EDITORIAL: Should Florida’s minimum wage be raised to $15?

By Tampa Bay Times Editorial Board

Published 10/6/20

Updated 3 hours ago

The Times Editorial Board weighs in with a recommendation on Amendment 2.

Raising the state minimum wage to $15 an hour sounds appealing. The hefty bump would increase the income of hundreds of thousands of Floridians. More people would earn a living wage, enough to pay for food, shelter and other necessities, easing the fear of having to decide between keeping the electricity on or buying prescription medicines. What’s not to like? Well, quite a bit, when you peel back the layers.

The minimum wage debate is often cast as moral champions against unfeeling capitalists. But it’s far more complicated. There’s no glossing over that a $15 minimum wage creates winners, but it always creates losers.

Raising the base wage by so much so quickly will increase costs for businesses. In turn, prices will rise, shifting some burden onto regular Floridians. The ones struggling to make ends meet — even with a $15 minimum wage — will feel more of the pinch. So will unskilled workers who lose their jobs when businesses cut expenses to make up for the higher cost of wages.

If passed, Amendment 2 would raise the state’s $8.56 minimum wage to $10 next September. After that, the wage would go up $1 each year until it reaches $15 an hour in September 2026. That increase is 75 percent over six years. (The wage would then rise with annual inflation, as it does now.)

Florida’s current minimum wage ranks near the middle of the pack among states. Many at the bottom either don’t have a state minimum or adopt the federal minimum of $7.25, including Alabama, Georgia, Texas and the Carolinas. At the upper end, several states, including Arizona, Colorado, Oregon, Washington and Maine, are at or above $12 an hour. And a handful of states have passed laws that will gradually raise the wage to $15 over the next few years. Most of those states, including California, Maryland and Massachusetts, already have minimum wages higher than Florida. They also have median incomes that exceed Florida’s, which means Florida will likely feel a greater impact — for better and for worse — if the minimum rises to $15.

In recent years, companies including Amazon decided to pay employees at least $15 an hour. Bank of America announced a $20 minimum starting next year. But that’s not the same as raising the minimum wage statewide. First, those companies did the math and decided they could afford it. The math on an economy the size of Florida is far more complicated. Before the pandemic, Florida had 230,000 cashiers who collectively averaged less than $11.50 an hour. That’s far more people in just one job category than Bank of America employs in the entire country.

Plus, just as quickly as the companies announced a $15 minimum, they could say “Whoops, we need to go back to $12.” If the state minimum wage is added to the Florida Constitution, a “whoops” is much harder to remedy. It would take passing another constitutional amendment.

The complicated accounting is why so many of the in-depth studies on raising the minimum wage use words like “considerable uncertainty” in predicting the results. Both sides often point to a recent report from the bipartisan Congressional Budget Office, which calculated the effects of raising the federal minimum to $15. The report did not break out numbers for Florida. But, extrapolating from the national figures, about 1.1 million Floridians would see their wages rise and about 80,000 would be lifted out of poverty. The boost would reduce their reliance on food stamps and other government programs. But another 80,000 would lose their jobs, many of whom would then need government assistance.

Another analysis found that a $15 minimum wage would cost Florida more than 158,000 jobs. The number could rise to 181,000 if the hospitality industry grows slower than other industries, according to Ohio’s Miami University professor William Even and Trinity University professor David Macpherson. They prepared the analysis with support from Save Florida Jobs, a group that opposes Amendment 2.

“This estimate is conservative,” the report said. “Hundreds of thousands of additional jobs are at risk.”

Most of the studies also conclude that prices would rise and some businesses would close. How much and how many? That’s complicated, too. But for businesses with lots of employees making less than $15 an hour — think restaurants, bars, and some retailers and tourist attractions — the fallout would be worse. Some people are willing to accept that a take-out hamburger or other indulgences will cost more. Many have the money to absorb the extra cost or are willing to go without. But the price of some necessities will rise too, putting pressure on lower wage earners, even if they are making $15 an hour.

Local and state governments would pay out about $16 million in increased wage costs in the first year, according to the Florida Office of Economic Demographic Research. But that figure balloons to $540 million by 2027, with school districts taking a big hit.

A $15 minimum wage also makes no distinction between different places across the state. The cost of living in Tampa, St. Petersburg or Miami is far different than in Spring Hill, Mayo or Chipley. Smaller places — some already hurting from a decline in agriculture — could see a disproportionate number of jobs evaporate.

Opponents of Amendment 2 also have criticized the timing, and say it’s a bad idea to raise the minimum wage while the state digs out from the economic rubble left by the pandemic. But that argument isn’t as strong. The first increase wouldn’t go into effect for nearly a year, by which time the state should be on much firmer economic footing. They also argue that a higher minimum wage will speed up automation — more self-ordering kiosks at McDonald’s and self-checkout lanes at Home Depot. The connection, though, feels overblown given that businesses have been headed that way for years.

Proponents argue that the Republican-controlled Legislature has ignored the struggles of lower-wage workers and that the only way to enact a $15 minimum wage was to vote to put it to the state Constitution. That’s likely true, but an amendment is not ideal. Amendments are often blunt instruments — all or nothing — while legislative bills can address complex details.

New Mexico recently passed a bill — not a constitutional amendment — raising the state minimum wage to $12 in 2023. But the bill also establishes a training wage for high school students and keeps (and slightly increases) the tipped minimum wage, which allows restaurants and bars to maintain their current pay structure. Some states have raised their minimum wages but adopted tiers based on the size of the business, so that the ones with fewer employees pay a little less.

We would support an amendment that included such refinements and recognized the differences in jobs. We’d also like the Legislature to let cities and counties set their own minimum wages, higher than the state minimum. But Amendment 2 lacks such nuances. It mandates a $15 minimum for every job, regardless of experience, skill level, geography or the size of the business.

People on both sides of the Amendment 2 debate make legitimate arguments. It could help close the wealth gap, but it will also put many people out of work. It will lift people out of poverty but will put some businesses out of business.

Despite its appeal, Amendment 2 is too much, too soon. The risk of unintended consequences outweighs the upside, enough to tip the balance. On Amendment 2, the Tampa Bay Times Editorial Board recommends voting No.

RELATED: All of the Times Editorial Board recommendations

RELATED: How the Times makes its political recommendations.

Editorials are the institutional voice of the Tampa Bay Times. The members of the Editorial Board are Times Chairman and CEO Paul Tash, Editor of Editorials Graham Brink, and editorial writers Elizabeth Djinis, John Hill and Jim Verhulst. Follow @TBTimes_Opinion on Twitter for more opinion news