Amendment 2 from a Restaurant Owners Point of View
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?
Amendment 2 from a Cafe Customer’s Point of View.
A busboy and dishwasher earn only $42.80 for a 5-hour day?
Obviously they need a second minimum wage job, and if so they would earn a total of $85.60 for a 10 hour day. If they work 6 days a week, 10 hours a day, (60 hours a week with no time off), that would be approximately $2,054 a month. The average rent for a two bedroom one bath apartment is $1,200 a month. That leaves just $800 a month for taxes, insurance, food, kids, utilities, cable, cell phone, car payments/expenses, gas and clothing. How is that above poverty level?
For a cafe bringing in $900 a night, a 3.5% increase to cover increased wages is only $31.50. Say for example, to bring in $900 a night, that could be 45 customers paying $20 each for their meal and beverages. Divide the additional wages (3.5%), or $31.50 a night additional cost by 45 customers — to cover the added wages, that’s only an extra 30 cents you need to charge per meal.
Consider reevaluating your business plan to include paying your employees something they can live on and not having to work 6 days a week, 10 hours a day to live below the poverty level. As a cafe customer, I have no issue paying more per meal so others don’t have to work 2 and 3 jobs to live just in poverty.
“As a cafe customer, I have no issue paying more per meal so others don’t have to work 2 and 3 jobs to live just in poverty.”
You can do that today through tips.
Maybe it’s just me, but if someone’s actually trying to support a household as a busboy (as opposed to a teenager earning some spending money and building up a resume), my question isn’t “why are busboys paid so little?” but rather “what’s holding this person back from getting a higher paying job?” Paying a bunch of teenagers more money in the hope that some of it spills over to people genuinely struggling doesn’t seem like a very effective solution.
Bussers and dishwashers typically don’t get tips, (unless the wait staff agrees to give them a percentage of the tipping pool), so tipping a little extra doesn’t help them much at all. Second, very few people would be aware of the low pay, low hours issue of busboys – and wouldn’t know to tip extra. Typically what holds people back from getting a higher paying job is lack of education. Not everyone is born smart, or comes from a supportive family that helps them to get good grades in school so they can get higher paying jobs. Notice next time you go to a grocery store, some of the people who bag your groceries are either elderly and trying to make ends meet, have had a tough life, or are mentally challenged – and they are all doing the best they can to survive. Because someone needs to do those jobs, we can either let that “class-of-workers” continue to live in poverty or we all pitch in just a tiny bit extra when we buy stuff or go to cafes.
NOTE: The Cafe owner above stated he pays $8.56 hourly for a dishwasher, yet the average hourly rate for dishwashers in Florida is $10.50 an hour. Somehow other businesses have worked into their business plans paying their “minimum wage earners” $2.00 more an hour and are doing just fine.