Myths and facts about raising the minimum wage in Florida

Oct 7, 2020 by AFP

On Election Day, Floridians will vote on Amendment 2, a measure to incrementally raise the minimum wage from $8.56 to $15 per hour by 2026.

But raising the minimum wage comes with a plethora of negative consequences that harm the very people it is intended to help.

Before Floridians make their way to the polls to vote on Amendment 2, it’s important to separate fact from fiction and understand the reality of imposing a government-mandated wage hike.

Myth: A higher minimum wage would prevent people from having to work multiple jobs. A living wage would also help people put food on the table and provide for their families.

Fact: Government-mandated wage hikes incentivize companies to make employees work more part-time hours and take second jobs to cover for lost hours. Some workers will even end up making less than they did before the hike.

As one longtime bartender and former single mother in Florida wrote in Florida Today: “When I was a single mom, this job afforded me the flexibility to raise my kids, but also pay my bills. Amendment 2 would change all of that.”

She continued:

“If operating costs are forced to rise, owners and managers will have to make the difficult decisions to cut jobs, reduce hours and raise prices. Some will be forced to close altogether. We just can’t afford that … $15 an hour is a pay cut for me, and so many others like me across the state who get tips on top of our wages.”

Fact: As Reason points out, raising the minimum wage has already hurt low-wage workers: “In Seattle, workers’ hours at low-wage jobs went down while the minimum wage went up, leading to a decrease in overall earnings.”

Myth: Raising the federal minimum wage is an effective way to increase the incomes of poor families and minority communities.

Fact: Research indicates that raising minimum wages has negligible impacts on reducing poverty. Only 1/5th of those earning at or below the federal minimum wage today are coming from families in poverty, with 2/3 living in families earning 150 percent or more above the poverty line.

Fact: Minimum wage increases are associated with higher unemployment rates among disadvantaged groups. Less-educated teens and adults are affected more, not only through overall employment losses, but also by higher minimum wages attracting workers with more experience and more education, such as college students.

Fact: The minimum wage affects different ethnicities similarly, with approximately 3 percent of African Americans and 2 percent of Caucasians, Asians, and Hispanics earning it.

Myth: A minimum wage increase is necessary because people are stuck in low-paying minimum wage jobs.

Fact: Nearly half of minimum wage earners are under 25 years of age, and most get raises above the minimum wage within one year.

Fact: Minimum wage recipients are concentrated in highly transient industries. Sixty percent of workers earning the minimum wage or below are in the leisure and hospitality industry, including restaurant employees who supplement wages with tips.

Fact: A 2017 Bureau of Labor Statistics report indicated that only 2.3 percent of hourly paid workers earned the minimum wage, or 1.8 million workers overall. That was less than 1.3 percent of the total workforce when adding in salaried workers.

Myth: Amendment 2 would fix the problem of tipped workers being paid below the minimum wage.

Fact: While only a $2.13 hourly cash wage is mandated by current federal law for tipped employees, workers receive additional hourly pay up to the $7.25 federal minimum wage whenever their combined cash wages and tip earnings fall below the minimum wage. However, most tipped workers earn well above the federal minimum wage.

Myth: Consumers and our broader economy would benefit from a rise in the federal minimum wage.

Fact: Businesses must raise prices or cut costs by reducing payroll in other ways, hurting low-income families the most as both consumers and job seekers.

Fact: Studies show that prices for consumers rise, especially in food industries, when the minimum wage is increased. Those costs fall disproportionately on low-income families.

Remove barriers to opportunity

Americans for Prosperity strives to create an economy that works for all — empowering people to earn success and realize their potential.

Government barriers to freedom of contract undermine the dignity of personal choice as well as the ability of people to reach their true potential. There is dignity in work, and policies such as minimum wages deny people income as well as the opportunity to gain the skills and experience needed to climb the economic ladder to successful, fulfilling careers.

Sign our petition and pledge to protect Florida workers and small businesses by voting no on Amendment 2.