Keeping Our Eye on the Economic Prize

Report to Members

By Michele N. Siekerka. Esq., NJBIA President and CEO On Oct 2, 2018

As our Legislature returns to Trenton after a challenging budget season, it’s critical that policymakers take full stock of the cumulative impacts already placed on New Jersey businesses this year before putting more obligations on the backs of our job creators.

To be sure, there has been promising news for New Jersey. Gov. Phil Murphy continues to make important strides to advance our innovation economy with several major initiatives. Innovation is the key to our economic development and we share his mission to have New Jersey reclaim its stature as the Innovation State.

Additionally, bold but essential recommendations were outlined by the Economic and Fiscal Policy Working Group commissioned by Senate President Steve Sweeney. NJBIA is encouraged by the panel’s urgency to adopt long-term solutions to the state’s fiscal challenges.

But it is also true that thus far in 2018, our employers have been beset with additional costs, including a corporate business tax increase to 11.5 percent for companies making more than $1 million; new laws mandating paid sick leave; and new laws requiring ratepayers to subsidize nuclear power plants and business taxes that will add greatly to energy costs.

These events contribute to New Jersey’s last-place ranking in regional business climate. Our business community must be wary of what’s ahead, including:

$15 Minimum Wage. The governor and legislative leadership support a mandated $15 minimum wage and will advance a bill this fall. Because small businesses cannot absorb a steep increase without reducing staff, hours or benefits, raising prices or automating, NJBIA is strongly advocating for multiple exemptions.

Some of those carve-outs include youth wages for teenagers; training wages for new employees; exemptions for seasonal tourism businesses and farmworkers; considerations for nonprofits who rely upon government subsidies that won’t cover the cost of service with the increase; a gradual phase-in of the new rate; and economic off-ramp provisions to protect small businesses during a major economic downturn.

Resetting the minimum wage, without raising the skill level for a position, could lead to the resetting of all wages, which would have significant impact on many businesses. Because higher skill levels demand higher wages, job training should be part of any discussion regarding major increases to the minimum wage.

Paid Family Leave. No employee should have to choose between job and family. That said, New Jersey already has one of the most generous family leave policies in the nation. A new bill would double the amount of time workers could take to care for a newborn, a newly adopted child or a sick family member from six weeks to 12 weeks. Workers would also receive 90 percent of their weekly pay while on leave, up from the current 67 percent. This legislation also lowers the exemption threshold from 50 to 30 employees, affecting more small businesses that can least afford this.

Bad Faith Bill. There will also be impacts from new legislation that rewrites the insurance law definition of bad faith in such a vague fashion that it would open the floodgates for frivolous lawsuits. The result would be insurance cost increases of up to 40 percent.

NJBIA asks our policymakers to view bills impacting job creators through the lens of regional competitiveness and affordability. Otherwise, we risk losing businesses or having them stagnate here or expand elsewhere. 

We entrust our policymakers to stay focused on current initiatives that include planning, cost-sharing, spending reductions and reclaiming our innovation economy. This will afford New Jersey a new path to economic prosperity.

To access more business news, visit NJB News Now.

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