New Jersey's minimum wage is going up 13 cents from $8.25 to $8.38 an hour at the start of the New Year.
A state constitutional amendment, endorsed by voters in 2013, requires annual increases in the minimum pay rate to keep pace with inflation.
But Laurie Ehlbeck, state director of the National Federation of Independent Business, said many small businesses aren't hiring because of higher wage costs.
"Any little bit at this point hurts our very small businesses. Many of them are struggling just to keep their doors open," she said.
Jon Whiten, deputy director of New Jersey Policy Perspective, disagreed with that assessment, saying the increase won't have much effect on employment.
"We are seeing plenty of growth in the sectors where low-wage workers are found. So to say this is going to be a job killer or lead to layoffs is just not the case," he said.
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What's more, Whiten said, the 176,000 workers who get the higher minimum will spend it on necessities, helping boost the state's economy.
"It's a pretty minimal dollar amount impact," he said. "It's only 13 cents, a 1.59 percent raise. So it's good that it's happening, but it's clear that the minimum wage still remains far below any sort of living wage in New Jersey."
Businesses are concerned about the cumulative impact of state mandates, according to the New Jersey Business and Industry Association.
"It's the minimum wage, it's the possibility of sick leave, it's the Affordable Care Act," said Stefanie Riehl, assistant vice president of the association. "And it can be a challenging business environment as a result of all of these things being piled on businesses.
