Published: January 2, 2010

Some New Jersey business leaders are crying foul over legislative proposals that they say will cost the state money and jobs amid tough economic times, while proponents argue for needed cash in the pockets of low-wage workers.

Four bills awaiting final votes during the Legislature's lame-duck session would extend wage laws to new sectors of the workforce, including school cafeteria workers, custodians at state buildings, and builders of affordable housing meant to be sold.

Supporters say the changes would guarantee fair wages for people like Delores Jakob of Lumberton, known as "Miss D" at Bobby's Run Elementary School, where she makes desserts and salads, and runs the cash register.

Jakob, 63, is one of about 8,000 contracted school cafeteria workers in the state, and makes $8 hourly for 261/4 hours per week with no health benefits. The proposal could add as much as $5 per hour to her wage.

The Office of Legislative Services has estimated that the change to food service contracts could cost school districts $34.2 million when those contracts are renewed.

Philip Kirschner, president of the New Jersey Business and Industry Association, said it's one thing to expand prevailing wage laws during boon times, but the changes should not be considered now.

"We're not talking a few pennies here," he said. "It's just mind-boggling that legislation like this would be seriously considered at a time when the economy is so poor, and both state and local governments are struggling to meet the budgets that they have."

The state is required to pay prevailing wages on public works projects. The rate is determined by the federal government on a county-by-county basis, according to the contract in each trade and locality that covers the most workers. Such rules are generally thought to favor unionized firms.

Three bills would extend prevailing wages to food and custodial service contracts, projects to build affordable housing for sale that receive state loans, and major maintenance projects on state buildings, such as sewer line overhauls. All have sponsorship from legislators who work for unions.

A fourth bill would fast-track another passed last year. The Legislature approved a measure in July directing the Board of Public Utilities to write rules requiring prevailing wages to be paid on projects that receive board funding, such as rebates to businesses that install renewable energy systems.

Gov.-elect Christopher J. Christie has vowed to suspend any new rule-making for 90 days after he takes office. That would give more time to a task force led by Lt. Gov.-elect Kim Guadagno and charged with identifying regulations that should be repealed or amended.

The bill would direct the BPU to move ahead without a rule-making process. Kirschner said it was an "end run" around Christie.

Guadagno's task force has begun talking with chambers of commerce and business leaders, Kirschner among them. Christie spokeswoman Maria Comella said she did not know whether the prevailing wage would be among the issues taken up.

Jeff Tittel, director of the New Jersey chapter of the Sierra Club, said he was worried about whether changes at the BPU will slow renewable energy projects by increasing costs without increasing incentives.

"It may undermine people's willingness to make that investment," he said.

Senate Majority Leader Stephen Sweeney (D., Gloucester), an organizer for the International Association of Ironworkers, is a sponsor of three of the bills. A spokesman said the senator was listening to concerns from affordable-housing developers about whether paying the prevailing wage might hinder construction.

The prevailing wage is required on rental developments that receive loans from the Housing and Mortgage Financing Agency. The proposal would make the same requirement of developments of housing for sale that also receive loans.

The union pushing for changes for school cafeteria workers, Service Employees International Union Local 32BJ, disputes the claim that the wage change will be costly to the state and local school districts.

Bring those workers out of poverty and they may stop costing the state money through food stamps or other social services, the union says. According to area director Kevin Brown, New Jersey cafeteria workers cost the state FamilyCare program more than $7 million yearly.

When Jakob was feeling shaky with pains in her chest a few months ago, she put off seeing a doctor until she ended up in the emergency room. The state's Charity Care picked up the $7,000 bill for her visit, she said, but she has hundreds of dollars more to pay for lab tests and physician bills. And she still doesn't have a diagnosis.

"As hard as I work, it doesn't seem like I can get anywhere," she said.

Jakob works for food service giant Sodexo. She said extra income could pay for a follow-up appointment with a physician that she's been putting off.

To the school districts - and lunch eaters - a new law could mean higher direct costs. Beth Ann Coleman, business administrator for the Collingswood School District, said the district might have to raise the cost of school lunches if the wage change goes through. "We hate to do that," she said.

Robert Corrales, spokesman for Gov. Corzine, said the governor would review the bills if they reached his desk.