What Does Another 80 Cents a Day Buy? Not Enough!


On July 24, the federal minimum wage rose to $7.25 per hour. With it, thousands of New Jersey’s minimum wage workers saw a 10-cent increase in their hourly wage. This is nothing to be proud of, especially since the state’s median household income of $67,035 makes New Jerseyans the second highest income earners in the country.

The increase marks the first time in four years that New Jersey’s minimum wage earners will make the same as those in Mississippi, Arkansas, North Carolina and 27 other states throughout the country. This despite the fact that the state’s median household income is 84 percent higher than Mississippi’s, 75 percent more than Arkansas’ and 50 percent higher than North Carolina’s.

Housing costs in New Jersey are among the nation’s highest, with renters paying more than $400 above the national average per month. To afford a two-bedroom apartment alone, a minimum wage worker would have to work an impossible 129 hours per week every week of the year.

Housing is not the only thing that costs more in New Jersey. Groceries cost 11 percent more than in the rest of the country, utilities 16 percent more and health care an additional 10 percent.

In 2007, the state’s Minimum Wage Advisory Commission recommended the minimum wage be raised to $8.25 an hour, the federal poverty threshold for a three-person family; one year later it recommended an increase to $8.50 an hour. The commission also called on the legislature to annually adjust the minimum wage with the cost of living. To date, the legislature has done nothing.

Each year New Jersey’s elected officials do not raise the minimum wage, it’s the state’s working poor who suffer the most. Money earned today will buy less next year than it did this year, and even less in the following year. In actual buying power, the state’s minimum wage has declined since it was first introduced in 1968. That means the $7.25 per hour workers earn today buys less than the $1.40 they earned in 1968 or the $3.10 they received in 1980. Had it kept pace with inflation, the minimum wage would now be $8.68, or $1.43 more than it currently is. This, combined with the fact that low-wage workers tend not to receive wage increases, health coverage or sick days makes keeping up with inflation impossible for these families.

Raising the minimum wage not only helps individuals and families who rely on every bit of their paycheck to pay their rent, buy their groceries, clothe their children and provide healthcare for themselves and their families, it also stimulates the economy. Because they earn so little, low-wage workers are less likely than people with higher salaries to save money. This means that every additional dollar they earn is needed and will be spent.

The current economic downturn has affected almost everyone, and New Jersey’s low-income earners are struggling to meet the most basic of needs. By raising the state minimum wage to at least keep up with inflation, New Jersey will lessen the hardship faced by its most vulnerable residents.

To find out more about the New Jersey Policy Perspective click >>>Here

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Filed under median household income, minimum wage, New Jersey, New Jersey Policy Perspective

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