Higher minimum wage is coming; the question is how gradually it will be phased in, and whether some seashore tourism businesses will be exempted, commerce leaders said at a recent seminar.
From the national and state chambers of commerce, area businesses heard the latest on that and other upcoming policies that will potentially impact small businesses.
Thomas M. Sullivan, vice president of Small Business Policy, U.S. Chamber of Commerce, and Thomas Bracken, president and CEO of the New Jersey Chamber of Commerce, spoke at the luncheon held by the Ocean County Commerce Coalition and sponsored by TD Bank. A delegation from the Southern Ocean County Chamber of Commerce was at the event, held in Toms River.
“We have a governor who campaigned heavily on a $15 minimum wage,” Bracken began. “I don’t want to speak for the room, but I think it probably scares the majority of folks sitting in this room who look at their business models and say, ‘What do I do with a $15 minimum wage, and how am I going to have to raise prices or who am I going to have to lay off?’
“Minimum wage is going to change; there is no two ways about it,” he said, and explained why.
“When we have a governor and the leadership in the Senate and leadership in the Assembly majority, and the vast majority of Assembly people and senators who are for an increase in the minimum wage, it’s going to happen.”
Given the legislative climate, past and present, the N.J. Chamber of Commerce is working for compromise.
“We’re all in favor of having the people impacted by the minimum wage have a better quality of life, and I think that socially, that’s the right thing to do,” he said. “But we have to do this in a way that’s responsible.
“And the definition of responsible is to make sure that we go from where we are,” which is $8.60 per hour, “to whatever the limit that they want to go to is, over a period of time that is reasonable so that businesses can absorb the increases in their budgeting and pricing and so forth.”
Secondly, Bracken said, “carveouts,” or exemptions, are needed for segments such as seasonal enterprise.
Such proposals are in the talking stages, he told the audience, whose members hailed from Brick to Atlantic City, including former Atlantic City Mayor Don Guardian.
“There should be carveouts that are seasonal carveouts. I know there is talk about carving out agricultural workers; there is talk about, which you can appreciate, the summer workers working the boardwalk and so forth. Restaurants are talking about some carveout with the tipped employees.”
So, although there is a “long way to go” in negotiations, “the good news is we have had several discussions with leadership in both the Assembly and the Senate,” he said, regarding a phase-in.
“I’ve heard anywhere from four to seven years; somewhere in there probably is where it’s gong to fall,” he said, “and they are still in the discussion stage about carveouts.”
The overall opinion of the N.J. chamber is “we are all in favor of these people getting more money and having a better quality of life, but do it in a way that does not negatively impact business, and can be absorbed.”
Sullivan, from the U.S. chamber, urged businesspeople who have stories of how a higher minimum wage would affect them to take that testimony to their area chamber of commerce so that it can be passed on to legislators “so they have real-life examples of the discussion.”
Next, the evolving topic of immigration was brought up by moderator Jeremy Grunin, executive board member and former chairman of the Greater Toms River Chamber of Commerce.
Bracken said the state chamber’s position is that the issue should be legislated at the federal level, but “we feel that good, hardworking people should be dealt with in a very equitable, humane way. And to do anything other than that, is irresponsible.”
Sullivan summarized that with the nation apparently on the path to consistent growth every quarter, one result is stress on infrastructure. “If you’re growing and creating infrastructure, who is going to do those jobs? … Immigration has to be part of that answer. On immigration, we are not on the same page as the White House. We are so supportive of the pro-growth measures they have taken … but growth has to be fueled by qualified and willing workers.”
Tax reform was among other topics visited.
The U.S. chamber vice president of small business policy said it is a chamber priority to “make sure that small businesses know how to maximize any possible benefit” from federal tax reform.
“Talk to your CPA and financial advisers. They are going to be the key for small businesses to maximize any benefits.”
He said this past year was the first time in 12 to 15 years that small businesses were part of the discussion on tax reform.
The U.S. chamber looks at all policies through the lenses of “growth,” Sullivan said, and obtained opinion from what he termed an objective tax analytic group called the Tax Foundation. The chamber asked the foundation how the final tax package will impact growth.
“They have a 10-year horizon; in that 10-year horizon, they speculate on the modeling that it will be about a 1.1 percent income boost for families. Also, they speculate that it will be about a 1.5 percent wage growth over 10 years.
“The thing that really caught my attention … is that it is the same analysis that New Jersey should be gaining 9,555 jobs because of the changes to the tax code. That puts New Jersey in the top 10 states for job growth related to changes in the tax code,” Sullivan said.
“That’s what gives me incredible optimism for this community and for this state. We’ve got a long way to go in partnership with the state chamber and local chambers on educating small businesses to maximize their benefits.
“Regardless of if you were for or against, or neutral, we all have a vested interest in making sure small businesses are empowered and educated to maximize the possible benefits, so they’re able to reinvest their savings to grow their businesses.”
— Maria Scandale