Agenda driven amendments use emotional talking points to cloak economic facts. Let’s break down the facts of Amendment 2. First, minimum wages will increase $1.44/hr starting in 2021. Every year after, it will increase a dollar more until it reaches $15/hr in 2026. In 2027 it will increase at the same rate as the Consumer Price Index-W. Since 2004, Florida has been 1 of 8 states that increases the minimum wage annually based on the CPI.
Minimum wage is the lowest hourly amount an employee may be paid for their labor. As Maricel Rivera of MSN states, “Between salaried and hourly employees, the latter have more control over their schedules. As such, if their schedule allows, they can work on other jobs or projects. Most hourly employees are non-exempt, meaning under the Fair Labor Standards Act (FLSA), employers are required to pay them a minimum wage plus overtime… which is 1.5 times their hourly rate for every hour in excess of the standard 40 hours per week. Meaning, if they work a lot of overtime, they can earn more than the salaried employees who are not entitled to overtime pay.” We will get back to the FSLA but first I’d like to hone in on a real-life example I am familiar with.
Say, a small cafe brings in $900 at the end of the night, the cook earns $120 ($15/hr) of those dollars for working eight hours, the busboy and the dishwasher earn $42.80 ($8.56/hr) each for working a five-hour shift and three servers earn $27.70 ($5.54/hr) each not including tips, for working a five-hour shift. The food costs are $300 and the costs to operate (rent, license, insurance, etc.) are $120 a day. The owner who also manages the cafe has $191.30 profit.
The cook deservedly earned $6.44/hr more than the busboy and dishwasher. In six short years, they will earn the same. In the past six years the salary of a cook has increased $2/hr, on average in Florida. That’s with the economy booming for the past four years. By unjustifiably increasing the minimum one can earn you are taking away any and all incentive that employee would have to earn more. Being a cook is hard work but anyone can learn to do it and the best way to learn is onsite. Three out of the eight dishwashers I hired went on to become cooks in my restaurant.
With amendment 2 the owner’s expenses would increase 3.5% in 2021 alone due to the four employees mandated wage increases. As an owner I would not be able to justify paying the busboy a higher wage than my business plan allocated. It would make more sense to give the waitress a raise and the responsibility of busing the tables or even just doing it myself. It is worth noting that the supporters of Amendment 2 say your food will only increase $1.45 in 2021. What about the next year when minimum wage increases $1 more? Will the food not increase $1 more, expenses will increase 6% more just due to the mandated wage increase of two employees. What about the loss of profits? All profits don’t go into the safe of the business owner, they are usually recycled back in to the economy one way or another. This is how trickle down economics works.
The restaurant profit margin is typically 3%. Menu prices are based on expenses & profit margins. Raised menu prices will effect all Floridians in a negative way. The hospitality industry will be hit hard by this dictated wage increase. Tourism is one of the top six industries that drives Florida’s GDP.
Government does not earn money; it collects it from you and me in various ways. One way is through the state sales tax. Hence the word sale, a business has to earn money to give money to the Government. The more successful a business, the more sales tax collected. The more businesses opened the more sales tax collected. The more sales tax collected the more money the state has. Any and every penny the Government spends came from someone else. Amendment 2 is simply the Government once again spending someone else’s money.
As of today, a full-time employee earning minimum wage is above the poverty level. As we learned earlier FLSA rewards workers 1.5 their hourly rate for working overtime. Eager hardworking Floridians would lose this opportunity because it would simply be unaffordable. On the other hand, less production would occur due to lack of help. It is a lose – lose situation. America does not provide equal outcome like a socialist country promises, however it does provide equal opportunity like no other country does. A minimum wage job is important and makes a significant difference in our economy. Amendment 2 will make the owner choose between eliminating these job positions or eventually going out of business! What good is it to be promised a wage an employer can not afford to pay?