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Floridians passed Amendment 2 to raise the minimum wage, now what?

Higher wages will likely benefit state's budget, policy analyst says
Posted at 5:09 PM, Nov 11, 2020
and last updated 2020-11-11 17:09:48-05

Floridians passed Amendment 2 last week, putting the state on course to gradually increase its minimum wage and reach $15 by 2026. Supporters and opponents are now divided on what comes next. Will it be an economic benefit or bust?

Those opposed to the amendment, like the Florida Chamber of Commerce or Restaurant and Lodging Association, continue to say approval is bad for businesses. They warn job losses and closures are ahead, citing state research and a recent CBO report suggesting 1.3 million would be out of work if a $15 minimum wage is implemented across the nation.

Florida is the eighth state to approve a $15 minimum wage. California was the first in 2016.

Since then, researchers have analyzed the impact of the increases and found -- for the most part -- businesses have been able to absorb the added costs.

In one 2018 study, the University of California-Berkeley analyzed the impact of minimum wage increases on food industry jobs in six U.S. cities. Researchers discovered as pay went up, so too did the number of jobs.

Alexis Davis
Alexis Davis with the Florida Policy Institute believes higher wages will likely benefit businesses and Florida's budget.

"I don't think that there is any reason to expect that this will bankrupt businesses," said Alexis Davis, a policy analyst at the Florida Policy Institute.

Davis has done extensive research on Amendment 2. She said many of the complaints opponents are making today were also made 15 years ago as Florida put its current rate structure in place.

"Those proved to be largely unfounded," she said.

Higher wages, Davis said, will likely benefit businesses and Florida's budget. According to her data, more pay equals more consumer spending and an estimated $577 million increase in sales tax revenue.

"When they receive those pay boosts, they almost always go back out in their communities and spend that money," said Davis.

However, there are still concerns.

Chris Carlozzi, the Massachusetts director for the National Federation of Independent Business, expects Florida, much like his state, will see an impact on job creation.

Chris Carlozzi
Chris Carlozzi, the Massachusetts director for the National Federation of Independent Business, says seasonal employment has been down since the Bay State approved a minimum wage increase.

Carlozzi said seasonal employment has been down since Massachusetts approved its wage hike in 2018.

"You had employers talking about hundreds of kids applying for summer jobs, and those positions just weren't there," said Carlozzi. "It wasn't cost-effective for the business owner."

Carlozzi also warns the pandemic's ongoing presence will likely play a role too -- though no one is certain how big.

In the coming months, Florida lawmakers will get a chance to weigh in too.

During next year's legislative session, the GOP majority may try to limit the scope of the amendment with an implementation bill. Supporters are concerned legislators will approve exemptions for some businesses based on size.

The session is set to begin on March 2.