I urge everyone to vote NO on Ballot Question #2.

Ballot question number 2 amends the State Constitution, increasing the minimum wage to $8.25 as of January 1, 2014 and enacts a yearly increase in the minimum wage based on the consumer price index.

Minimum wage laws do absolutely nothing to increase the wealth of poor people. Minimum wage laws reduce the employability of the young and the unskilled. No employer will hire someone at a loss. These laws block individuals from accepting a wage where they can increase their skills and build up a resume. This produces endemic poverty among those who are barred from entering the labor force at a wage commensurate with their skills. On the job training is an essential tool for those unable to afford post-secondary college to increase their employability and income. The bottom rungs of the economic ladder get cut off for many who are just entering the workforce. The harm that minimum wage laws cause is concentrated among the most vulnerable, the young, minorities, and the disabled. 

Minimum wage laws do nothing to alleviate poverty and will make NJ’s business climate even less competitive that it is now. In a recent report NJ ranked at #49 in business competitiveness in the United states. Instead NJ politicians should look into making our business climate more competitive.

We need to look at effective ways of reducing poverty. These may include:

  • Reducing tax rates at all levels. Let’s start by slashing NJ’s sales tax rate. Our sales tax disproportionately affects the poor. This should be followed up by working with our municipalities to drastically cut property taxes. High property taxes discourage development and investment.
  • Decreasing the amount of regulation or at a minimum ensuring that the level of regulation every business adheres to makes sense.
  • End government restrictions requiring certification to work in certain fields. Instead let professional associations and certifying groups such as unions and trade groups provide the mechanisms for setting standards for occupations. Consumers should be free to choose a certified or non-certified professional.

This ballot initiative may provide a small salary increase to some, but it will also create the loss of jobs, and make it harder for many people to enter the workforce. There are more effective ways of reducing poverty in New Jersey.

Jay Edgar
Chair, NJ Libertarian Party

For more information on the effects of minimum wage laws see The Concise Encyclopedia of Economics – Minimum Wages by Linda Gorman.