Posted on Wed, Mar. 16, 2005


Some see small change at $7.15
A worker said the wage still fell short. Most hirers already pay it.

Inquirer Staff Writers

Michelle Seddens, a security guard at Camden City Hall, makes $6.50 an hour - $13,520 a year - checking visitors for weapons.

Across the street, Ron Ford is trying to nurse his fledgling City Coffee shop, selling coffee and snacks to city employees and visitors.

New Jersey's proposed minimum-wage increase would affect both Seddens and Ford, but they represent two very different sides in the debate.

Seddens, 40, is one of the estimated 290,000 workers in New Jersey who make less than $7.15 an hour, the rate that legislators approved Monday and that acting Gov. Richard J. Codey said he would sign into law after Easter. The current $5.15 rate would rise a dollar on Oct. 1 and another dollar a year later. Currently, Washington State, Oregon and Alaska have a minimum wage of $7.15 or higher.

Seddens said that even with the bump, she would have a difficult time providing for her children.

"Fifty cents more," she said with a smirk.

"It's better than $6.50," interjected her colleague Chris Vazquez, 20, of Camden, as he waved his metal detector over visitors.

On Market Street, Ford's coffee shop is the type of business that routinely pays minimum wage, yet a 16-year-old high school student earns $6.50 an hour to work the counter. At McDonald's restaurants in Camden, full-time employees can earn $7.25 an hour.

"It's hard for Camden businesses to attract good people," Ford said, "and we end up overpaying the people we get."

The change in the minimum wage would not affect all employers and employees. Public employees and waiters would remain exempt, as well as hotel and motel workers and farm laborers who receive room and board. The measure also would exempt part-time child-care workers in an employer's home and minors without a vocational-school graduate permit.

Only about a dozen job categories in South Jersey average less than $7.15 an hour, the state Department of Labor and Workforce Development said. They include cashiers, food-service workers, parking-lot attendants, seasonal employees at amusement parks, and food-preparation workers.

But the problem with the minimum-wage increase, business owners said, is that other wages would have to increase, too.

"If you bring a new hire off the street making $7.15 and you have an employee who's been with you five years, they're going to wonder why they're making the same thing as the green person," said William Eubanks, who holds 29 Kentucky Fried Chicken franchises in New Jersey, Pennsylvania and Delaware.

Some of Eubanks' shift managers make $7 to $9.50 an hour, a rate he expects he'll have to increase. Entry-level workers in affluent communities with higher costs of living, such as Medford, already earn more than $7 an hour, Eubanks said. He added that business owners would pass some of the cost on to consumers, but that he might end up closing his less-profitable restaurants.

"You try to mask it as much as you can, but consumers recognize when you've increased the price," Eubanks said. "A taco or a chicken leg is only worth so much. Nobody's going to pay $5 for a drumstick."

Economists have debated whether increasing the minimum wage harms businesses. Princeton University economists David Card and Alan Krueger found that New Jersey's minimum-wage increase to $5.05 in 1992 had not hurt the fast-food industry. They compared New Jersey with Pennsylvania, where the wage remained $4.25.

Economists David Neumark and William Wascher contradicted those findings in the Journal of Public Economics after examining different data. They concluded that New Jersey's higher minimum wage had led to a 4.6 percent decrease in employment relative to Pennsylvania.

Card and Krueger re-researched their data and argued that their original finding was correct. The debate continues.

Camden day-care director Saiyda Muhammad said the minimum wage should not be an "us vs. them" issue. About half her 15 employees earn the minimum wage. Most, if not all, rely on welfare for medical coverage.

"It makes my job a little harder because I need to go out and recruit to bring in more clients, but if I'm going to get employees off welfare, we have to give them a way to be able to financially take care of their family," said Muhammad, director of three Your Future Academy day-care centers.


Contact staff writer Kera Ritter at 856-779-3829 or kritter@phillynews.com.




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