By Matt Rooney
A Thursday deal between the governor and legislative Democrats means New Jersey’s minimum wage is set to hit $15 in just five years’ time, Save Jerseyans, a move which has the business community and even some Democrats concerned.
If other U.S. jurisdictions’ failed experiments with the minimum wage didn’t provide warning enough that this is a bad road to follow?
Governor Phil Murphy used to be our country’s ambassador to Germany under Barack Obama. It didn’t go well! But he was there. And that country’s experiment with a high, mandatory minimum wage isn’t going as planned.
He should check it out.
The Bonn, Germany-based IZA Institute of Labor Economics recently took at hard look at its country’s minimum wage activity; in 2015, the minimum wage there reached €8.50 ($9.68), and then it went up again to €8.84 ($10.07) in 2017. America’s Cato Institute analyzed the results (click here). The primary finding: “although hourly wages increased, the reduction in hours meant gross monthly earnings does not appear to have increased much for low-paid employees.”
The Germans also found, per Cato, (1) less new and “causal” employment and (2) “a negative effect on contractual hours.”
Still confused? Language is regional/cultural but images are universal. I recently took the liberty of stupid-proofing the impact of high minimum wages on the job market for our friends in Trenton:
It couldn’t be any simpler, Save Jerseyans.
Economics — like physics and mathematics — works the same on both sides of the ocean!