Florida and the Minimum Wage

Updated 5/3/18

Minimum Wage as It Relates to Florida

Raising the state minimum wage is an issue bubbling to the surface again. It’s time we had a frank discussion about it. Bottom line is, it needs to come up. The federal minimum wage is still at a paltry $7.25/hr. That’s just not a living wage. I don’t care where you live $7.25/hr or $290/wk for a 40-hour work week or $15,080/yr if you work all 52 weeks of the year, is not going to provide for your basic necessities. That is coming from the wealthiest nation on the planet. The states in this country spotted this many years ago and since then, 30 states plus the District of Columbia have enacted higher state minimum wages than the federal. Florida was one of them. 19 states just raised their state minimum wages in 2017.

In 2004, voters in Florida overwhelmingly approved Amendment 5. This was an initiated constitutional amendment that needed at least 60% of the vote. The Yes On 5 campaign organized by, get this, Floridians for All PAC (what’s the name of this website?) garnered 571,741 signatures and drew 71.25% or 5,198,514 votes to 2,097,151 against it on election day; a more than 2-to-1 advantage. You’d be shocked to learn who lined up in favor of and opposition to this amendment. The teachers union (NEA), MoveOn.org, ACORN, AFL-CIO among others donated in support of the amendment. Nearly twice as much money was raised in opposition of the amendment by entities like Publix, Outback Steakhouse, the National Restaurant Association, Burger King, Walt Disney, CVS and Walgreens among others. These companies kicked in six-figure donations to try and beat the amendment. Florida voters won.  Despite a 2-to-1 spending advantage, the amendment passed with a 2-to-1 vote advantage. When the people of Florida believe in something, they vote on it. Just look at the Land and Water Conservation Amendment from 2014. That time, nearly 75% of voters voiced their approval of buying up conservation lands and protecting our water supply. Just last election (2016), more than 70% of voters in Florida approved Amendment 2 The Florida Medical Marijuana Legalization Initiative. The 2004 Florida Minimum Wage Amendment had that same charge, that same validation by Florida voters. The amendment has a very interesting clause to it.

(a) Public Policy. All working Floridians are entitled to be paid a minimum wage that is sufficient to provide a decent and healthy life for them and their families, that protects their employers from unfair low-wage competition, and that does not force them to rely on taxpayer-funded public services in order to avoid economic hardship.

This basically says that even minimum wage workers should be paid enough to stay off government benefits. Sounds good, right? It gets companies to pay their employees enough so that the state doesn’t have to subsidize the employees with public benefits.

The Florida minimum wage just ticked up from $8.10/hr. to $8.25/hr.. That’s a weekly raise of six dollars, an annual raise of $312. I know, catch your breath. Why such a small increase?

Well, the Florida Minimum Wage Amendment states in Section C:

“On September 30th of that year and on each following September 30th, the state Agency for Workforce Innovation shall calculate an adjusted Minimum Wage rate by increasing the current Minimum Wage rate by the rate of inflation during the twelve months prior to each September 1st using the consumer price index for urban wage earners and clerical workers, CPI-W, or a successor index as calculated by the United States Department of Labor. Each adjusted Minimum Wage rate calculated shall be published and take effect on the following January 1st.”

The aim here is to keep the minimum wage from dipping below 138% of the Federal Poverty Level (FPL), the point at which you are eligible for public benefits.

Let’s take a sample of an individual living alone.

The federal poverty level for 2016 for an individual is $11,880/yr..

138% of this is $16,394.40/yr.

If you work full-time at $8.10/hr. (40 hours per week) and work ALL 52 weeks of the year, you take home $16,848.

Now, you’re above 138% of the poverty level but by just $453.60. If we’re looking at the previous minimum wage of $8.05/hr. you’re just $349.60 over the threshold.

It should be noted that our state minimum wage went up to $8.25/hr. in 2018.

Now let’s figure out reality.

Reality is that you likely won’t work 40 hours per week. Employers are crafty at scheduling their employees for just under 40 hours a week so that they do not have to treat them as full-time and give them full-time benefits like health insurance or retirement plans. The Bureau of Labor Statistics puts the average hours a private employee in Florida puts in a week at 34. Let’s work that.

At $8.10/hr. over a 34-hour work week, you’re now at $275.4/wk.. That’s $14,320.80 for a year (52 weeks).

You’re already under 138% of the FPL and eligible for public benefits.

Now, let’s consider that you can’t possibly work all 52 weeks out of the year. Let’s be conservative and say that with illness, family leave and or holiday you only get one of those weeks off.

So with 51 weeks of work, you’re down to $14,045.40 per year, well under the public benefit threshold.

This is why we need a new amendment. The Florida Minimum Wage Amendment was great in 2004. It’s 12 years later and the current state minimum wage is not meeting the original intention the amendment. We want companies to pay their employees enough that they don’t have to turn to public benefits. The state ends up subsidizing some of these corporations with public benefits to their employees.

This is why I say we need to raise our state minimum wage to $10/hr. immediately.

Why $10?

