Carving up a clean $15 minimum wage

December 21, 2018

New Jersey’s Democratic leaders are getting ready to pass a $15 an hour minimum wage — while exempting half of the workers who would benefit, writes Karl Schwartz.

AFTER FORMER Gov. Chris Christie’s eight-year reign of terror finally came to an end, many residents of New Jersey were hopeful that their new “proudly progressive” Gov. Phil Murphy would quickly enact one of his signature promises: raising the state’s minimum wage to $15 an hour.

With Democrats in control of both the state Senate and Assembly by sizable margins, working-class New Jerseyans had every reason to expect a raise in a state that aggressively voted against Trump’s anti-worker agenda. The state’s current minimum wage is $8.38 an hour.

Finally, after nearly a year of waiting, Assembly Democrats introduced their version of a Fight for $15 bill. It didn’t take long for the disappointment to set in among activists, however, who quickly spotted the obvious ways that this bill fell short of what workers in numerous industries across the state have been fighting for.

Instead of raising the pay of the more than 1 million workers currently making poverty wages in New Jersey (often called a “clean $15”), the proposed bill gives businesses a massive carve-out that would exclude as many as 450,000 workers from receiving the full benefits of the legislation. New Jersey has a population of 9 million, 4 million of whom are employed.

New Jersey Gov. Phil Murphy
New Jersey Gov. Phil Murphy (Edwin J. Torres | flickr)

Workers affected by the bill would see their wages reach $15 a hour by 2024, a phase-in that is already too slow in a state where the average monthly rent is $1,366, but those affected by the carve-out would not reach $15 an hour until 2029.

As Brandon McKoy, an expert on legislation related to the minimum wage, has stated, “Anyone talking about a phase-in that is a decade long just isn’t taking this seriously.”

The workers affected by this carve-out include teenagers, seasonal workers, farm workers, and workers at small businesses with fewer than 10 employees. These groups of workers are already some of the most exploited and marginalized people in the labor force. By forcing them into a separate and significantly slower category of wage increases, New Jersey Democrats are condemning some of the most vulnerable workers to a permanent status of underclass employment and poverty.

It’s worth exploring these four categories of workers and what these carve-outs would mean for them and the state of New Jersey as a whole.

YOUNG WORKERS under the age of 18 are one of the most frequently targeted groups for exclusion of minimum-wage increases. The common stereotype of a young worker is a middle-class kid looking to make some extra pocket change to go out with friends on the weekend, but in a country where 40 percent of people cannot afford a $400 emergency expense, the stark reality is that many young people contribute significantly to their family’s basic necessities.

Researchers found that for families making less than $50,000 a year, teen workers annually contribute an average of $9,300 to their family’s budget. Teenagers have always worked to keep themselves and their families out of poverty, and with the cost of college becoming more astronomical each year, the argument that the minimum wage should not apply to people under 18 grows even more indefensible.

In addition to the economic necessity of higher wages for young workers, a youth carve-out will worsen labor conditions for the working class as a whole. Employers will take advantage of this carve-out to discriminate against adult workers who they would be required to pay $15 an hour, opting to hire cheaper younger workers instead. A bill that excluded different races and genders from the minimum wage would never be tolerated, and the labor movement should oppose efforts at a youth carve-out in the same way that it would oppose any group being denied equal pay for equal work.

The proposed bill would also be the first time in New Jersey’s history that an exception would be made for farm workers, a group of mostly immigrant workers who are already exempted from receiving overtime pay by state law.

The agriculture industry argues that a carve-out is necessary in order for farms to remain competitive in New Jersey. While any industry could make the argument that they too deserve a carve-out in order to remain competitive, farmworkers are an easy target for exclusion because they are primarily non-unionized Latino immigrants working jobs that already have some of the lowest labor standards in the state.

The New Jersey Farm Bureau (NJFB), a powerful lobbying group representing big agriculture that frequently masquerades as a group of struggling family farmers, has aggressively fought against paid sick leave, modest increases to paid family leave, and even the most gradual of increases to the minimum wage. Ed Wengryn, a research associate for the NJFB, has called a $15 minimum wage a “direct threat to farming” even though agricultural sales contribute at least $1 billion annually to New Jersey’s economy.

