Contact Us

Is the Minimum Wage Ripple Effect Real? [AUDIO]

At the beginning of this month, New Jersey raised the minimum wage to $8.25 an hour, and a report by the Economic Policy Institute estimates millions of higher-earning workers in New Jersey and other states will see their salaries raised in order for companies to preserve the wage structure.

Flickr User 401(K) 2012

So, is this minimum wage “ripple effect” legitimate, or just an interesting theory?

“Some companies will give their other workers a dollar an hour increase, but other firms will give a 25 to 50 cent raise, and many, many others will give no raise whatsoever,” said Phil Kirschner, president of the New Jersey Business and Industry Association. “It’s really all dependent on how healthy the business is and whether it’s growing or not.”

Kirschner said many small business owners have told him even though the government says they have to ramp up minimum pay to $8.25, that doesn’t mean other workers will see a similar bump.

“That money has to come from somewhere,” Kirschner said, echoing the sentiments of these owners, “and my sales haven’t increased that much and I may very well not be able to give the other employees a raise — their raise went to the minimum wage workers.”

A lot of small firms are in many ways fighting for their lives, according to Kirschner, against competition from big box stores that can offer a selection and a price they can’t meet. The smaller stores are looking for other ways to save money, including hiring younger workers for lower salaries.

“They have no option. If they want to stay in business, it’s tough enough, they will keep their payroll at a bare bones in order to survive,” Kirschner said. “The reality is, most smaller companies just can’t afford to hand out raises to everybody just because the minimum wage has been increased.”

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

Best of WOBM

Recommended For You

Best of the Web

Leave a Comment

It appears that you already have an account created within our VIP network of sites on . To keep your personal information safe, we need to verify that it's really you. To activate your account, please confirm your password. When you have confirmed your password, you will be able to log in through Facebook on both sites.

Forgot your password?

*Please note that your prizes and activities will not be shared between programs within our VIP network.

It appears that you already have an account on this site associated with . To connect your existing account just click on the account activation button below. You will maintain your existing VIP profile. After you do this, you will be able to always log in to using your original account information.

*Please note that your prizes and activities will not be shared between programs within our VIP network.

Please fill out the information below to help us provide you a better experience.

(Forgot your password?)

Not a member? Sign up here

Sign up for WOBM Listener Club quickly by connecting your Facebook account. It's just as secure and no password to remember!

Sign up to have exclusive WOBM Listener Club contests, events, coupons, presales, and much more delivered to you for FREE.