NJ Raises Minimum Wage To $15 – But It Still Isn’t Enough To Live On

NEW JERSEY — Want to live in New Jersey? You need to earn about $64,463 per year to make a “living wage,” some experts say – and that’s without a family to raise. It’s a number that continues to rise along with inflation; the price of groceries has reportedly spiked 6.8 percent over the past year in the Garden State, for example.

And even if they work 2,080 hours per year – a 40-hour workweek with no days off – a New Jersey resident making minimum wage won’t reach half of that number.

On Jan. 1, New Jersey raised its minimum wage to $15.13 per hour, with some exceptions. The hike impacts about 350,000 of the state’s 1.9 million hourly workers.

The minimum wage was at $8.60 per hour when Gov. Phil Murphy took office in 2018, a statistic that he brought up at a roundtable discussion in Newark this week to announce the 2024 increase (watch the video below).

“I’m open-minded to consider what else we can do, particularly given where inflation may be headed,” the governor said.

Under a law signed in 2019, the New Jersey Department of Labor sets the state minimum wage each year, either calculating it based on the Consumer Price Index or according to the rate set out in the law, whichever is a higher amount.

It’s possible to work hard and still not earn enough to keep the wolves from the door, according to the United Way’s Asset Limited, Income Constrained, Employed (ALICE) database, which tries to shine a light on households that earn more than the federal poverty level – but not enough to afford the basics where they live.

There is a “fundamental mismatch between the cost of living and what jobs pay” in New Jersey, United For ALICE reports.

For example, 28 percent of retail salespersons – the most common occupation in the Garden State – lived below the ALICE threshold in 2021, earning a median hourly wage of $14.13, researchers say.

• See Related: 100-Hour Weeks To Afford Rent: How Expensive Is Living In NJ?

Another recent study from Rebel’s Guide to Project Management claims that New Jersey employees worked 162 percent more "unpaid overtime" hours last year, as compared to 2022 – about 220 hours per employee.

Many New Jersey employers continue to raise wages independently of the state's minimum wage, according to the New Jersey Business and Industry Association's 2024 "outlook survey."

In 2023, only 32 percent of respondents reported profits for the year. In 2022, that number was 36 percent. At the same time, 44 percent reported a loss, compared to 40 percent in 2022.

However, 34 percent of businesses increased pay for employees by 5 percent or more in 2023, the NJBIA reported. Overall, 78 percent of respondents to the survey said they increased wages in 2023.

“While it’s clear businesses are still struggling with inflation and the increased costs of running their operations, it does appear that last year represented a low water mark that we’re hopefully crawling out from,” NJBIA president and CEO Michele Siekerka said.

NJ MINIMUM WAGE: WHO IS NOT AFFECTED?

The minimum wage increase on Jan. 1 covered most employers and workers in New Jersey, but there are some exceptions.

Seasonal and small employers were given until 2026 to reach the $15 per hour benchmark, as state officials said this will lessen the impact on local businesses. In 2024, minimum wage for these businesses will go up $1 to $12.93 per hour.

Agricultural workers are guided by a separate minimum wage timetable, and were given until 2027 to reach the $15 per hour minimum wage. The hourly rate for these workers will increase from $11.05 to $12.01 in 2024. And long-term facility direct care staff will see their minimum wage rise by $1, up to $18.13 per hour, the state said.

And, cash wage for tipped workers will remain at $5.26/hour, with employers able to claim a $9.87 tip credit (an increase of $1). If the minimum cash wage plus an employee’s tips do not equal at least the state minimum wage, then the employer must pay the employee the difference.

• See Related: NJ To Surpass $15 Minimum Wage For Most Hourly Workers In 2024

ACROSS THE NATION

New Jersey isn’t the only state that is reaching the $15 per hour mark this year. Read More: 9.9 Million Minimum Wage Workers Will Get A Pay Raise On Jan. 1

According to a recent study from the Economic Policy Institute:

“In January, the minimum wages in Maryland, New Jersey, and upstate New York will reach or exceed $15 an hour for the first time, joining California, Connecticut, Massachusetts, Washington, and the rest of New York as states at or above $15 an hour. There are also seven more states that have passed legislation or ballot measures to reach or surpass $15 an hour in the coming years (Delaware, Florida, Hawaii, Illinois, Nebraska, Rhode Island, and Virginia). Washington state will have the highest state minimum wage at the beginning of the year as it increases from $15.74 to $16.28 due to an inflation adjustment.”

More than 17 million U.S. workers still earn less than $15 an hour, according to the analysis — nearly half of them in the 20 states that use the federal minimum wage of $7.25 an hour or have no minimum wage.

States with $7.25 minimum wages are Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, New Hampshire, North Carolina, North Dakota, Oklahoma, Pennsylvania, Texas, Utah, Wisconsin and Wyoming.

Alabama, Louisiana, Mississippi, South Carolina and Tennessee have no minimum wage.

At Wednesday’s news conference, Gov. Murphy said it is “a shame beyond any description” that the federal minimum wage remains at $7.25 per hour.

“Seven and a quarter is not just below poverty – it’s well below poverty,” Murphy said. “You’ve got people with no choice but to work two or three jobs as a result of that.”

This article contains reporting by Michelle Rotuno-Johnson and Beth Dalbey, Patch staff

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