NJBIA Opposes Dramatic Increase in Minimum Wage for Transportation Workers

Sets Total Compensation at $22.25, More than Double Current Minimum

The New Jersey Business & Industry Association opposes A-4870/S-3226, the legislation that would increase the minimum wage to $17.98 per hour for contracted workers at Newark Airport, Hoboken Terminal and Penn Station Newark.

The legislation, which was released by the Senate Labor Committee today, also mandates several expensive fringe benefits including health insurance, paid vacation and paid sick leave. This would, in effect, set the new minimum wage at $22.25 an hour.

“This bill would substantially increase the costs for business, which will then be passed along to consumers,” said Michele Siekerka, President and CEO of NJBIA.

“The bill also circumvents the collective bargaining process by imposing wage and benefit mandates that are typically awarded through the contract negotiation process.

“Proponents of the bill cannot have it both ways. They cannot be strong supporters of collective bargaining, which carries the force of law, and then go to the Assembly and Senate for a legislative remedy when the collective bargaining process fails to attain their desired outcome.”

The legislation creates a two-tiered compensation system for businesses located in those transportation centers and those who are not. Businesses at Newark Airport, Hoboken Terminal and Newark Penn Station will effectively pay $22.25 an hour while those located outside those centers will pay a minimum wage of $8.44.

This is particularly unfair for businesses located in the transportation centers that are trying to compete with those that may be located down the street. For example, a Dunkin Donuts or a Starbucks competing with a similar business in a nearby neighborhood will have to pay higher wages and thereby will charge higher prices making them less competitive.

The bill also artificially assigns high wages to unskilled workers who hold entry-level positions rather than simply increasing education and training for unskilled workers so they can qualify for higher paying positions.

“We anticipate seeing more legislation like this as we move forward that will increase costs on business and make New Jersey less competitive with its neighboring states and less affordable,” said Siekerka. “As the Legislature considers these policy proposals it is important not to consider each in a vacuum, but to assess their cumulative impact.

“Businesses, no matter how large, cannot withstand a more than 100 percent increase in the minimum wage. “This sets a bad precedent, damages the state’s economic climate and makes us less competitive with our neighboring states of Pennsylvania and New York, which are our No. 1 and No. 2 outmigration states.”

To read the testimony given today by Mike Wallace, NJBIA director of Employment, Labor Policy and Federal Affairs, before the Senate Labor Committee hearing, click here.