Murphy signs ‘historic’ minimum wage change
TRENTON — New Jersey Gov. Phil Murphy on Feb. 4 signed off on a new minimum wage law as part of a decision that Lt. Gov. Sheila Y. Oliver called “historic.”
Mininum Wage Bill A-15 increases social security payments that can help the country’s aging baby boomer population. It arrives at a time when resident views of the state have sunk to an all-time low.
The minimum wage bill includes different rates for large and small business employees, agricultural workers and those who traditionally depend upon gratuities.
The agricultural minimum wage increase brings New Jersey’s $8.85 hourly minimum wage to $10.30 on Jan. 1, 2020.
The minimum hourly rate of pay then steadily climbs for non-salaried farm workers until it reaches $15 in 2027.
Other workers in the state begin enjoying hourly minimum rates of $10 as early as July 1, 2019 and a $15 minimum wage in 2024.
Chester produce farmer Kurt Alstede said before Murphy approved the bill that a $10 rate would “cripple small to moderate-size businesses in New Jersey and cost people money.
“It’s not good for residents. It’s not good for labor. It’s not good for employers,” Alstede said.
The New Jersey Board of Agriculture in a written statement while the bill was being discussed pointed out that the state’s family-owned farms are the “most financially vulnerable” job providers.
New Jersey’s 9,100 farms average 79 acres and cannot compete price-wise with larger farms, the agency detailed.
New Jersey Senate President and Minimum Wage Bill co-author Stephen Sweeney, however, called the change a “living” wage.
He views it as a progressive plan that helps to improve the standard of living and quality of life and closes the wealth gap that separates segments of society.
Co-author and State House Speaker Craig Coughlin said that it helps alleviate poverty and that too many families aren’t earning enough to make ends meet.
Farmers in the state are often located in rural communities, where the cost of living is typically less than it is in urban areas, the Board of Agriculture pointed out.
The results of a February Monmouth University telephone poll revealed that only half of New Jersey residents, four percent fewer than in 2018, are happy with their quality of living.
Fewer are as happy in their local communities, though they feel about as safe and are about as pleased with the quality of schools and the environment.
The cost of property taxes was a big issue for survey respondents, and most of the unhappy were younger wealth generators who pay social security benefits that a more satisfied low-income elderly population collects. Women were also more likely to be unhappy than men.
Satisfaction during the Baby Boom era of 1987 was by contrast at 84 percent, according to the university.
Baby boomers, some 76 million born between 1946 and 1964, earned more than any age group and helped reduce the poverty rate among elderly households from 35 percent in 1959 to 11 percent in 1995, the Pew Research Center noted.
They also helped farmland sizes increase from 135 to 431 acres between 1935 and 1982, according to a USDA and North Carolina State University study.
The average farmer is himself these days of baby boom age. Whether or not retirement is a consideration or the farm a retirement fund, the baby boom population gained attention from the nation’s retirement system as early as 1997, a Brookings Institution article noted.
More than 26 million of a surviving 74 million or so have reached the age of 65 that allows them to collect Social Security payments, according to an Insured Retirement Institute study.
Another 10,000 turn that age every day between April 13, 2018 and 2030, the study noted.
Social security taxes from more than 150 million workers nationwide currently provide payments for more than 50 million people, according to the Social Security Administration.
They go into a federal trust fund where, invested in corporate and municipal bonds, preferred stocks and certificates of deposit, they accrue interest.
The U.S. Treasury in addition to a disability fund makes payments from retirement and survivor financial accounts.
The interest is important in advance of a large group of retirees, the Social Security website states.
The Social Security Trust Fund by Dec. 31, 2017 had expenses of $952,478, receipts of $996.581 and $2.89 million in asset reserves.
Retirement income has, however, traditionally been based on private pensions and personal savings as well as social security that the working population funds.
Government jobs aside, the percentage of workers covered by traditional pension plans that pay a guaranteed lifetime annuity has transitioned to investment-oriented 401(k)s.
Employees as part of 401(k)s contribute a portion of their salaries to tax-deferred investment plans that are often centered around stocks, bonds and money markets.
Many boomers during the 2008 recession experienced unemployment increases, reduced home values and stock market losses.
The median net worth of households headed by adults ages 35 to 54 declined from $100,000 to around $60,0000 between 2007 and 2011, the Population Reference Bureau reported.
Many children of baby boomers were themselves then attending primary school, graduating on to college and entering the workforce. Net worths during the recession further declined as the age grouping narrowed and increased, according to the Population Bureau.
Steven Gross in a 2010 Social Security publication cited SSA board of trustees forecasts requiring federal payment reductions or payroll increases of around 13 percent or a combination of changes. The forecasts would allow for full scheduled payments into 2085, he noted.
States such as Missouri and Illinois are, like New Jersey, exploring minimum wage increases.
Chesterfield and Pennington organic produce farmer Sherry Dudas said she currently pays many of her 35 to 40 employees $10 hourly rates and that H-2A Visa workers earn more than that plus housing.
“The raising of anybody’s wage to $10 per hour is not a problem for us,” Dudas said.
Alstede was concerned that young adults who enter the workforce would be among those most affected by New Jersey’s increased rate.
“Who wants to hire a 15-year-old with no skills and no experience and pay the same rate that they could hire a 25-year-old for?” Alstede said. “Youth employment is the training ground for the young to learn to become effective employees both in terms of the skills associated with the job and the maturity involved with being an employee in the workforce.”
Minimum Wage Bill A-15 includes a training rate of at least 90 percent for the first 120 days that a worker with no similar experience is enrolled in a training program that meets standards set by regulations adopted by the state labor commissioner.
Coughlin’s office did not respond to requests verifying that the training rate is applied to individually assigned minimum wages.
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