As a tough economy stretches resources, a Democratic legislator said the lifeline for New Jersey families relying on a minimum wage job is thinning -- and soon it may snap.
Residents struggling to find work in the recession turned to lower-paying jobs to get by, but the situation hasn’t improved, Assemblyman Wayne DeAngelo, who represents parts of Mercer and Middlesex counties, said in a letter to the editor published Feb. 27 in The Times of Trenton.
"Since the economy is slow to grow, these jobs have become permanent, thereby cementing the reality that the minimum wage simply is not a sustainable salary for New Jerseyans," DeAngelo wrote. "At the current New Jersey minimum wage, a full-time employee earns only $15,080. In comparison, the federal poverty level for a two-person household is $15,130. If we keep the minimum wage at the current level, then single-parent families earning the minimum wage at a full-time job will live in poverty in New Jersey. We can’t sit idly by while parents raising their children cannot financially support themselves or pay the bare minimum of daily expenses while earning the minimum wage."
Is the state’s minimum wage too little to lift a single-parent family out of poverty, as DeAngelo suggests? PolitiFact New Jersey found the assemblyman is right.
A plan to raise the state’s minimum wage from $7.25 per hour to $8.50 per hour, then adjust it annually based on any increase in the Consumer Price Index, is coursing its way through the state Legislature.
But currently, full-time workers with minimum-wage jobs earn roughly $15,080 annually in New Jersey before taxes if they work 40 hours a week, every week of the year.
The federal government releases two measures of poverty. The U.S. Census Bureau sets poverty thresholds using income before taxes, which are used primarily for statistical purposes such as estimating the number of Americans in poverty each year.
The U.S. Department of Health and Human Services sets federal poverty guidelines that are used for more administrative reasons, such as determining eligibility for assistance programs. Agencies may apply different income measures -- before taxes or after taxes -- to the guidelines.
A spokesman for the Assembly Democrats said DeAngelo based his statement on the federal health department’s poverty measure. For a family of two, the measure tops off at $15,130. That’s $50 more than the gross income of an individual working full-time at a minimum wage job. For comparison, the Census Bureau’s poverty threshold is $15,504 for a two-person household with a parent and child.
As the size of a household grows, the poverty measure increases. For a family of four, the federal health department’s guideline is $23,050. The Census Bureau’s threshold, which changes depending on the number of children under 18 in the household, is $22,891 for a family of four, with one parent and three children.
There’s debate about the overall economic benefits of an increase in the minimum wage. We’re not wading into that argument in this Truth-O-Meter item.
But in the scenario DeAngelo highlights, the annual earnings for a full-time worker would increase to $17,680 if New Jersey increased its minimum wage to $8.50 per hour. That’s $2,550 more than the health department’s poverty guideline for a family of two, but still less than the guidelines for any other size household.
The assemblyman said: "If we keep the minimum wage at the current level, then single-parent families earning the minimum wage at a full-time job will live in poverty in New Jersey. "
A New Jersey resident working full-time at a job paying the state’s minimum wage of $7.25 per hour makes roughly $15,000 annually. For a family of two, the federal health department’s poverty guideline is $15,130.
We rate the claim True.
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Editor's Note: A research fellow with the business-backed Employment Policies Institute took issue with this ruling. We address his points in this story.