Gov. Chris Christie on Monday vetoed a bill that would have increased the minimum wage by $1.25 an hour, saying such a move would have caused businesses to lay off workers, raise prices or leave New Jersey.
Christie instead called on the Legislature to raise the $7.25 an hour minimum wage by $1 over the next three years. It prompted leading Democrats to say they would take the pay hike issue directly to the voters.
"We will use a tool available to us legislatively," said Assembly Speaker Sheila Y. Oliver, D-Essex. "We will vote on a bill that will put this on the ballot in November 2013."
The conditional veto averts for now a plan to raise the minimum wage to $8.50 an hour on March 1 and to tie annual increases to inflation.
Proponents of the pay hike have said the minimum wage doesn't come close to helping workers make ends meet, particularly in a high-cost state such as New Jersey. Critics, however, have said the move would hike labor costs on businesses that already are on shaky ground, given the slow economic recovery.
About 5.5 percent of hourly workers in New Jersey in 2011 were paid either the minimum wage, or, if they worked in a job that's exempt from the law, less than the minimum wage, according to the U.S. Labor Department. That amounts to about 99,000 workers.
Rhiannon Anderson, 23, of Highland Park makes a quarter more than minimum wage, working as an assistant manager at a pizzeria. (She asked that the restaurant not be named). She laid out a Catch-22: She needs to improve her education to make more money, but she can't afford it.
"It's very, very difficult, especially when you want to save up money to go back to school," she said Monday. "You're paying rent on top of car insurance, utilities, groceries."
Christie in his veto called on lawmakers to increase the minimum wage by 25 cents an hour the first year, 50 cents an hour the second year and 25 cents an hour the third year. He also wants to increase New Jersey's Earned Income Tax Credit, a tax break for low-income workers with children, from 20 percent of what they receive from the federal tax credit to 25 percent.
The impact of the Legislature's bill on businesses "is a step backward on the road to economic recovery, and the consequences of such action will be a significant blow to the very hard-working families this bill purports to help," he said in the veto.
The bill goes back to the Legislature for a vote, where a two-thirds majority in both houses is needed to override the veto. But Democrats sounded as if they wouldn't act on it and instead would go another route: pass a bill that would put the issue to voters in November.
"We are one of the highest-expense states to live in and raise a family, and that this governor is refusing to sign the minimum wage and include the (cost-of-living increase) on an annual basis I think is just -- not shocking, it's expected -- but it's a sad day for the middle class," said Sen. Barbara Buono, D-Middlesex, the front-runner for the Democratic nomination for governor.
New Jersey's current minimum wage is the same as the federal law, which was set in 2009. The state hasn't increased the wage on its own since 2006.
If the wage were to rise to $8.25 an hour, New Jersey still would trail Washington, Oregon, Vermont and Connecticut, according to the National Employment Law Project, a New York-based worker advocacy group that supported the Legislature's bill.
Christie's decision to leave out an automatic cost-of-living increase allows "the real value of New Jersey's minimum wage to simply erode each year as the cost of living continues to rise," said Christine Owens, executive director of the National Employment Law Project.
Business groups, however, have said they were concerned that raising pay for entry-level workers would force employers to give raises to workers making a little more than the minimum wage, too.
"The governor has found a reasonable compromise to a difficult and contentious issue," said Stefanie Riehl, assistant vice president of the New Jersey Business and Industry Association, a business lobby.
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