Find out more about Florida’s minimum wage updates and 5 steps small businesses in the Sunshine State can take to prepare.
The constitutional amendment to gradually raise Florida’s official minimum wage from $8.56 per hour to $15 per hour by September 2026 has won the vote.
Joining the ranks of 7 other states that have voted to raise the minimum wage, Election Day saw Florida voters come to the polls and narrowly approve a ballot measure that would bring more that a million households out of poverty and increase wages for 1 in 4 workers in the state within the next few years.
The first minimum wage hike to be approved in almost 15 years (from $5.15 an hour to $6.15 an hour) is also the largest minimum wage rate of any ballot prior to 2020 and moves the state a big step closer towards closing the living wage gap for hourly wage earners everywhere.
But not everyone is happy with the changes promised by Amendment 2, least of all many small business owners that had already been hit hard in the wake of COVID-19 and the mandatory shutdowns they fear will push their businesses over the edge.
Read on to learn more about Amendment 2, the debate about its effects on workers and businesses, and actionable tips on how to incorporate the changes in your strategic planning.
Amendment 2: explained
Amendment 2, also known as Florida Amendment 2, $15 Minimum Wage Initiative (2020), is a 2020 ballot measure that will raise the Florida minimum wage from $8.56 to $15 (and up to $11.98 for tipped employees). According to Ballotpedia, the hourly increases will happen each year on the following schedule:
- $10.00 on September 30, 2021
- $11.00 on September 30, 2022
- $12.00 on September 30, 2023
- $13.00 on September 30, 2024
- $14.00 on September 30, 2025
- $15.00 on September 30, 2026
And further annual adjustments after 2027 are dependent on increases to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
It’s important to note that the Florida Legislature has never officially raised the minimum wage in the past. In effect, all previous raises in the minimum wage have happened through ballot measures introduced in response to the state’s long-standing failure to match salaries with the rising costs of living.
It’s important to note that the Florida Legislature has never officially raised the minimum wage in the past.
Expected impacts of Amendment 2
Effects on workers
A recent report conducted by the Florida Policy Institute lists the significant improvements this amendment will bring to the quality of life of many Floridians, such as increasing living wages for 2.5 million people, bringing workers of all ages and backgrounds (including immigrants) closer to a living wage, and benefiting service workers who have long beared the brunt of the lowest wages — such as hotel and restaurant employees.
The FPI also asserts that the wage boost will bring lasting change in the fight towards racial and gender equality since women of color are a demographic group that experience low-wage work in higher numbers.
Effects on businesses
Many business advocates both within and outside the state have major concern over Amendment 2. “Given the devastating impacts Covid-19 has already had on Florida’s economy, we are extremely worried about the job losses and business closures that will accompany this mandate,” Carol Dover, president and CEO of the Florida Restaurant and Lodging Association said in a statement for Inc.
Others in the opposition claim that the reality of the job market is that many employers simply won’t have enough capital to hire sufficient workers to run their operations at the new wage levels — leading to massive business closures, chronic understaffing, and increases in prices for staple good and services that will have to be passed on to the consumer.
However, an overwhelming majority of economists disagree with these predictions and firmly support minimum wage growth. David Cooper, a senior economic analyst at the Economic Policy Institute (a nonpartisan think tank in Washington, D.C.) claimed, “It will sting and businesses will have to adjust, but … [those adjustments] are really not as onerous as businesses claim they will be.”
The FPI report even projects that the minimum raise hikes will yield Florida an additional $577 million of sales tax revenue, which is great for both workers and businesses overall.
Higher minimum wages also allow workers to focus on a single job (rather than multiple), decrease employee turnover, increase productivity, and bring more money into local economies. The FPI report even projects that the minimum raise hikes will yield Florida an additional $577 million of sales tax revenue, which is great for both workers and businesses overall.
How small businesses should prepare
There are many ways in which small businesses can adapt to be compliant without losing their competitive edge. We suggest:
1. Creating a 6-year budget and staffing accordingly
The minimum wage levels are public and posted in advance, giving SMBs ample time to plan it into their mid-term operational budgets.
2. Streamlining operations
Are there inefficiencies in your company that you can fix with the use of technology or new workflows? Find new ways to make your operations run on less cash.
3. Optimizing business hours
Cut out “dead hours” and modify your business times to match customer needs and wants.
4. Increasing prices and preparing customers in advance
Communicated changes make consumers much less likely to react negatively to them, so find other ways to add value to your products (such as with packaging or in-store services) to reflect the store’s higher prices.
5. Cutting down of staff hours and improving training
Without overloading your employees, find ways to elevate your best workers and reward them by giving them more on-the-floor time, boosting loyalty and improving customer service.