Christie Blocks New Jersey From Becoming Third State To Raise Wages To $15 Per Hour

Gov. Christie Vetoes Minimum Wage Increase Claiming It Would Hurt Businesses. Gov. Chris Christie (R-NJ) announced he would veto legislation raising the state’s minimum wage to $15 per hour in an August 30 statement, claiming businesses could not handle the wage increase. New Jersey’s legislature approved a bill in June that would gradually lift the minimum wage to $15 per hour by 2021, making it the third state to raise wages to that level after California and neighboring New York:

New Jersey Governor Chris Christie on Tuesday vetoed a bill to raise the state's minimum wage to $15 per hour over the next five years.

The legislation would have made New Jersey the third state to adopt a $15 per hour minimum wage, Christie said in a statement.

State voters agreed to a previous wage hike in 2013, to $8.25 from $7.25. New Jersey's rate is tied to the consumer price index and is now at $8.38, according to a database from the National Conference of State Legislatures (NCSL).

[...]

Christie, a close ally of Republican presidential nominee Donald Trump, said the wage bill passed by Democrats, who control both houses of state legislature, failed to consider the ability of businesses to absorb the increased labor costs. [Reuters, 8/31/16; The Star-Ledger, 5/26/16, 6/23/16]

Christie Pushed Right-Wing Myths In Veto Speech

Myth: Minimum Wage Workers Are Not Worth $15 Per Hour

Myth: Minimum Wage Increases Hurt Businesses And Lead To Job Losses

Myth: Minimum Wage Workers Do Not Need A Raise

Myth: Minimum Wage Increases Accelerate Workforce Automation

Myth: Minimum Wage Workers Are Not Worth $15 Per Hour

Christie Claimed Lifting Wages Is Giving Workers “Something Now For Nothing.” During an August 30 news conference defending his decision to veto the $15 minimum wage, Christie claimed raising wages for hardworking Americans was a giveaway that workers had not earned. Christie claimed lifting wages was a “siren song” and a way of promising workers “something now for nothing” and warned that “Someone else is paying” to raise working-class wages. Christie’s rhetoric echoes the common right-wing media myth, recently perpetuated by Fox News’ Andrew Napolitano, that “poor people” are “not worth” a $15-per-hour wage. [Office Of The Governor, New Jersey, 8/30/16; Media Matters, 6/24/16]

Fact: Based On Increased Productivity, Current Federal Minimum Wage Is “Far Below Its Historical Level”

CEPR: If The Minimum Wage Reflected Increases In Worker Productivity, It Would Be Nearly $22 Per Hour. The Center for Economic and Policy Research (CEPR) explained in a March 2012 issue brief that if the federal minimum wage had kept up with increasing worker productivity since the 1970s, it would have reached $21.72 per hour in 2012:

By all of the most commonly used benchmarks -- inflation, average wages, and productivity -- the minimum wage is now far below its historical level.

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Since 1968, however, productivity growth has far outpaced the minimum wage. If the minimum wage had continued to move with average productivity after 1968, it would have reached $21.72 per hour in 2012 -- a rate well above the average production worker wage. If minimum-wage workers received only half of the productivity gains over the period, the federal minimum would be $15.34. Even if the minimum wage only grew at one-fourth the rate of productivity, in 2012 it would be set at $12.25. [Center for Economic and Policy Research, March 2012]

Myth: Minimum Wage Increases Hurt Businesses And Lead To Job Losses

Christie Claimed The $15 Minimum Wage Would Be “Unaffordable.” During the same news conference, Christie claimed that lifting the minimum wage to $15 per hour “would trigger an escalation of wages that will make doing business in New Jersey unaffordable.” Christie's statement echoed right-wing media claims that raising wages would cost jobs and hurt businesses. Fox News guest host Charles Payne recently claimed that raising the minimum wage would “destroy job creation” on Fox News’ Your World with Neil Cavuto, and host Neil Cavuto has also claimed raising wages would be a “job-costing event.” [Office Of The Governor, New Jersey, 8/30/16; Media Matters, 6/24/16]

Fact: Raising The Minimum Wage Is Not A Job Killer

CEPR: Increasing The Minimum Wage Has “No Discernable Effect” On Employment. In an exhaustive report that reviewed dozens of individual studies and meta-analyses of the minimum wage to gauge the relationship between increased minimum wages and employment, the Center for Economic and Policy Research (CEPR) concluded in February 2013 that local, state, and federal minimum wage increases had a negligible effect on job creation. One of the meta-studies in CEPR's review was a 2009 peer-reviewed paper by economists Hristos Doucouliagos and T.D. Stanley, which plotted the estimated jobs impact of 1,492 separate calculations contained in 64 distinct studies. The paper found that the overwhelming majority of the “most precise estimates” of positive and negative jobs impacts were “clustered at or near zero”:

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Economists have conducted hundreds of studies of the employment impact of the minimum wage. Summarizing those studies is a daunting task, but two recent meta-studies analyzing the research conducted since the early 1990s concludes that the minimum wage has little or no discernible effect on the employment prospects of low-wage workers. [Center for Economic and Policy Research, February 2013]

