase in the minimum wage is needed begin closing a wealth gap that is 13th widest in the U.S. New Jersey has one of the highest median incomes in the country, but one in 10 residents live under the federal poverty line, which measures only extreme poverty.
Advocates say $15 an hour will boost incomes closer to workers need to afford basic expenses in New Jersey. Someone working 40 hours a week at the current minimum wage, $8.85 an hour, will earn $354 a week, or $18,408 a year. At $15 an hour, that same worker will earn $600 a week and $31,200 a year.
Annual adjustments for inflation will resume once workers reach $15 an hour. New Jersey employees on one of the slower paths will receive even bigger inflationary adjustments to help them catch up.
But advocates for low-income workers warned that without that provision the state would create a permanent underclass.
Teen workers who lobbied hard to be included on the standard track will arrive at $15 an hour in 2024. The tipped wage will rise gradually from $2.13 an hour to $5.13. That wage, combined with a worker’s tips, must equal the standard hourly minimum.
“We applaud the inclusion of teen workers, who were at risk of being carved out of this legislation, as their work is just as valuable to the economy and their families as anyone else’s,” said Brandon McKoy, director of government affairs for New Jersey Policy Perspective.
“For the state’s agricultural and tipped workers, there remains more work to be done,” McKoy added.
The New Jersey Business and Industry Association, which represents 20,000 businesses, said he announcement is “another hit” to small businesses trying to absorb new rules, like paid sick leave, energy costs and higher personal and corporate state tax rates.
“Most small business owners pay what they can afford their workers. Now that it’s a mandate, it’s inevitable that some of those with the smallest profit margins will struggle, stagnate or simply fail,” NJBIA President Michele Siekerka said in a statement.
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