$15 Minimum Wage: A Path to the Middle Class

On Monday, Feb. 4, 2019, NJ Governor Phil Murphy signed a bill that will gradually raise our state’s minimum wage to $15.00 an hour by 2024. The current state minimum wage is $8.85, and the first increase to $10.00 is scheduled for July 1, 2019.  The federal minimum wage is $7.25 and, despite many years of promises from Washington, there has been no legislative change to it since 2007. New Jersey joins a growing movement to address stagnant wages while productivity and profits have risen.

The new law promises to provide upward mobility to workers and help them join the middle class, while also strengthening the economy. Experts disagree over what impact the higher wage will have on the businesses, and some predict job loss. Studies are inconclusive, and only time will tell. Many major employers like Amazon and Target already pay well above the current minimum wage. Over 1 million employees, mostly at smaller companies, will benefit from the higher pay. New Jersey’s wealth gap is 13th widest in the U.S. It has one of the highest median incomes in the country but one in 10 residents also live under the federal poverty line, which measures only extreme poverty.

The bill includes some exceptions. For example, seasonal workers and small businesses with five or less workers, the base minimum wage won’t reach $15 an hour until 2026. For farm workers, the base minimum wage will increase to $12.50 by Jan. 1, 2024. Then, a special committee will review whether to raise those workers’ minimum wage to $15.00. The law also creates a training wage which would allow employers to pay new employees a sub-minimum wage — but no less than 90 percent of the minimum wage — for their first 120 hours of work.

February 4, 2019
Author: Paul DiGiorgio
Counsel, Wage and Hour Law
Practice Area Center: Employment Law
Practice Area Category: Wage and Hour