Trenton, N.J. – Assemblyman Hal Wirths made clear today that he is concerned with the path Democrats are taking to increase the minimum wage. He said that small-business owners can’t afford it and the bill leaves the state economy even more vulnerable to a recession.
“This isn’t a Democratic issue or a Republican issue. All of our goals are to do everything possible to put more money in the working poor’s pockets,” said Wirths (R-Sussex). “But I just think that this is way too aggressive and it will be hurtful for businesses.”
WATCH: Wirths: Hurting businesses won’t help workers
Wirths was credited by multiple business groups for pointing out that the definition of a small business is out-of-whack with reality, that there is no pause in minimum wage increases to account for a recession and that small businesses need a tax cut more than increased labor costs to expand and create more jobs.
Business leaders tell Wirths a minimum wage hike hurts workers and NJ economy
The U.S. Small Business Administration defines a small business as having 100 or fewer employees, which is used by New Jersey’s small business set-aside program. The bill passed by Democrats defines a small business as having five or fewer employees. Businesses with 20 or fewer employees are the fastest growing in the state, according to the 2018 small business profile report by the SBA.
Wirths proposed a three-bill package last fall that would cut business taxes and provide workers with an effective wage above $15 by 2023. It would phase-in the minimum wage to $13, double the earned income tax credit to 80 percent and double the employer deduction for compensation paid to 200 percent to help small businesses afford the pay hike. The deduction would only apply to minimum wage employees for businesses with 100 or fewer employees.
Wirths plan would pause the minimum wage phase-in for 18 months if there is a recession, indicated by a decline in employment for either the six-month or three-month period ending in June of each year. Business groups called this mechanism imperative, as wage hikes will exacerbate job losses and hamper job creation during a recovery. New Jersey was the slowest state in the nation to recover its jobs lost during the last recession.
Job retention and creation is the motivator for Wirths’ business tax deduction. New Jersey is routinely ranked the worst and most expensive state to own a business, and continually falls behind the nation in job growth. The doubled deduction would sunset after ten years, twice as long as his proposed minimum wage phase-in to help business owner handle the faster-than-inflation increases.