Myth: Minimum Wage Workers Do Not Need A Raise

Christie Accused State Lawmakers Of Bowing To Demands Of “Political Patrons” While Ignoring The Needs Of Low-Wage Workers. Christie also claimed -- without evidence -- that “the [minimum wage] bill’s proposed increase surely is responsive to the demands of Democratic legislators’ political patrons” ignoring the needs of low-wage workers. Dismissing the needs and mischaracterizing the experiences of the working poor is a standard line of right-wing media attack on the minimum wage. In 2013, Fox Business host Stuart Varney claimed minimum wages shouldn’t be modeled after living wages because “you don’t” expect parents to live on the minimum wage, which he claimed is “for people fresh out of high school.”o. On Fox Business' Freedom Watch, Wall Street Journal editorial board member Jason Riley argued that minimum wage workers did not really need a wage increase because most are not in poverty nor “breadwinners,” despite wage increases being “sold by proponents as an anti-poverty measure.” [Office Of The Governor, New Jersey, 8/30/16; Media Matters, 6/24/16, 6/24/16]

Fact: Minimum Wage Workers Are Not Making A Living Wage, Majority Are 25 Or Older

States Where It’s Possible To Afford Rent On Minimum Wage: Zero. Good magazine released a video demonstrating how many hours of minimum wage work are needed to pay rent “affordably” on April 20, and did not find a single state where someone could afford rent on 40 hours of work on the federal minimum wage of $7.25 per hour. The research found that the federal minimum wage is so low and “flat out, inhumane” that the least amount of minimum wage working hours needed to afford rent was 49 hours per week in South Dakota. Maryland and New York residents would need to work more than 90 hours per week, and residents in Hawaii would have to work more than 120 of the 168 total hours in a week just to make rent:

[Good, 4/20/16]

BLS: 55 Percent Of Minimum Wage Earners In 2015 Were 25 Years Or Over In Age. According to the Bureau of Labor Statistics (BLS), in 2015, of the more than 2.5 million American workers paid at or below the federal minimum wage, more than half were aged 25 and above, representing 1.4 million people. Teenagers ages 16 to 19 represented 28 percent of minimum wage workers in 2002 and have since declined to 19 percent of all minimum wage workers by 2015. [Bureau of Labor Statistics, BLS Reports, Table 7, April 2016]

Myth: Minimum Wage Increases Accelerate Workforce Automation

Christie Claimed Raising Wages Would Lead To A “Wave Of” Workforce Automation. Christie claimed raising the state’s minimum wage would lead to automation of formerly minimum wage jobs, pointing to Wendy’s Restaurants as an example after their announced roll-out of “self-service kiosks” that will “reduce its number of employees.” Christie warned that automation is “the wave of the future, if we continue to do this type of really radical increase in the minimum wage.” Automation fears are commonly promoted by the media -- Fox Business’ Varney claimed, while rolling footage of a new humanoid robot from Boston Dynamics, that "$15-an-hour minimum wage protesters" should be worried that “that robot is going to take your job.” Right-wing media’s automation paranoia even leaks into reporting from otherwise reputable outlets; in August 2015,The Washington Post suggested a $15-per-hour minimum wage in Washington, D.C., may lead to “robot-powered restaurants.” [Office Of The Governor, New Jersey, 8/30/16; Media Matters, 6/24/16]

Fact: Automation Affects All Kinds Of Jobs And Income Levels

Experts Speculate That Technological Advancement And Process Automation Could Put Any Job At Risk. Authors Erik Brynjolfsson and Andrew McAfee speculate in their e-book Race Against the Machine that increased computing power and technical complexity could drive economic growth while negatively affecting millions of job seekers. From Race Against The Machine:

It may seem paradoxical that faster progress can hurt wages and jobs for millions of people, but we argue that's what's been happening. As we'll show, computers are now doing many things that used to be the domain of people only. The pace and scale of this encroachment into human skills is relatively recent and has profound economic implications. Perhaps the most important of these is that while digital progress grows the overall economic pie, it can do so while leaving some people, or even a lot of them, worse off. [Race Against The Machine, online excerpt, accessed 6/24/16]

Economist Michael Jones: Robots Will Replace Some Jobs, Creating New Jobs In The Process. University of Cincinnati assistant professor of economics Michael Jones argued in a Washington Post op-ed that while workforce automation will threaten some jobs, it will also generate new productivity and create new industries. Jones compared fears of automation in the present economy to the textile workers opposed to automation of the 1800s who decried new technological advancements in their factories. Jones pointed to multiple studies that show critics of automation are “crying wolf” because automation does displace workers in some sectors but also complements workers in other sectors and creates entirely new industries:

Machines are indeed replacing humans – and replicating what we thought were uniquely human skills – at a faster rate than many of us thought possible until recently.

For example, at the beginning of the 21st century, few people would have imagined that a computer could beat the best human in the world at Jeopardy. And yet, in 2011, IBM’s supercomputer Watson bested two former Jeopardy superstars, Ken Jennings and Brad Rutter.

But a focus on technology’s substitutionary (or replacement) role fails to appreciate how it also can be complementary. Job loss in some occupations will certainly continue, but it will be accompanied by gains in different fields, just as in the past. [The Washington Post, 2/17/16]