New Minimum Wage Law Could Either Sink Or Revive FL Economy

FLORIDA – As the coronavirus pandemic shortened the 2020 legislature in Florida, Florida political leaders admitted that this was not the year to promote new agendas and tackle breakthrough laws.

Florida voters didn’t need their elected officials to pass controversial laws that, depending on the forecaster’s policies, could either save or destroy the state.

During the November 3rd general election, 60 percent of Florida voters approved Amendment 2 to the Florida Constitution, which will raise the minimum wage from the current $ 8.56 an hour to $ 15 an hour over the next six years.

The first phase will take effect in September 2021 when the wage increases to $ 10 per hour. The minimum wage then increases by $ 1 each year until it hits $ 15 an hour in 2026.

(Another formula applies to servers and other employees who rely on tips for their services. Click here.)

The law applies to all wages paid by public and private sector employers, regardless of the size of the company or the number of employees.

After September 30, 2027, the Florida Department of Economic Opportunity will adjust the minimum wage annually based on changes in the consumer price index for urban wage earners and office workers.

Florida is the eighth state in the country and the first in the south to increase its minimum wage to $ 15 an hour. California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, and New York have also approved the legislation.

The move has been backed by civil rights groups, labor organizations and social services who claim that it is simply not possible for a family to live on a wage of $ 8.56 an hour or $ 17,804.80 a year.

In a statement to Patch, Adrianne Shropshire, executive director of the Black Progressive Action Coalition Florida, said Florida’s adoption of the minimum wage bill will raise the salaries of 2.5 million Florida workers over the next five years.

“This is a historic moment when black voters in Florida and across the country led a significant turnout, overcoming rampant voter suppression and a global pandemic in support of leaders and policies that can transform our nation,” said Shropshire. “With the passage of Amendment 2, voters have made significant strides toward racial and economic justice, and ensuring that working people across Florida can support their families. Black families will be directly and positively affected by this action, which is beginning, that Racist pay gaps resolve decades of systemic racism.

Kelley Sims, development director for Feeding Tampa Bay, said her organization is already struggling to help residents raise families on Florida’s minimum wage. The coronavirus pandemic has only irrevocably shown how close families in Florida are to being forced onto the streets as thousands have lost their minimum wage jobs.

Nearly 40 percent of Florida hotel workers have lost their jobs due to the coronavirus pandemic, according to the American Hotel & Lodging Association, and industry lobbyists are warning the number could reach 70 percent by the first quarter of 2021.

“Florida’s unemployment rate fell sharply for the second time since the historic peak of the pandemic in May, dropping from 11.4 percent in July to 7.4,” Sims said. “As early as May, unemployment in the state reached a whopping 14.5 percent.”

As of November, the US Bureau of Labor Statistics in Florida reported an unemployment rate of 10.145 percent.

When Florida Governor Ron DeSantis gave OK to reopening businesses and employers to hiring workers, industry officials are still waiting for the expected economic recovery. However, service and hospitality workers remain within the unemployment limit.

“Low-income households are still feeling the pressure to choose between basic necessities such as rent, mortgage, health care, and having meals,” said Sims, finding that one in six Florida adults is starving.

The increase in the minimum wage will at least give workers a buffer from paycheck to paycheck.

However, Amendment 2 is not widely accepted, especially by small Florida businesses that rely on workers with minimum wages.

The Florida Chamber Foundation, Florida Small Business Development Center Network, and the University of West Florida Haas Center have teamed up to conduct a small business COVID impact survey in October. More than 4,800 people took part in the survey, which covers 95 percent of Florida counties and represents all industries.

The researchers examined the contributions of companies with fewer than 100 employees to the state’s economy and found that 60 percent of net income from new jobs in Florida since 2012 has come from small businesses with fewer than 100 employees, highlighting the important role of small businesses in the state confirms economy.

At the same time, the study highlighted the uncertainty that exists among Florida’s 2.7 million small businesses about their ability to recover from the coronavirus pandemic. 60.8 percent said they are extremely concerned about the economy and 45.4 percent expressed doubts about their ability to stay open.

More than half of the companies closed voluntarily or had to close their doors. More than 30 percent said that their business activities were still discontinued at the time of the survey.

With 85.1 percent of business executives surveyed indicating a loss of revenue, a majority of businesses have taken advantage of aid programs and received PPP loans. However, these companies say additional support is needed to stay open.

The Florida Chamber Foundation continues to track the growth of companies with fewer than 100 employees using a new scorecard. Visit TheFloridaScorecard.org and click the Innovation and Economic Development icon above.

Patch received dozens of letters from business associations including the Associated Builders and Contractors of Florida, Associated Industries of Florida, the Florida Roofing and Sheet Metal Contractors Association, the Florida Chamber of Commerce, the Florida Home Builders Association, the Florida Restaurant and Lodging Association, Florida The Petroleum Marketers Association, the Florida Farm Bureau, the Florida Retail Federation, and the National Federation of Independent Business are calling on Patch to oppose Amendment 2.

“Amendment 2 is bad for Florida’s workforce,” Lisa Pate, executive director of the FRSA, told Patch. “This amendment does not belong in the constitution of our state.”

Godfather said the change would hurt, not help, Floridians would go back to work, and continue to weigh on Florida’s fragile economic recovery.

“Florida’s free market conditions and capabilities should be the driving forces behind wages, not government mandates,” she said. “Our contractors, manufacturers, suppliers and consultants are suffering enough from the pandemic. The Florida minimum wage increase now and through our state’s constitution is neither the time nor the place for this kind of change.”

To prove it, the Florida Restaurant and Lodging Association posted a tip wage calculator on their website listing the cost Amendment 2 will have for Florida businesses.

The association is Florida’s non-profit industry association for the hospitality industry, representing more than 10,000 independent hoteliers and restaurateurs, well-known franchises, theme parks and suppliers. Its mission is to protect and promote Florida’s $ 111.7 billion hotel industry, which represents 1.5 million employees.

“This calculator shows the drastic effects of Ballot 2 and shows that mandatory minimum wages can increase labor costs by up to 77 percent,” said Carol Dover, president and CEO of the Florida Restaurant and Lodging Association. “With such an exorbitant increase in wage costs, this election change will force small businesses that are already struggling to close down, destroy the local economy and shed additional jobs.”

Prior to the pandemic, Dover said Florida’s restaurant, lodging and tourism industries had an annual economic impact of more than $ 112 billion and created jobs for more than 1.5 million Florida families.

Given Florida’s dependence on tourism and the hospitality industry, which employs hundreds of thousands of workers on minimum wages, Amendment 2 says Dover has only put fire to one industry that has already been torpedoed.

“This tipped payroll calculator will show Floridians the cold, hard numbers that will affect their bottom line and will ultimately determine whether or not their business will survive,” she said.

“A study of the economic impact found that Florida will lose at least 158,00000 jobs for workers across the state if it passes the election,” Dover said. “Ballot 2 is a job killer that will sustain the hospitality industry. We cannot afford to lose the small family businesses that make Florida unique and account for the majority of the jobs created in the state.”

A recent economic analysis conducted by Miami University and Trinity University found that the coronavirus has already destroyed around 336,000 direct and hotel-assisted jobs, resulting in hundreds of thousands of job losses and billions in sales.

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