Lakeland, FL- BusinessVoice Inc. of Greater Lakeland (BV) has announced its opposition to Amendment 2- the Raising of Florida Minimum Wage. The members of the Political Action Committee (PAC) met on September 23, to discuss the General Election on November 3rd. It is the belief of BV that the passing of Amendment 2 will have long lasting negative impacts on the business community, its employees, and consumers.
While Amendment 2’s verbiage is not complex on the surface, voters should consider the long-term impact of a mandated minimum wage increase. The ballot language, as it is currently written, is as follows:
Raises minimum wage to $10.00 per hour effective September 30th, 2021. Each September 30th thereafter, minimum wage shall increase by $1.00 per hour until the minimum wage reaches $15.00 per hour on September 30th, 2026. From that point forward, future minimum wage increases shall revert to being adjusted annually for inflation starting September 30th, 2027.
At first glance, the increase appears to benefit employees. However, Florida TaxWatch President and CEO Dominic Calabro has been documented stating, “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. 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.”
Contrary to its intended result, Amendment 2 figures to negatively impact employees over an extended period. This increase in employee wages is not sustainable for any business, but especially in such an expedited fashion as proposed by Amendment 2. A 77% increase in labor costs is projected by the time of full implementation. Such an increase will force businesses to cut employee hours and increase automation in order to minimize the impact on its operations. Municipalities who have initiated a similar wage increase, such as Seattle, WA, have had job growth stall as a direct result of the increase of the minimum wage. These results were not immediate but occurred when Seattle’s ordinance went into its second phase increasing the minimum wage to $11.00 an hour.
Local businesses have been hit hard in 2020 by the COVID-19 pandemic and the passing of Amendment 2 will place added strain on our small business community. Industries such as hospitality, who have already felt the devastating impact of the pandemic, will suffer greater distress with the proposed increase in the minimum wage under Amendment 2. The Florida Restaurant and Lodging Association’s website reports, “Most tipped employees earn far more than the minimum wage of $8.46/hour, and many make more than $15/hour. If a mandatory $15/hour minimum wage is passed, businesses will move away from a tipped employee and towards automation or hourly employees.”
The minimum wage is intended to be an entry-level wage. The Florida Chamber has provided information on the direct impact on Florida citizens. Currently, fewer than 2% of Florida’s full-time equivalent employees earn minimum wage. The increase will jeopardize more than 500,000 training wage jobs for young people, seniors, and those looking to gain new skills. Florida’s starting wage is already 18% higher than the federal minimum wage – the highest among surrounding states. Florida could lose more than half a million jobs by 2026. For further information from the Florida Chamber, please visit www.flchamber.com.
It is anticipated that an increase in the minimum wage under Amendment 2 will lead to:
- A reduction in the number of employees throughout Florida
- A reduction in the number of hours employees work
- An increase in automation as a replacement for employees. An increase in costs for goods and services for all Florida residents. A 10% rise in the minimum wage causes a 30% increase in the cost of goods.
- The elimination of a number of entry-level positions
“In a hurting pandemic economy, the best way to get more dollars in the pockets of working families is to make job creation for companies easier, not harder.” stated BV Chair James Ring. He went on to say “A $15 minimum wage will encourage businesses to hire robots over people and price out thousands of Floridians from employment opportunities and their livelihoods. The road to higher wages is through acquired experience and higher education, not saddling job creators and entrepreneurs with costly regulations. BusinessVoice encourages all Floridians to vote “NO” on Amendment 2.”