By Madison Russ
Most minimum wage workers likely noticed a boost to their pay earlier this month, yet some business owners continue to be concerned about rising labor costs.
As of Jan. 1, New Jersey’s minimum wage increased by 36 cents to $15.49 an hour as part of an annual cost of living adjustment stemming from a 2019 law enacted by Gov. Phil Murphy.
“Aligning the state minimum wage with any increases in the cost of living is a critical step towards economic fairness and security for all New Jersey workers,” said Labor Commissioner Robert Asaro-Angelo in a statement last October.
For seasonal and small business employees, the minimum wage is now $14.53, up from $13.73, and will continue rising until 2028 to ease the impact on employers. Agricultural workers have a separate minimum wage timetable that will gradually increase until 2030, and their minimum wage is now $13.40, up from $12.81.
Additionally, long-term care facility direct care workers and tipped employees’ minimum wage rates rose 36 cents to $18.49 and $5.62, respectively. Employers must ensure tipped workers’ total earnings meet the state minimum wage and pay any differences.
Although the governor has previously indicated he’d support raising the minimum wage to $18 to $20 an hour, some small businesses in the area are already feeling the pinch.
Barbara Stafford Jones, president of the Cape May County Chamber of Commerce, which represents 850 businesses, said the county’s $7.8 billion tourism industry, largely composed of restaurants, beach and boardwalk vendors, hotels, motels and commercial and recreational fishing, would be “unreasonably hindered” in trying to comply with an increase in the minimum wage.
“Already, small businesses are taxed to the limit,” she said. “Raising the minimum wage is going to eliminate jobs in Cape May County, and we saw that this year.”
Stafford Jones explained that the increase in minimum wage, coupled with the area’s reliance on tourism, has forced some businesses to raise prices and reduce hours, among other impacts.
“When we’re relying on three months to make our way through the whole year, it has a detrimental effect. It’s not having the effect I think they thought it would have,” she said. “It’s got to get cheaper to do business here. It’s not a business-friendly state.”
Small business owner Liz Ellison-Saunders, who runs Baked By The Ocean in Marmora, said rising labor and operating costs have forced her to increase prices. Once staffed with 17 employees and open seven days a week, her business now has just three employees and operates only four days a week.
“When I first started this business, it cost me $800 a week to fill the bakery with ingredients. Now, it costs me $2,500 a week. On top of that, I used to have a pretty decent size team here, but I simply cannot afford it anymore,” she said. “I had dreams of adding benefits — that’s done. I’m not even contemplating that right now.”
Along with minimum wage increases also comes the pressure to increase pay for her skilled workers to keep them well above the minimum wage and remain competitive.
Ellison-Saunders said she’s increased prices by around 13% since 2022. Between rising costs and taxes, which she said can be “crippling,” she’s often working 60 to 70 hours a week, making under minimum wage herself, and often dealing with customers frustrated about price increases — some of those customers, she said, end up not coming back.
In Ocean City, Erin Oechslin and Brooke Weidlich, co-owners of Bungalow Bowls, have also faced rising expenses. Oechslin noted that since they opened in 2018, the cost of products — everything from spoons to produce — has doubled, especially since the pandemic.
They’ve raised prices twice since opening, but during the busy summer months, it’s not an option for them to cut down on staff. The combination of the costs of goods and labor and keeping prices fair for customers while still putting out a high-quality product has been difficult for them.
“If products and our inventory weren’t so astronomical, then I don’t think we would even bat an eye at labor costs because we love our employees. We appreciate our employees. We want to pay them a living salary and living wages,” said Weidlich.
Both Ellison-Saunders and Oechslin voiced concerns about the future of small businesses.
“Small businesses are not going to survive if the minimum wage continues to go up, as well as the cost of product, and people are going to start to close because it’s not worth the stress,” said Oechslin.
According to the New Jersey Business & Industry Association’s annual Business Outlook Survey, only 4% of business owners felt that state lawmakers did enough to address business affordability.
The survey also found that inflation was also a struggle: more than half felt they were substantially impacted by inflation when it came to supplies and materials, while 48% said they were substantially impacted by inflation for labor costs. For the second year in a row, 61% said prices for their products or services increased in 2024.
“We should be proud of our small businesses that, no matter what is thrown at them, we can bring millions of people in, service them and have even great concerts like Barefoot,” said Stafford Jones. “It’s a phenomenal county: great restaurants, great food, breweries, wineries. But underlying, there are some big issues, and Trenton needs to start to listen.”
Looking ahead, Oechslin and Weidlich said they’re “rolling with the punches” and feel lucky for the support they receive from the community.
“We’re able to stay open in January when it’s 20 degrees out. Obviously, we’re not as busy as we are when it’s July Fourth weekend, but we’re able to stay open because the community shows us support, and that’s amazing,” said Oechslin.
