Study: Raising minimum wage would hurt Florida’s small businesses, low-skilled workers

By John Haughey
The Center Square
September 9, 2020

Raising the minimum wage by $1 a year to $15 hourly by 2026 would impose “detrimental effects” on low-skill workers, taxpayers and the state’s 2.5 million small businesses, a Florida TaxWatch (FTW) report published Tuesday concluded.

According to the Tallahassee-based watchdog’s analysis, the proposed Amendment 2 on the Nov. 3 ballot would raise salaries for 3.1 million existing jobs but cost state businesses a projected $7.3 billion by 2026.

“While the road to a $15 state minimum wage may be paved with good intentions and even produce wins for some workers, its negative impacts could produce poor outcomes for too many of the very folks it aims to protect,” FTW President and CEO Dominic Calabro said Tuesday.

“Small businesses will be forced to increase labor expenditures, fixed-income Floridians will be faced with paying higher prices for goods and services, and low-skill workers are likely to receive fewer hours and employment opportunities,” he said.

Florida For A Fair Wage’s proposed Amendment 2 seeks to raise Florida’s $8.46 an hour minimum wage to $10 hourly Sept. 30, 2021, and increase it by $1 an hour each year, capping it at $15 hourly Sept. 30, 2026.

Orlando attorney and Florida For A Fair Wage chairperson John Morgan, who spearheaded the 2016 ballot drive that legalized medical marijuana, did not directly respond Tuesday to FTW’s analysis, but did tweet, “It is ESSENTIAL we raise the minimum wage to $10/hr year one and a dollar a year until $15/hr. Essential workers are counting on us like we count on them!”

Morgan’s law firm has accounted for much of the $5.29 million raised by Florida For A Fair Wage since the political action committee formed in 2017, including $112,751 between Aug. 22-28, according to the Florida Division of Elections (DOE).

The measure is opposed by Save Florida Jobs, created in January by the Florida Restaurant & Lodging Association (FRLA), which includes representatives from Walt Disney World, Universal Orlando, Olive Garden parent Darden Restaurants and McDonald’s.

Save Florida Jobs had raised $281,320 through Aug. 28, DOE reported.

In their fiscal analysis of Amendment 2, state economists’ statement, which will appear on the ballot, concluded raising the minimum wage by $1 each year through 2026 would increase government spending by $16 million in 2022 to $540 million in 2027.

FTW’s study said corporations can absorb the yearly $1 minimum wage hike, but many small businesses will resort to hiring fewer workers, cutting hours or going out of business.

Forcing small businesses “to match higher starting wages currently paid by companies like Amazon and Costco creates an unfair advantage for these larger companies,” FTW said.

Amendment 2 would hurt the “low-wage, low-skilled employee who lose their job and then find it more difficult to find a new job or have hours reduced,” the analysis said. “The higher minimum hourly may discourage businesses from employing low-wage, low-skilled workers.”

FTW said a constitutional amendment is no place for a minimum wage law.

“The state’s constitution should be left as a foundational document, the baseplate upon which our state builds its laws and rules, its rights and responsibilities,” FTW said. “Changing an item in the constitution means less flexibility for the Legislature, both in good times and bad, and it is incredibly hard to remove.”

FTW’s analysis reflected Congressional Budget Office (CBO) findings in analyzing a bill adopted by the U.S. House, the Raise The Wage Act, which would raise the federal minimum wage to $15 an hour by 2024.

CBO’s study projected the bill would boost pay for 27 million workers and lift 1.3 million households out of poverty but also potentially trigger the loss of 1.3 million jobs.

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Bill Owen
Bill Owen (@guest_58885)
3 years ago

The so-called ‘minimum wage is really no such thing. The true minimum wage is zero when, for example, fast food restaurants can replace order takers with automated kiosks that take orders, process credit card payments, etc. No wages, no health care costs, holidays, sick time, workman’s comp expenses…

And the point regarding amending the state constitution to accomplish something like this is a terrible precedent, as are many of the other amendments proposed by mob rule. What happens the next time somebody wants it raised? Another amendment? Can’t go to the legislature since the wage is now part of the constitution. In fact, why have a legislature at that point? Leave it as a foundational document, and let the elected branches of government earn their not-so-minimum wage!