College students affected by 13 cent raise in minimum wage


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Photo by Edwin Gano |

The minimum wage in New Jersey increased by 13 cents at the beginning of 2015. While students believe the change will benefit New Jersey and its residents, professors think it will have no impact on the economy.


The cost of living is always rising, making it essential that minimum wage employees get compensated yearly as the rate of inflation increases, said Jeffery Rubin, a professor in the Department of Economics.

Although the minimum wage in the state of New Jersey increased by 13 cents at the start of the year, Rubin does not believe the increase will have any effect on the economy.

According to nj.com, the increase in minimum wage was required under a constitutional amendment approved last November by 61 percent of voters. The amendment raised the minimum wage by $1 and provided automatic yearly increases to cope with the pace inflation.

The wage rate increased because the cost of living increased this past year by 1.59 percent, according to nj.com.

Rubin said this particular increase is the first time a change in the law is having an influence.

“This new law mandates that the minimum wage automatically increases according to the increase in the cost of living,” said Rubin. “It takes the political aspect out of it.”

According to USA TODAY, New Jersey is among the seven most expensive states to live in the United States. The median monthly rent in New Jersey is $1,800, compared to the U.S. median of $905.

The law ultimately allows minimum wage employees to buy what they could not afford before by automatically increasing minimum wage as the inflation rate increases, Rubin said.

The only way the issue of raising the minimum wage automatically would be a significant problem was if the inflation rate increased by 3 or 4 percent, he said.

“But that is not the case right now. I would be surprised if it had any effect,” Rubin said. “Maybe a very small decrease in hours worked, but I doubt that, too.”

There are two effects this increase could have on students, but it all depends on the role of the student as either workers or consumers, Rubin said.

“For student workers, the increase may affect businesses that hire students by giving them less hours, or they might not hire as many students,” Rubin said.

Student consumers might see the increase of 13 cents in the daily items they purchase, he said.

Businesses that rely solely on student consumers might put the increase of 13 cents that they are paying workers onto items that are inelastic goods for students, Rubin said. 

“All of those are effects that could come from increasing the minimum wage, but again, a 13-cent increase won’t really have much of an effect on the economy, if any at all,” Rubin said.

Dylan Meredith, a Rutgers Business School sophomore, believes the incremental increase of 13 cents is a safe move.

“Even though some economists might argue that an increase in minimum wage could have an adverse effect on employment, the past year has shown that job growth is more rampant in states where minimum wage was increased,” Meredith said.

Overall, New Jersey residents should see an increase in the minimum wage rate every year automatically since the cost of living will also most likely continue to rise each year, Rubin said.

Dan Khan, also a Rutgers Business School sophomore, is excited to see that the increase is automatic and going to occur yearly.

Although 13 cents is a “very small amount,” it still adds up, Khan said. The increase will help people maintain their current life style and keep up with the cost of living, he said.

“The law that was passed this past year is definitely helpful to minimum wage employers,” Khan said. “It allows them to continue buying goods they were able to buy with their previous salary the past year again, this year.”


Ankush Raval

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