As New Jersey’s minimum wage jumped to $11 Wednesday, News 12 New Jersey decided to talk to one of the business owners who has to pay the higher wages to see how it’s affecting operations.

The businessman, Scott Mele of Tektite, a manufacturer in Trenton, said increased labor costs have him looking to move out of New Jersey.

“It’s basically the state forcing me to change the way I want to operate my business,” Mele told News 12. “They said, ‘Well, you know, if you relocate to Pennsylvania you’re going to save about $70,000 a year. That, for a company our size, that’s a big deal.”

The minimum wage rose $1 on Jan. 1 for most businesses. The hike to $11 per hour came after the law increased from $8.85 to $10 an hour in July. The minimum wage will go up automatically every year until it reaches $15 an hour in 2024. Very small businesses and certain seasonal operations will see smaller increases over a longer period, but will eventually be subject to the $15-an-hour rate.

NJBIA led the fight against increasing the minimum wage and is continuing to push for legislation to alleviate some of its negative consequences. In a statement issued Dec. 31, NJBIA President and CEO Michele Siekerka said, “Across the country, we are beginning to see some of the unintended consequences of $15 minimum wage increases – whether it’s the stalling of entry-level job growth in Seattle or restaurants adding surcharges to food bills to offset labor ordinances in California. New Jersey has an opportunity to mitigate these and other impacts with corrective legislation.”

NJBIA supports bipartisan legislation that provides for the suspension of scheduled minimum wage increases due to an economic downturn, as well as a proposal for tax credits for employers hiring workers under 18 years old, who are now increasingly at risk of not being hired with a higher pay rate. NJBIA also believes the state should establish a task force to study the impact of minimum wage increases on businesses.

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8 responses to “A Business Owner’s View of the Minimum Wage Increase”

  1. Jim Doherty says:

    That should not be the only reason to leave NJ

    • Jim says:

      Just like consumers search for lowest cost, businesses have the right, as well, to search for lowest costs and higher prices.

      States, like NJ, believe they have no competition from other states. Why do you think so many companies moved manufacturing to China or India or other states? Because of costs – not just taxes, but other costs brought in by more, new, AND stricter regulations.

      Furthermore, it is not just increasing the minimum wage that has an impact on increased costs. The worker comp insurance goes up because it is based on wages. The State of NJ collects more in payroll and incomes taxes paid by both employees and businesses who match most of those payroll taxes.

      NJ now sucks for businesses. We are already searching for better states like Florida, where in fact, the economy is booming better than the lackluster NJ economy. All taxes across the board are cheaper.

      And for those imbeciles who say that you should not be in business if your business can not afford to pay a living wage, I say those minimum wage employees can open their own businesses and see how profitable they are after dealing with all the nonsense, regulations and taxes.

      And, if the state of NJ wants a fairer and stronger NJ, then why are employee portions of their payroll taxes going through the roof! Wake up!

    • Keith says:

      I pulled into a Burger King to order a whopper with cheese and medium fired and drink and paid a whopper of price tag, $10.12! An increase of $2.00. Way to go Democrats.

  2. Nancy says:

    A Dictatorship never works. If it’s your business you should pay what you can and what the employee is worth.
    There are many ways other than money that is beneficial to workers. Such as teaching them important job ethics and being supportive mentally and emotionally when they are going though tough times. Teaching them a skill that is not taught in school, but can lead them into a better job, where that skill is worth more money to someone.
    If we all run our business the way the state wants us to we may not be able to make it and new potential business owners won’t want to start a business here.
    Back off NJ and let the business owner run their business the way they want to.
    It’s bad enough we are collecting, accounting and sending you your sales tax money.

  3. Donald A Ferguson says:

    The truly screwed are the retired and near retired. Their pay won’t rise in proportion to the price increases in EVERYTHING. The seniors are a huge voting block and growing. FU TRENTON!

  4. Louie says:

    Thank you again Gov Murphy as you succeed in destroying small business ( and all business) in NJ. I am assuming you take the same continuing education courses that Gov Cuomo and Gov Newsom do. Is it any wonder why people flee these three states more then the other 47. As you take a victory lap, we move out. Your PTO policy is another business disaster. Boy, do I miss Gov Christie.

  5. Bea says:

    The minimum wage increases are simply a disaster. No idea why legislators think they’re economists. If you want to improve the “living wage” make it cheaper to live in NJ. Then, one’s income goes further — improve buying power (i.e. reduce cost of living). Instead, NJ legislators band aid the problem with increasing min. wage which makes the $12 an hour lifeguard more appealing than a college-degreed, seasoned professional’s, $18 look more attractive. How my 16 yo is making $12 an hour whilst the retiree working for my agency part-time is only getting $18 is just crazy. The gap was narrow enough at the $10 hr minimum. Now, we’re forced to absorb the increase in hourly rates or risk losing a trained employee. Raising the min. wage leaves the real problem uncorrected — businesses will raise rates to offset the increases in wage and workman’s comp to where they are no longer competitive. If businesses leave NJ or worse, close up shop, then where will folks find work? Dumb move NJ.

  6. Amit says:

    The separate issue that this causes is the lack of ability for smaller businesses to compete against bigger businesses with higher starting pay. We’ve been paying $1-2 higher on average + overtime for our staff from the start. This helps us retain our employees versus them looking for a job at Amazon. Once everyone is pushed to $15, what leverage do we have to compete? Businesses in NJ are now losing on all fronts – taxes, growth, cost, wages, gas, etc. The risk to increase pricing to partially offset these costs means potential lost business from consumers or higher risk to losing to overseas products. I get the idea of paying a living wage and wanting people to not be on social programs, but all these actions are doing is forcing smaller businesses out and keeping big business in. Consolidation of resourcing to the 1% of all businesses which is a lose-lose proposition.

    Sadly I’m not a business who can simply jump ship and I believe that’s all NJ is banking on. The people who are locked in for whatever reason will stay at lower margins because going into the workforce isn’t an option. Work harder, work longer, make less as a business owner <– that should be NJ's new moto