Linda Doherty, President and CEO of the New Jersey Food Council (NJFC), released the following statement regarding Governor Christie’s absolute veto of legislation which would drastically increase the minimum wage in New Jersey to $15 an hour:
“We support the action today by Governor Christie in vetoing a 79 percent increase in the minimum wage that would have made New Jersey one of the highest required wages in the country. New Jersey’s food retail and distribution industry employs almost 200,000 workers annually, and our member companies operate on very slim margins. While the industry is committed to providing our employees with competitive wages and generous benefit packages, New Jersey food stores would be unable to afford such a drastic increase in labor costs without reducing staff, cutting hours and benefits, and raising prices on consumers.
“Minimum wage increases reduce access to entry level positions particularly in labor intensive industries like food retail and distribution which relies on students who live at home, seasonal workers and retirees supplementing their income.
“Ironically, it is the food companies that call New Jersey home, providing tens of thousands of New Jerseyans with jobs that would be particularly disadvantaged by this extraordinarily high wage floor. Big box stores could absorb higher labor costs in New Jersey by raising prices minimally across their huge supply chain. On-line retailers will pursue automated technology to avoid hiring people. It is New Jersey food retailers that would bear the burden of this forced wage increase because these stores can only realize a limited number of sales and prices can only be raised so high to compensate for the higher wage costs.
“Economists John Dunham & Associates have conducted a comprehensive economic analysis of New Jersey’s food retail and distribution industry. The data shows that New Jersey has lagged behind national job growth, both in lower-skilled jobs and in total jobs, in almost every year the minimum wage was increased. Following the 2014 minimum wage increase, low wage job growth fell from 2.79 percent to 1.48 percent, a loss of -1.31 percent.
“The data also reveals that a drastic minimum wage increase would lead to a significant increase in the price of groceries and other essentials. The price tag of a $15 minimum wage in increased costs to consumers is nearly $294 million. Even more troubling is that seniors age 55 and above, many of whom are on fixed incomes, would bear 40 percent of these increased costs to the tune of nearly $125 million. Basic necessities would cost more, such as toilet paper, which would increase by 19 percent.
“Food retailers are the anchor of almost every New Jersey community, and our industry has an impact on the health and wellness of New Jersey residents. This forced increase would jeopardize new food retail investment and job growth, and would drastically raise prices for food and groceries for all New Jersey families.
“New Jersey was once the headquarters of supermarket giants Pathmark and The Great Atlantic & Pacific Tea Company (A&P), a combined 200 years in the grocery business. These stores recently filed for bankruptcy in 2015 after the last wage hike. While these companies had their struggles, the last forced wage increase was unsustainable. A significant minimum wage increase would further jeopardize established New Jersey food retailers that will find it difficult to afford the nation’s highest minimum wage.
“The New Jersey Food Council appreciates the action by Governor Christie today. We look forward to working with the State Legislature as this issue continues to be deliberated in the months to come.”
The New Jersey Food Council is the Garden State’s preeminent trade association representing 1,200 retail food stores, wholesalers, manufacturing and service companies that collectively employ more than 200,000 associates in NJ. For more information, visit www.njfoodcouncil.com.