The 2006 edition declares, “…some surprising economic research published in the 1990s cast serious doubt on this conventional wisdom.” Indeed, said Blinder to a Bloomberg reporter in 2006: “My thinking on this has changed dramatically. The evidence appears to be against the simple-minded theory that a modest increase in the minimum wage causes substantial job loss.”
Blinder is not alone. Two years ago, more than 650 economists, including five Nobel Prize winners, signed a statement saying state and federal minimum wage increases can “significantly improve the lives of low-income workers and their families, without the adverse effects that critics have claimed.”
And yet there are still those who insist that paying people enough to live is bad for the economy. That’s one reason why an overdue increase in New Jersey’s minimum wage is on hold as legislative leaders bow to business lobbyists’ objections. The state wage rose to $7.15 an hour in 2006, with legislation that also created a Minimum Wage Advisory Commission to take on the yearly task of evaluating the adequacy of the state minimum wage.
In December, the Commission issued its first report. It said the wage was inadequate and called for an increase to $8.25, as well as a new system of annual increases to keep up purchasing power. Today, 10 states have automatic raises, a good way of taking minimum wage decisions out of the political realm and base them instead on economic realities.
But the Legislature chose to ignore the Commission it created. Bills raising the wage, introduced in January, failed to move. Not a single hearing was held. The Legislature took off after passing the state budget in June and hasn’t been heard from since. Unfortunately, the cost of living doesn’t take a vacation. Every day, low-wage workers in New Jersey fall further behind in their quest to support a family and build a future.
In the meantime, we hear tired, old arguments against raising the minimum wage. We hear that most people who make that little are teenagers, when in fact 80 percent are over 20. We hear that skills training and education make more sense than government-mandated wage levels. Of course, training and education are important. But our society will always need waitresses, janitors and home health aides. Shouldn’t they be able to support a family?
We hear a recession is the wrong time to raise wages (and we hear it from people who didn’t think the boom years were the right time either). And yet, what could be a more surefire economic stimulus than putting money into the hands of the people who are most likely to spend it quickly?
Jon Shure is president of New Jersey Public Policy Perspective in Trenton. NJPP is a nonprofit organization that conducts research on state issues.
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