(January 21, 2019)--In an Op-Ed that appeared in ROI-NJ on Friday, NJBIA President and CEO Michele Siekerka called the agreement announced last week by Gov. Phil Murphy and legislative leadership to raise the minimum wage to $15 as "far from economically responsible."
Siekerka first notes the cumulative expenses already absorbed by small businesses in New Jersey - including "costly mandates, expensive compliance regulations, more subsidies for energy delivery and increased taxes as a means to balance the state budget. For this, New Jersey ranks dead last for business friendliness before we even get to a $15 minimum wage."
Additionally, under the current agreement, the entry-level wage will be increased by $2.15 an hour within a year – a total increase of 32 percent within that year for small business owners when adding payroll taxes and unemployment insurance.
In the OpEd, Siekerka also calls for:
· An economic analysis of the annual increases on the state's economy and job creation. Such a provision would give the state the ability to freeze a scheduled increase during an economic downturn or after a natural disaster, like Superstorm Sandy.
· A tax credit to address overall compensation with more employers likely to drop employee health benefits plans to adjust for the increase in wages.
· Exemptions or tax credits for Medicaid providers, who will be reimbursed less than New Jersey's minimum wage for their services.
· A small business exemption for businesses with 10 employees or less.
· Exemptions for seasonal workers for all seasons.
· Complementary legislation that would provide tax relief for companies who invest in their employees by funding workforce development.
"The danger in artificially raising entry-level wages without raising skills — as this proposal does — is those employees lacking skills will be left behind," Siekerka said.
"The fact is that small business owners pay their employees what they can afford," she added. "They want the best workers who can provide the best products and services to be competitive, with a full understanding of their own budget. The economic pie is only so big for small business owners and the slices continue to get smaller.
"We call upon the governor and our legislative leadership to hit the pause button and take a deeper look into these consequences before pulling the trigger on such a significant piece of legislation that has long lasting ramifications for New Jersey's economy."
The OpEd on ROI-NJ can be found here.