New Jersey appears to be on the verge of raising the minimum wage; it's good news for the states lowest earners, but presents a potential challenge for business onwers.
New Jersey Senate President Steve Sweeney, State Assembly Speaker Craig Coughlin and New Jersey Governor Phil Murphy met at a Jersey diner to tout their agreement. They sat at a booth with the diner’s owner. Only the diner owner had some problems - like how is he supposed to make payroll and not raise prices? Things got a little awkward.
"We’re all excited about having reached an agreement to raise the minimum wage in New Jersey responsibly over time to $15 an hour," said New Jersey Governor Phil Murphy. "It's the right thing to do."
Speaker Coughlin asked Teddy Lutas, the owner of the Ocean Bay Diner in Sayreville, if he had any problems with the wage hike.
"When people come in, they're going to pay $5 hamburger," he said. "Now, they’re going to pay $10. Because you have a waitress making $15 an hour, the payroll is going to be triple."
Tipped workers currently make a minimum wage of $2.13 an hour. Under the proposed law, their wages would increase $1 per year to $5.13 an hour - not $15 an hour. Yet after the exchange with lawmakers, the business owner stood firm.
"It’s going to be a problem," he said. "Of course I’m against it. I’m going to go out of business."
Then just a few hours later, a joint statement was e-mailed out from the diner’s owner and the state assembly speaker.
Ludas suddenly changed his tune.
“I was not fully aware that the minimum wage increase will be phased in over five years. That’s why I’m so happy that Speaker Coughlin took the time to talk me through the plan," he said. "I do support paying my hard-working employees a wage that helps them make ends meet and makes the state more affordable for them."
"I am not concerned about having to close," said Ludas.
Back in the diner, small business owners seated to eat shared their concerns.
"You know everything will go up," Theresa Lockwood, co-owner of Lockwood Boat Works Inc. "The costs of your labor goes up, the cost of your product goes up. We’re having a difficult time competing with the internet as it is."
Lawmakers stressed this will be a gradual wage hike, rising from $8.85 to $15 an hour over the next five years.
"When you give people on the lower income scale more money, they’re not wealthy. They’re going to spend it," said Senate President Sweeney. "They’re going to spend it right away and it’s going to prime and pump the economy."
In New Jersey, 1 in 10 people are estimated to be living in poverty. With the high cost of living, the average person is taking home just under $40,000 a year.
"Right now people cannot live on minimum wage, especially in New Jersey," commented one diner.
"I don’t know how people can live and support a family on what is now a minimum wage, I just think it is just disgraceful," said another diner, who is also a business owner.
New Jersey's senate and assembly are expected to vote on this bill on Thursday.