I’m aware of the Fight for $15 but I’m not sure that’s a universal approach. Sure, places like New York and California and the Pacific Northwest are expensive places to live and the minimum wage needs to be higher than it is in states like, Alabama or Georgia, even Florida. Furthermore, the minimum wage hike shouldn’t overly burden businesses, especially smaller ones. If we raise the minimum wage too high, too quickly, many businesses will elect to automate, cutting jobs. Small businesses might simply not be able to afford it. Also, wage earners in more skilled positions that make say, $15 or $16/hr. will become disgruntled that a Burger King cashier is making nearly as much as a first responder or health care assistant. Let’s face it. $10/hr. is already an accepted minimum. Go on Craigslist and find a job that pays less than 10 bucks an hour. They barely exist.

$10/hr. for a 34-hour work week puts you at $340/wk., that’s $17,340 for 51 weeks out of the year. At 10 bucks an hour, you’re now somewhat comfortably above the 138% of FPL ($16,394.40) and ineligible for public benefits.

How do we accomplish this?

Two ways. Try saying them five times fast.

First, a legislatively referred constitutional amendment

Second, an initiated constitutional amendment

The current framework for our minimum wage laws is enshrined in our state constitution. It will take some effort to change it but the mechanisms are there.

If we go with the legislatively referred constitutional amendment, then it’s up to our state legislature to vote on a ballot measure to place on a November ballot. This seems like the simpler way to go. We need a legislator to draft it and work to get it approved. It would require 60% of members in each house to approve it. Each of us has a House and Senate representative. Call them up or email them and let them know you’d like a legislatively referred constitutional amendment to be put on the 2018 ballot that raises the state minimum wage to $10/hr..

Here’s where to find your state House rep: http://www.myfloridahouse.gov/

Here’s where to find your state Senate rep: http://www.flsenate.gov/

Or we could go another way.

The initiated constitutional amendment requires a much bigger drive on the part of the citizens of the state. It requires sponsors to register as a political committee for campaign finance purposes just like Floridians for All PAC from 2004. The group must then submit the text of their proposed amendment and a proof copy of their petition form to the secretary of state. If approved, sponsors then have to acquire signatures. If we’re shooting for 2018, that means we’ll need 753,603. Proposed measures are only reviewed after proponents collect 10 percent of the required signatures across the state and 10 percent in each of one-eighth of the state’s Congressional districts. Then there’s a Financial Impact Estimating Conference. The Conference, after allowing for public input, must draft a concise statement of the effect of the proposed measure on revenue and expenditures. The Conference must also draft a more detailed financial statement of the measure’s predicted effects and the methods used in the analysis.

It’s a long road, one that the legislature could make much easier for us. If it doesn’t come up in the 2018 session. You can bet that, if elected, I will be pushing for such an amendment.

Keeping money in the local economy by way of paying hourly employees more keeps more of the money spent in the local economy. To quote David Rushkoff’s ‘Life Inc.’:

“Unlike money paid to workers, the sums siphoned off by the wealthiest brackets are not used to buy things. These funds do not return to the real economy; they are invested wherever return is the highest… For most investors, this means either placing it overseas, or in the derivatives and futures that make corn, oil and money more expensive for everyone.”

When that money is paid to workers, they spend it in the local economy; a new set of tires, maybe a family dinner at a restaurant.

It was clear in 2004, as much as it is today, that Floridians support a hike in the minimum wage. I think that $10/hr. is the right recipe for Florida.

What can we do now?

Well, there is a current citizen initiated constitutional amendment to raise the state minimum wage to $10/hr. and then to $15/hr. by 2026. Orlando attorney John Morgan is spearheading this initiative and it looks likely that it will make the 2020 ballot.

I typically shy away from raising the minimum wage to $15/hr. across the board. While 2026 is a long way off and perhaps $15/hr. would be reasonable eight years from now, I would make two stipulations.

First, I would pin the minimum wage hike to adults 18&over. If a small business has to pay a high school kid $15/hr., it’s just not going to happen. We will price high school students out of the market and take away a small business’ ability to hire them.

Second, I would create a sliding scale based on the size of the business. Several states already have this concept tied to their minimum wage. A business is measured by the number of its employees and by it’s gross income and tiers are created. This could give smaller businesses a break while making up and running businesses a little bit more accountable. We have to be careful not to make too large a discrepancy as it will just drive prospective employees toward the larger businesses that pay a higher wage.

Third, this is an issue that should really come back to Home Rule. Counties commissions and city councils are better positioned to make those decisions. If you live in the City of Tampa, your expenses are going to be higher than if you live in rural Hernando County.

 

Sources:

https://ballotpedia.org/Florida_Minimum_Wage,_Amendment_5_(2004)

https://ycharts.com/indicators/florida_average_weekly_hours_of_all_employees_total_private_unadjusted

https://ballotpedia.org/Laws_governing_the_initiative_process_in_Florida

https://ballotpedia.org/Initiated_constitutional_amendment

‘Life Inc.’ by David Rushkoff