Workers making the minimum hourly wage in New Jersey saw a raise on Thursday, Jan. 1, an increase that establishes a statewide rate close to $16 for many workers.
The 43-cents-an-hour pay hike to $15.92 occurred automatically because the state Constitution requires annual cost-of-living adjustments to ensure New Jersey’s minimum hourly wage keeps pace with annual rates of inflation.
The rate of the annual adjustment is based on an analysis of any changes to the federal government’s consumer price index.
In 2024, the rate of inflation required the statewide minimum wage to be moved up by 36-cents-an-hour, to $15.49, for all of 2025.
New Jersey is one of more than a dozen states that have such indexing rules on the books, according to Business for a Fair Minimum Wage, a national network of business owners, executives and business organizations that tracks wage policy across the nation.
Among them is the state of Washington, which also saw its minimum hourly rate rise to the highest-in-the-nation $17.13 on Jan. 1. That’s more than a dollar higher than the $15.92 wage now in effect in New Jersey this year.
Meanwhile, another six states have hiked their respective minimum wages through other mechanisms, according to the Business for a Fair Minimum Wage organization.
“Higher wages strengthen the economy – workers have more buying power and businesses see more consumer demand,” said Mitch Cahn, owner of Unionwear, a Newark-based apparel and accessories manufacturer.
“As a longtime manufacturer of American-made products, we know that when you invest in your employees, you keep experienced employees who are more skilled, efficient and resourceful,” Cahn said. “We see it every day: Strong morale drives strong performance and resilience.”
Still, not all of New Jersey’s nearly 2 million hourly wage workers are getting the $15.92 pay rate.
Written into a state law, championed by Gov. Phil Murphy, that required the state’s minimum hourly wage to reach $15 by 2024, was language allowing for exceptions for several groups of workers that have put them on a slower ramp-up to the $15 threshold.
Among the exemptions are those for thousands of farmworkers and people employed by seasonal and small businesses.
A different set of rules is also in place for thousands of service workers who earn a “tipped” wage, such as bartenders and waiters.
However, the state’s overall minimum wage ramp-up has won praise from advocates for low-income residents as a policy that helps bridge income gaps in a high-cost state like New Jersey, which has a lower rate of overall income inequality than the nation as a whole, according to data tracked by the U.S. Census Bureau.
And while the minimum wages paid to hourly workers in New Jersey are dictated by both the state Constitution and state law, that’s not the case in many other states, according to Business for a Fair Minimum Wage.
In all, 20 states, including neighboring Pennsylvania, have minimum hourly rates that are no higher than the $7.25 federal minimum wage, which has been frozen for the last 16 years, eroding the purchasing power of those wages due to the inflation that’s occurred since 2009.
According to the New Jersey Department of Labor and Workforce Development, the hourly minimum wage earned by the employees of seasonal and small businesses increased to $15.23 on Jan. 1, up from $14.53.
For agricultural workers, employees who work on a farm for an hourly or piece-rate wage, their minimum hourly wage is $14.20, up from $13.40, labor department officials said.
Meanwhile, the minimum cash wage rate for tipped workers grew to $6.05 per hour from $5.62.
For thousands of direct care staff at long-term care facilities, the minimum hourly wage went up by $0.43 on Jan. 1, to $18.92, the officials said.