STEVE SWEENEY, the Democratic president of the State Senate, is closely aligned with the NJFB and has been a vocal proponent of the farm worker carve-out. Although he likes to tout his labor credentials, Sweeney has never been a friend of farm workers and has long made the unsubstantiated claim that a $15 an hour bill would only be popular with voters if farm workers were excluded. Labor advocates and even some of Sweeney’s Democratic colleagues were quick to point out the implicit racism in attempting to pit voters against the farmworkers, who are almost entirely people of color.

Big-money lobbyists are also behind the small business carve-out. The New Jersey Business and Industry Association (NJBIA) is the leading business lobby in New Jersey, writing anti-worker legislation for the more than 20,000 mostly small businesses that belong to their group.

Even though the NJBIA’s own internal survey of its members shows that small business owners are more optimistic than ever about the profits they expect to make in 2019, the group has vehemently fought against minimum-wage increases, threatening to fire workers and move their businesses out of the state if a carve-out is not made for them. Sadly, many legislators, including Democratic Assembly Speaker Craig Coughlin, are willing to cave to these threats.

Seasonal workers, the last group affected by the carve-out, are a segment of the workforce that frequently fall in and out of poverty due to the lack of stable and decent-paying permanent jobs in the American economy.

As sociologist Matthew Desmond has documented, the work requirements that were part of Bill Clinton’s welfare reform bill in 1996 did not actually lift people out of poverty but instead forced millions of people into poverty-level jobs, with few of these jobs leading to permanent and stable employment. Numerous studies since the 2008 recession have disproven the myth that getting a job is a way out of poverty when so many of the jobs created over the last decade are temporary and seasonal positions that pay poverty wages.

With the rise of seasonal work contributing significantly to the growing numbers of the working poor, it is worth asking why New Jersey’s Democratic leaders would carve out a group of workers in desperate need of higher wages.

It is ridiculous to think that billion-dollar retailers like Apple, Macy’s, and Whole Foods, all of which employ a high number of seasonal workers, would feel even the slightest drop in their bottom line if seasonal workers were not carved out in this bill. It’s also clear that businesses will be incentivized to create even more seasonal jobs to avoid having to pay the higher wages that permanent employment would offer.

THAT’S WHY why the seasonal worker carve-out should be seen as nothing more than a craven effort by Democrats to further hollow out a bill that should benefit low-wage workers, but is being tailored to serve the interests of employers.

It’s important to distill the lessons that this experience offers. First, activists may remember that in 2016 the Senate and Assembly actually passed a “clean $15” bill without any carve-outs — but they knew it would be vetoed by then-Gov. Chris Christie.

Many expected the same bill would pass as soon as a Democratic governor was elected. Others suspected that passing a bill in order for it to be vetoed was primarily about signaling to the grassroots groups that they should focus their energy on electing Democrats in the next cycle instead of direct actions and protests.

But once a Democrat took up residence in the governor’s mansion, New Jersey’s leading Democrats stopped fighting for even modestly progressive legislation and began pursuing support from corporations and the wealthy. Those involved in the fight for $15 movement must take away the lesson that the power of the movement comes from the mobilization of workers themselves in workplaces across the state — not the people sitting in the capital in Trenton.

Despite the major shortcomings of this legislation, there have nevertheless been great displays of solidarity. People working in many industries have spoken out in favor of the farm workers, teenagers, small business employees and seasonal workers who are getting a raw deal.

Groups like 15 Now NJ are urging New Jerseyans to stand up for a bill that will benefit all workers and to reject the racist carve-outs.

We must put pressure on our elected officials to pass genuine legislation that is pro-worker, but at the same time, we must acknowledge that these battles will ultimately be won by organizing workers outside of the Democratic political machine and taking the battle directly to the employers who refuse to pay a living wage.

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