TRENTON - New Jersey's minimum wage should immediately be increased to $8.25 per hour, then boosted annually to keep pace with inflation, a state commission has recommended.

New Jersey's minimum wage is $7.15 per hour.

The recommendation was the first by the Minimum Wage Advisory Commission since it was created by legislators two years ago.

The increase, which would have to be approved by the Legislature and Gov. Corzine, would give New Jersey the nation's highest minimum wage, according to the U.S. Department of Labor.

The state panel found the $7.15-per-hour level no longer has the purchasing power it did when it was implemented in October 2006.

"New Jersey's minimum-wage workers are struggling to make ends meet," said Labor Commissioner David J. Socolow, chairman of the Minimum Wage Advisory Commission. Without an immediate increase and annual cost-of-living increases, "these workers fall even further behind," he said.

At $7.15 per hour, a minimum-wage worker earns about $2,000 less than the federal poverty level of $17,160 per year. An $8.25-per-hour wage would bring that worker even with the poverty level.

New Jersey could become the 11th state to index its minimum wage to inflation. Arizona, Colorado, Florida, Missouri, Montana, Nevada, Ohio, Oregon, Vermont and Washington already do so.

"Minimum-wage workers in New Jersey need a raise and a real opportunity to lift themselves out of poverty through their hard work," Socolow said.

Some say the increase would be too much, too soon.

"Small businesses that rely on entry-level minimum-wage employment simply cannot afford this increase in a single step," said Philip Kirschner, president of the New Jersey Business and Industry Association.

"As these businesses struggle to try to cope with other rising costs, such as energy and transportation, they simply can't afford a 55 percent increase in wages over three years," Kirschner said.

In 2005, the state's minimum wage was $5.15 per hour. The Legislature increased it to $6.15 that year, then to $7.15 in 2006.

Corzine spokeswoman Lilo Stainton said the governor would review the report but supported its recommendations.

"The governor believes that New Jerseyans who work hard and play by the rules should be able to make a decent living," Stainton said.