Opinion: A $15 Minimum Wage Is A Colossal Mistake

By Aaron Neuman. On Monday, Governor Phil Murphy announced in a press conference that raising the minimum wage to $15 an hour is a top priority of his, along with legalizing marijuana in New Jersey. It makes sense that he mentioned those two initiatives together, considering that you’d need to be high to think that hiking the minimum wage to $15 is a good idea.

Although minimum wages need to be at a certain level to ensure that uneducated workers are not treated as expendable servants, making the minimum wage too high poses serious risks.

For one, it causes prices to increase overall. As business owners bring home less money due to paying their workers more, they raise the price of their goods to compensate for the increase in overhead costs. Just like a tax, a higher minimum wage doesn’t result in businesses making less – it just makes goods and services more expensive for consumers. A good example of this is in California, a state which has already enacted laws mandating a minimum wage of $15. It’s not working out well. The Los Angeles Times ran a report which showed that almost immediately following the minimum wage hike, prices for consumer goods soared. Even the workers whose wages went up are now paying more for everything, making the minimum wage hike a net negative for them. And for consumers who haven’t had their paychecks raised it is even more painful.

A second, perhaps more concerning, issue with raising the minimum wage is that businesses are incentivized to be faster in implementing automation so as to avoid paying any workers at all. Automation, while widespread, is still in it’s infancy, and the majority of companies have been holding off on automating all their processes. A minimum wage hike will change that. With every minimum wage worker’s rates almost doubled from New Jersey’s current rate of $8.60 an hour to $15, companies will begin automating far more quickly, with low-skilled workers getting the ultimate low-wage: $0 an hour, because they’ll be unemployed.

And third, raising the minimum wage has been shown to hurt the economy. A high percentage of people in the workforce is necessary to push economic growth forward. The higher the minimum wage, the lower the percentage of adults being employed is. This is basic economics. New Jersey has not been doing well economically. It was ranked dead last of all 50 states in economic growth in 2016, and is considered to be one of the least favorable states to do business in. Businesses have been fleeing New Jersey for years, costing the state billions in revenue and economic growth. Raising the minimum wage will compound the issue, making New Jersey’s economy lag even further behind the rest of the US.

I believe that Governor Murphy knows this; he just doesn’t care. Perhaps Murphy is of the same opinion as California’s Governor Jerry Brown, who said of raising the minimum wage in his state that “economically, minimum wages may not make sense. But morally, socially, and politically they make every sense”. What a silly notion to propagate.

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  1. I can’t agree more all a minimum wage increase will do is make $8.00 the new 15.00 –
    It’s a Numbers game. The people getting 15.00 start
    getting 20.00 and anyone getting 20 will get 25…when people used to make a few dollars an hour everything costed less – better cash in your savings before it loses value..

  2. You are spot on regarding all your points.

    Unfortunately, raising minimum wage to $15/hour is a priority of the democrats. Whether it makes sense or not.

    Hope Murphy is not successful in getting this passed. & hope NJ is smart enough to put in a Republican next time around!

  3. I agree 100% with the writer that from all the socialist policies Murphy imposed on NJ, this one will have the greatest economic consequence, effecting among others:
    1) Small business owners who will not be able to afford to pay such high wages (and resulting employment taxes)
    2) Minimum Wage job-seekers who will find jobs are not as readily available since employers will be unable to hire additional workers they would otherwise have considered.
    3) Every single NJ resident who will see the trickle-down effect in every single bill and purchase.

    Further Points:
    1) This new tax will also cause business looking to expand to no longer consider coming to NJ (see: Amazon).
    2) Should a teenager operating a ride at an amusement park really be earning $15 an hour?
    3) Currently, capitalism dictates how much an employee should earn. An entry-level unskilled worker will earn, for example $9 an hour. If his employer sees that he is working hard and doing well, he can increase it gradually and possibly increase responsibilities, etc., paving the way for job advancement. However, if the employer is already paying his entry level worker $15, how many raises can he afford to give? And what will make an employee want to work harder if he knows $15 is the most he can receive in his job because nowhere can afford to pay him more?

    Does anyone know anything we can do or anyone we can contact to stop this bill from passing?

  4. The writer makes great points!!!!!!!!! However all I can say is: Welcome to the State of New Jersey!!! The state where it doesn’t have to make sense…. only politically sense 🙂 ….

  5. Making more people unemployed is the whole point. Then they will be on welfare and dependent on the government, and they will keep voting for the leftist politicians who give them free goodies.

  6. There should be an increase in minimum wage. People get increases in Food Stamps, Welfare, rental assistant. Why shouldn’t people working to make a living get a increase. Lets be fair

    • @Denise A Clarke

      How does making a mandatory minimum wage increase benefit anyone? Who should bear the cost of this $7.40 increase? Should business owners make less money? Most likely businesses will raise the price of their product to cover the increased cost. This will negate the increased wage as it will cost more to maintain the same lifestyle.

      People who work can increase their earning potential, either through making themselves a valued employee or increasing their education and/or skill set. Forcing businesses to pay more has not been shown to be beneficial in the long run. Similarly, raising taxes on the wealthy has not helped level the economic playing field. It just drives them to find cheaper alternatives (i.e. outsourcing the work or moving the company to a more friendly environment).

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