Lawmakers are proposing a tax break to encourage employers to hire more workers under 18 years old, a move they argue could mitigate the effect the new $15 minimum wage might have on those businesses.
Senate Bill 3483 – approved on Monday by the Senate Labor Committee – sets aside $10 million for the program, which allows employers to claim the tax break against their corporate business and gross income taxes.
Murphy signed the wage increase legislation in February, which will raise the statewide minimum wage to $15 in 2024, starting with an increase from $8.85 to $10 an hour on July 1.
S3483’s intention would be to encourage the hiring of workers under 18 years old who might otherwise be the first to lose their jobs at small- and medium-sized businesses as a result of the increase.
“One of the unintended consequences of increasing the minimum wage so dramatically is an unexpected decrease in the employment of high school students,” said Mike Wallace, vice president of government affairs at the New Jersey Business and Industry Association, which has been opposed to and wary of the increase.
“As the minimum wage increases, employers are going to be less likely to hire youth workers with limited skills,” Wallace added.
Some lawmakers such as Assemblyman Hal Wirths, R-24th District, have pushed for what they call an “off-ramp” for employers so that they would not have to pay the automatic increases in the event of an economic downturn.
“While it ignores economic realities like the inevitability of a recession … there is no way small businesses will be able to handle the increased labor costs,” Wirths said Feb. 4 in a statement.
