New Jersey's 13th Legislative District

Senator Declan O'Scanlon

District 13

O’Scanlon & DiMaso Warn of Net Losses to Low-Income Earners from Minimum Wage Increase

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Senator Declan O’Scanlon and Assemblywoman DiMaso (both R-Monmouth) warned fellow lawmakers today that efforts to increase the minimum wage to $15 an hour currently being pushed through the legislature might have severe, unintended consequences.

Sen. Declan O’Scanlon and Assemblywoman DiMaso warned fellow lawmakers today that efforts to increase the minimum wage to $15 an hour might have severe, unintended consequences. (SenateNJ.com)

“The impact this minimum wage legislation could have on the State budget, and further, the entire State economy, cannot be understated here. The Senate President confirmed today that the cost is anywhere from $300 to $600 million on the budget. How can we possibly talk about adding that kind of expense to our budget when we already have a massive budget hole? It’s irresponsible,” O’Scanlon said.

“A large number of these residents are reliant on programs like Medicaid, food stamps, and utility assistance. If you rapidly increase someone’s pay to $10 an hour in the next year and assume there isn’t any impact to their number of hours or job safety, something we know will happen due to the devastating impact on small businesses, then those workers won’t be eligible for lower cost health benefits through the Medicaid expansion,” DiMaso added.

New Jersey chose to maintain the Medicaid expansion which helped more than 500,000 residents keep access to healthcare, many of whom are minimum wage workers. The federal government largely holds authority over the income guidelines for Medicaid along with other benefits programs like SNAP and LIHEAP/USF.

“Any increase to their income is going to be eaten up by their net losses from Medicaid and other assistance programs. You can do the simple math here and realize a $2-per-hour increase gives a full-time worker another $300 a month before taxes. Maybe, they now need $100 a month for health insurance, because they lost $100 from food stamps, and $50 from utility assistance. After taxes they are still going to be struggling to pay their bills and could possibly be worse off financially than they were before. You’re going to wind up with even longer lines at food pantries if you aren’t careful,” O’Scanlon added.

“This is indicative of what happens when you don’t fully-engage with all stakeholders before trying to get legislation passed quickly,” DiMaso added. “Having families kicked off Medicaid and utility assistance, and even potentially lose housing, while we wait for years for the federal government to consider changing eligibility for these programs isn’t helpful. This is adding to the growing number of struggling middle class families who can’t afford to pay their bills but aren’t eligible for the short-term helping hand they might need to get by. Food banks across the state have been stretched thin as middle class families struggle to make ends meet under constant new tax burdens.”

“We should also consider the community of developmentally disabled residents who take positions at supermarkets and other businesses to earn money and increase socialization time,” O’Scanlon continued. “The food industry has indicated that these positions would wind up being eliminated, or the hours severely reduced. Furthermore, all of our service providers for the mentally ill, developmentally disabled, and addicted have made it clear they would be devastated by this if we don’t simultaneously increase their funding-yet another tax increase on the backs of our already beleaguered taxpayers. There are so many potential net losses here that haven’t been properly discussed.”

“We will always be in favor of residents being able to support themselves without having to rely on safety net programs, however, this just shows that leadership is pushing a bill through that could harm the very people they claim to want to help,” DiMaso said. “This increase could potentially bankrupt community provider organizations and leave a massive service void for these struggling families that volunteers and charities alone cannot handle. We’re already taxing our residents out of the state, we can’t add another nail to that coffin.”

“I serve on the State Manufacturing Caucus, and this legislation coupled with last year’s tax increases and further sick leave mandates goes against everything that we’ve heard from critical employers as we’ve traveled around the state. We have local businesses in our district, like one of the finest Irish pubs in the state, that our absolutely terrified about their operational capacity as a result of this potential increase. When attempting to help lower income residents who are struggling, the Senate Majority must consider the large scale consequences that could hurt the very same people they are trying to help. Ramming through legislation without having these important discussions is a recipe for disaster.” O’Scanlon concluded.

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