(TRENTON) - New Jersey's minimum wage workers would earn different amounts depending on which town they work in under a proposal that has begun advancing in the state Legislature.
The state Assembly Labor Committee today voted 6-3 along party lines to approve the bill (A3912), which would allow counties and municipalities to decide if they want to set the minimum wage within their borders higher than the state's, which is currently $8.38.
Assemblyman Reed Gusciora (D-Mercer), the bill's sponsor, said the idea came from activists in Princeton.
"Let's face it, New Jersey's a very expensive state to live in. And there's many towns and communities like Princeton, Montclair and the like that can't afford to keep working families in their midst," Gusciora said. "This would enable a municipality, totally permissive, to set their own minimum wages."
New Jersey voters in 2013 agreed to amend the state Constitution to increase the minimum wage from $7.25 to $8.25, and then annually based on the Consumer Price Index. The wage went up another 13 cents on January 1.
Businesses said allowing towns to set their own minimum wages — and potentially even different wages for different types of business &mdashl; would create a bureaucratic nightmare.
"I'm kind of flabbergasted to some degree that we're even having this discussion," said John Holub, president of the New Jersey Retail Merchants Association.
Holub said that most of his organization's members already pay all their workers at least $10 an hour — let alone in wealthy towns like Princeton.
"The fact that the folks in Princeton are asking for this, I shudder to think what rate they actually want to go up to," Holub said. "Because I'm sure they're already paying pretty significant wages higher than most towns in the state of New Jersey."
Stefanie Riehl, a vice president at the New Jersey Business and Industry Association, said the bill could hurt "the people it intends to help."
"A business that's struggling to keep its doors open and make ends meet might decide to another areas in order to stay sustainable, and as a result workers could be forced to commute longer distances to earn a paycheck," she said.
New Jersey would not be the first state to allow local governments to set their own minimum wages.
The most publicized example is in the state of Washington, where on on April 1 Seattlewill raise its minimum wage to $15 an hour.
"It's not as if this is some sort of groundbreaking type of thought here in New Jersey," said Eric Richard, legislative affairs coordinator for the New Jersey AFL-CIO. "Other cities are already way ahead of New Jersey on this, and it's about time New Jersey catches up."
All six Democrats on the committee voted to support the legislation, though some expressed concerns. Assemblyman Raj Mukherji (D-Hudson) said he had "grave reservations about creating a scenario where we may have conflicting rules" and indicated that he might vote against the bill when it reaches the Assembly floor.
The committee's three Republicans voted against it. Assemblyman Jay Webber (R-Morris) predicted that towns that raised their wages would have to confront a shrinking tax base, and would end up asking state lawmakers for municipal aide.
"Would you agree that we should link this then if a municipality chooses to raise their minimum wage and loses jobs as a result of it, that they receive less in state aid because the state shouldn't be obliged to then bail out their bad economic decisions?" Webber asked Gusciora. "Would you agree this should be a part of this bill?"
Gusciora responded that he would expect wealthier towns that receive little state aid to pay higher wages.
"They want diversity. They want to keep low wage earners in the community," he said. "A place like Trenton or Newark fully understands your analysis, so they will think twice before doing this."
To become law, the bill would have to pass the full state Senate and Assembly and win the approval of Gov. Chris Christie, who said in an October 2014 speech to the U.S. Chamber of Commerce that "I'm tired of hearing about the minimum wage."
Christie conditionally vetoed Democrats' last attempt to raise the minimum wage, leading them to begin their successful effort to go around him and get it approved by voters.
Matt Friedman, Times of Trenton