Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Could raising the minimum wage reduce business optimism in New Jersey?

Author: Scarinci Hollenbeck, LLC

Date: January 11, 2018

Key Contacts

Back

Regardless of Increasing Optimism, New Jersey Businesses Are Leery About the Potential Impact of a Statewide Minimum Wage Increase

New Jersey businesses are increasingly optimistic as we head into 2018. Nonetheless, many are leery about the potential impact of a statewide minimum wage increase.

New Businesses Cautious About Impact of Potential Minimum Wage Increase
Photo courtesy of Vitaly (Unsplash.com)

The New Jersey Business & Industry Association (NJBIA) recently published the results of its annual Business Outlook Survey. On a positive note, New Jersey businesses are projecting increased performance on a number of fronts, including employment, sales, and profits. At the same time, worries remain about the state’s economy and the cost of doing business in New Jersey. The prospect of a $15 minimum wage topped the list of specific concerns cited by the respondents.

“New Jersey’s economy is strong. Businesses overall are continuing to see steady economic growth,” said NJBIA President and CEO Michele Siekerka. “We are seeing guarded optimism as to whether these trends will continue in 2018. That sense of caution is resulting from the uncertainty about policy changes that a new governor and administration generally tends to bring. Of continued concern, this year is the more familiar challenge of the overall high cost of doing business in New Jersey versus other states.”

In total, 1,010 NJBIA members responded to the survey. Most respondents were small businesses, with 68 percent reporting fewer than 25 employees and 11 percent with 25 to 49 employees.

Many NJ Businesses Optimistic for 2018

Most businesses expect 2018 to be better than 2017. Below are several key findings of the Business Outlook Survey:

  • Fifty-eight percent expected sales in 2018 would rise and only 9 percent said sales would fall. The net positive of +49 percent is notably higher than last year’s forecast of +38 percent.
  • Fifty-one percent said actual sales were up in 2017, compared to 24 percent who said sales were down. The net positive of +27 percent is considerably higher than last year’s 12 percent net increase.
  • Fifty-five percent forecasted that profits will increase in 2018, compared to 12 percent who expect profits to fall. The net positive of +43 percent is higher than last year’s forecast of +31 percent.
  • Thirty-one percent of members said they would increase hiring in 2018, while 6 percent said they would decrease employment for a net positive of +25 percent. Last year, a net positive of +20 percent forecasted increased employment.
  • Sixty-nine percent said they would provide wage increases in 2018. 60 percent will give raises ranging from 1 to 4.9 percent. In 2017, 67 percent gave wage increases – the same percentage as in 2016.
  • Forty-nine percent said they would increase the dollar value of their purchases, while 10 percent expect the dollar value of their purchases to go down for a net positive of +39 percent. This is higher than last year’s forecasted net positive of +27 percent.

Concerns Raised by NJ Business Community

Many of the top challenges raised by New Jersey businesses are familiar. As in the past, NJBIA members listed health insurance costs as their most significant concern. Overall, 30 percent cited it as their top concern (up from 24 and 25 percent in the past two years), while 72 percent rated it as one of their top four concerns.

Many businesses also continue to be troubled by the state’s high property taxes. In total, 25 percent reported it as their top concern, and 65 percent listed it among their top four concerns. Meanwhile, the overall cost of doing business in New Jersey was cited by 18 percent as their top concern, and 68 percent included it among their top four concerns.

The majority of business owners believe that New Jersey is not competitive with other states in several key categories, including taxes, fees, and controlling healthcare costs. In addition, only 24 percent of members believe that New Jersey had made progress in easing regulatory burdens over the last year. In light of these perceptions, it is not entirely surprising that while 43 percent of New Jersey businesses surveyed indicated that they are planning to expand, only one-third plan to expand and would open another location in New Jersey. Meanwhile, two-thirds plan to expand in another state.

Minimum Wage Increase Worries

Minimum wage hikes also ranked high on NJBIA members’ list of concerns entering 2018. The survey revealed that more than 60 percent of the responding businesses would be impacted by an increase in the state’s hourly wage. To offset higher wages, most would make cuts in other areas. Specifically, 30 percent of businesses said they would raise prices to offset the wage increase, 29 percent would reduce staff levels, and 27 percent would reduce hours. Just 11 percent would respond with greater automation.

For more information about the survey or if you have any questions, please contact me, Michael A. Jimenez, Esq., Counsel in Scarinci Hollenbeck’s Corporate Transactions & Business Group, at 201-806-3364.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Dissolving Your Business: Essential Legal Steps to Protect Your Interests post image

Dissolving Your Business: Essential Legal Steps to Protect Your Interests

If you’re considering closing your business, it’s crucial to understand that simply shutting your doors does not end your legal obligations. Unless you formally dissolve your business, it continues to exist in the eyes of the law—leaving you exposed to ongoing liabilities such as taxes, compliance violations, and potential lawsuits. Dissolving a business can seem […]

Author: Christopher D. Warren

Link to post with title - "Dissolving Your Business: Essential Legal Steps to Protect Your Interests"
The Role of Corporate Restructuring in Mergers & Acquisitions post image

The Role of Corporate Restructuring in Mergers & Acquisitions

Contrary to what many people think, corporate restructuring isn’t all doom and gloom. Revamping a company’s organizational structure, corporate hierarchy, or operations procedures can help keep your business competitive. This is particularly true during challenging times. Corporate restructuring plays a critical role in modern business strategy. It helps companies adapt quickly to market changes. Following […]

Author: Dan Brecher

Link to post with title - "The Role of Corporate Restructuring in Mergers & Acquisitions"
Crypto Enforcement: A Former Prosecutor’s Warning to Criminals and the Public post image

Crypto Enforcement: A Former Prosecutor’s Warning to Criminals and the Public

Cryptocurrency intimidates most people. The reason is straightforward. People fear what they do not understand. When confusion sets in, the common reaction is either to ignore the subject entirely or to mistrust it. For years, that is exactly how most of the public and even many in law enforcement treated cryptocurrency. However, such apprehension changed […]

Author: Bryce S. Robins

Link to post with title - "Crypto Enforcement: A Former Prosecutor’s Warning to Criminals and the Public"
Understanding Chattel Paper: A Key Component in Secured Transactions post image

Understanding Chattel Paper: A Key Component in Secured Transactions

Using chattel paper to obtain a security interest in personal property is a powerful tool. It can ensure lenders have a legal claim on collateral ranging from inventory to intellectual property. To reduce risk and protect your legal rights, businesses and lenders should understand the legal framework. This framework governs the creation, sale, and enforcement […]

Author: Dan Brecher

Link to post with title - "Understanding Chattel Paper: A Key Component in Secured Transactions"
Crypto Compliance: A Comprehensive Guide post image

Crypto Compliance: A Comprehensive Guide

For years, digital assets operated in a legal gray area, a frontier where innovation outpaced the reach of regulators and law enforcement. In this early “Wild West” phase of finance, crypto startups thrived under minimal oversight. That era, however, is coming to an end. The importance of crypto compliance has become paramount as cryptocurrency has […]

Author: Bryce S. Robins

Link to post with title - "Crypto Compliance: A Comprehensive Guide"
Supreme Court and Title VII: Implications for Reverse Discrimination post image

Supreme Court and Title VII: Implications for Reverse Discrimination

Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]

Author: Matthew F. Mimnaugh

Link to post with title - "Supreme Court and Title VII: Implications for Reverse Discrimination"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!