Twenty states raised their minimum wage on Jan. 1, giving a much-needed pay hike to some of the most vulnerable workers during the COVID-19 pandemic.

New Jersey Governor Phil Murphy raised the state’s minimum wage by $1 to $12 an hour. Murphy, who is running for re-election this year, is working toward $15 an hour by 2024.

Proponents say the higher wage will help lift some low-income workers out of poverty, but critics say now is not the time to be squeezing small businesses already hurting during the pandemic.

“No more mandates,” Michele Siekerka, CEO of the New Jersey Business and Industry Association (NJBIA) told Yahoo Finance Live. “Businesses are strangled by mandates — every one of them costing money.”

Siekerka argued that small businesses in the state have been burdened by mandated shutdowns, indoor occupancy caps, reduced hours and the added cost of personal protective equipment and cleaning measures.

“Those who are going to be paying the additional dollar right now are those most dramatically affected by COVID and the slowdown in our economy in New Jersey,” said Siekerka. “We really have to think about who is the most directly impacted, and how could they possibly take another expense on their balance sheet right now, when they are significantly challenged on raising revenue, even just to keep their head above water?”

Siekerka said it’s important to recognize that those businesses who can afford to pay more than the minimum wage have already been doing that. She lobbied Murphy to implement an emergency delay option on the state’s minimum wage hike. Virginia, for instance, rolled back its $9.50 start date to May 1 from Jan. 1, citing economic hardship. “It's just about hitting the pause button,” she said.

Twenty-nine states now have minimum pay above the federal rate of $7.25, where it’s been stuck since 2009. The U.S. House of Representatives, led by Democrats, passed a bill in July 2019 that would gradually increase the federal minimum wage to $15 through 2025, but the measure died in the GOP-controlled Senate.

Siekerka fears the added wage expense will force businesses to tighten their belts in other ways.

“At the end of last year, we did an annual business outlook survey. And our members told us that either cutting jobs, cutting hours, increasing cost and cutting benefits were all on the table. And we don't want to see any of those things happen, because all of those are negatives on our economy,” she said.

Siekerka is seeking more relief programs for small business from the state. On the federal level, she’s glad to see the latest stimulus bill include relief for nonprofits, something that was left out of the first round of pandemic relief.

“We'll take anything that we can get,” said Siekerka. “These [nonprofits] are intricate to serving our vulnerable population and being the liaison to so many in the state. We need to make sure that they survive as well.”

Alexis Christoforous is an anchor and reporter for Yahoo Finance. Follow her on Twitter @AlexisTVNews.

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