The Pew Charitable Trusts

Governor Chris Christie has conditionally vetoed legislation that would have boosted New Jersey’s minimum wage. Instead, he proposed a compromise that New Jersey lawmakers appear unlikely to accept.

The bill, passed last month by the Democrat-controlled legislature, would have raised the state’s minimum wage to $8.50 per hour, adjusting it annually for inflation. At $7.25, the state’s current required pay is the lowest allowed under federal law.

In the veto issued Monday (January 28), Christie called the legislation a “lopsided approach” that could have prompted small business owners to cut payroll, raise prices or flee the state. But the governor offered a compromise — an incremental $1 hike over three years with no annual adjustments, along with an increase to New Jersey’s Earned Income Tax Credit, which benefits low- to middle-income workers.

In 2011, Christie cut the credit from 25 percent of the federal benefit to 20 percent, angering Democrats. His latest proposal would restore what he cut.

It appears Democrats will reject the offer, opting instead to continue pushing a larger hike through a constitutional amendment. That proposal, which would require passage in both chambers and the approval of voters during this year’s election, would add a dollar with annual adjustments.

Assembly Speaker Sheila Oliver said the veto “leaves us no choice but to send this matter to the voters.”

“Governor Christie should have sided with Democrats and ensured an immediate livable wage for all residents,” she said in a statement.  “Any proposal that lacks annual adjustments to ensure wages keep pace with the economy is not a real solution.”

New Jersey isn’t the only state debating its minimum wage. In California, where the state’s $8-per-hour minimum wage has remained the same for five years, Assemblyman Luis Alejo, a Democrat, is pushing a bill that would gradually raise it to $9.25 by 2016. The last attempt to adjust the state’s minimum wage in 2011 met strong pushback from the business community.