$15 minimum wage: will it really help?

  In early February, Governor Phil Murphy signed legislation that would raise New Jersey’s minimum wage to $15 per hour by 2024. The increase will be gradual with the requirement being increased to ten dollars by July 1st of 2019, $11 on January 1st of next year, and $1 more every year until it reaches $15. According to the Governor’s office, the new minimum wage “will grow the economy and raise wages for over one million New Jersey workers, giving them a foothold in the middle class.”

  Yes, it’s true that the current $8.85 per hour is not a living wage for a family to survive, but will raising the minimum wage solve our problems? Here are some reasons it may not work.


The minimum wage is meant for low-skilled jobs. $8.85 is not meant to be a living wage. It is meant for people, often teenagers, looking for an easy, entry-level job.


It will result in unemployment. The minimum wage will hurt those it is intended to help. A 1994 study on “The Effect of New Jersey’s Minimum Wage Increase on Fast-Food Employment Companies” showed that the minimum wage increase in New Jersey led to a 4.6% decrease in employment relative to Pennsylvanians in that group. will always choose the more cost effective method for them, which could include cutting jobs and/or replacing them with automation.


It will hurt consumers and taxpayers. In Illinois, there is a proposal to raise the minimum wage from $8.25 to $9.25 per hour by next January. The Chicago Tribune reported that by 2020, taxpayers will be paying $80 million and $270 million the following year. An increase in the wage requirement will result in added costs for businesses which will result in inevitable price increases for the consumer.


Economics teacher Mr. Murphy agreed that raising the minimum wage is not the answer. “I believe the minimum wage law will have a negative impact on New Jersey’s economy because it will artificially increase costs on similar businesses, which will lead to higher unemployment and less workable hours,” he said.

  Junior Madhav Manoj has mixed feelings about the new minimum wage. “I do believe people on the lower spectrum of incomes deserve more pay to provide themselves better,” he said.

  Manoj added that the wage increase will give them an opportunity to pursue an education and improve their standard of living. However, he does not support the new minimum wage.

  “I am against it. As history has shown, wage increases cause an increase in prices. So in the short term, this change is good, but later it will become the same situation as it is now,” he said.

  While the law is intended to help the poorest among us, it will likely lead to layoffs due to higher costs. Mr. Murphy notes on the negative impacts of the new wage.

   “I do not believe the law will help those it is intended to help,” he said. Murphy added that the increased minimum wage will cause localized inflation, meaning prices will increase do to the loss in value of money.

  Automation is already taking over the low-wage industry. Just recently, McDonald’s renovated and replaced cashiers with screens. Royal Farms just opened down the road with self-checkout. A higher minimum wage will naturally lead to higher costs for businesses which will just lead to less jobs or added costs to the consumer. Overall, the wage increase is intended to benefit the New Jersey economy and the lower class. However, these reasons, which are supplemented by historical examples, prove that this wage increase may be ineffective.