Florida's Efforts on Minimum Wage Increases

Hurrican Jeb Bears Down on Working Poor
American Progress Action
Sept. 24th, 2004

With Floridians still recovering from the economic destruction caused by hurricanes Charlie, Frances and Ivan, Jeb Bush and his corporate allies are determined to make matters even worse for low-income Floridians. Jeb and his big business supporters are working to defeat a November ballot initiative that would raise the minimum wage in Florida by one dollar, to $6.15 an hour for most employees.

If the measure passes, the Florida minimum wage would have a yearly cost-of-living adjustment equal to the inflation rate to ensure that the value of the minimum wage does not erode over time. The front group created by corporations to fight the initiative claims that the modest increase in the minimum wage "would cost businesses billions, lead employers to cut benefits and slow job growth in Florida." The proof? They polled themselves as to what they thought the impact would be.

Real economic analysis, released yesterday by the Center for American Progress and the Political Economy Research Institute, demonstrates that the minimum wage increase would significantly benefit low-income Floridians and have a negligible impact on the state's business community. For more information on the effort to pass the initiative, check out Floridians for All.

BENEFITS TO WORKERS SUBSTANTIAL: For non-tipped hourly workers making minimum wage, the increase would mean an average raise of 7.3 percent. Other workers making up to $7.49 an hour would also receive substantial raises (from 2 to 6 percent), due to employers voluntarily raising wages to maintain a fair, graduated pay scale. This translates into increases in disposable income for low-income Floridians between $500 to $600 per year – allowing them to reduce debt, reduce work hours or purchase a car. The minimum wage increase would benefit 700,000 workers in Florida.

IMPACT ON BUSINESS MINIMAL: The American Progress study concluded that the total cost of the measure to private businesses in Florida would be $406 million. That amount represents just 0.4 percent of the total sales of these businesses, which was $928.7 billion in 2003. A clothing store, for example, could fully cover its increase costs by raising the price of a sweatshirt from $20.00 to $20.01. The tiny increase in costs will also be off-set, at least in part, by productivity gains. Wage increases have shown to lower absenteeism and raise morale. There is no objective evidence that the doomsday scenarios presented by the corporate front groups opposing the initiative – unemployment, relocation and inflation – would occur. John Podesta, CEO of American Progress, notes that after the federal minimum wage was raised in 1996, "over the next four years, 13 million jobs were created." Businesses in low-income neighborhoods will experience substantial increases in sales as the disposable income of residents increases.

MINIMUM WAGE ABYSMALLY LOW: Someone who makes the federal minimum wage of $5.15 – which is also the prevailing rate in Florida – and worked full time for 52 weeks a year would earn just $10,712. That amount is 28 percent below the federal poverty line. Thirty percent of workers who make up to twice the level of the poverty line faced hardships such as missing meals, being evicted from their housing or having their utilities disconnected. In 1968, the minimum wage (adjusted for inflation) was $8.49 – 40 percent higher than it is now. Raising the minimum wage can have a particularly positive impact on minority communities.

OPPOSITION OUT OF TOUCH: Rich McAllister, CEO of the Florida Retail Federation, an organization leading the charge to defeat the initiative, said on a conference call with reporters that "there would never be a good time to raise the minimum wage." McAllister added that "the minimum wage is an artificial number that means nothing." Embarrassed by McAllister's candor, another spokesman for the Florida Retail Federation later claimed that the comments made by the CEO of the organization to the reporter were "Rick's personal opinion" and did not represent the group's position. Small business owners, meanwhile, are more supportive of the initiative. Miami restauranteur Mark Soyka, asked about his thoughts on the initiative, said "my reaction is, from a humane perspective, I don't even know how they make it on $6.15 an hour."