Florida TaxWatch: Minimum wage initiative ‘detrimental’ to small business, low-skill workers

A Florida TaxWatch report published Tuesday warns that Florida’s $15 minimum wage initiative could have “detrimental effects” on taxpayers, small business and low-skill workers.

The nonpartisan watchdog group is encouraging voters to reject the initiative, known formally as Amendment 2. The amendment seeks to raise Florida’s minimum wage to $10 an hour in 2021 and then raise it $1 a year until it reaches $15 in 2026.

“While the road to a $15 state minimum wage may be paved with good intentions and even produce wins for some workers, its negative impacts could produce poor outcomes for too many of the very folks it aims to protect,” said Florida TaxWatch President and CEO Dominic M. Calabro. “Small businesses will be forced to increase labor expenditures, fixed-income Floridians will be faced with paying higher prices for goods and services, and low-skill workers are likely to receive fewer hours and employment opportunities.”

Florida is one of 28 states that has established a minimum hourly wage that differs from the federal minimum hourly wage. The state’s current minimum hourly wage is $8.56, $1.26 more than the federal minimum wage. Florida’s minimum wage increases each year to match inflation.

Proponents of the amendment argue a higher wage would lift many workers out of poverty, increase consumerism and reduce dependency on social programs. Opponents, on the other hand, warn of the unintended consequences, which include inflation, layoffs and reduced hours for low-skill earners.

According to estimates from the Financial Impact Estimating Conference, Amendment 2 would increase the annual wage costs of government agencies alone from $16 million in 2022 to $540 million in 2027.

What’s more, opponents stress that a wage hike would further devastate small businesses amid the COVID-19 pandemic.

“2020 will be remembered as a year that we saw many small businesses disappear,” said National Federation of Independent Business Florida Executive Director Bill Herrle. “Let’s not heap more upon their back.”

Florida TaxWatch also warned that a constitutional amendment, unlike legislation, would handcuff the Legislature moving forward.

“The state’s constitution should be left as a foundational document, the baseplate upon which our state builds its laws and rules, its rights and responsibilities,” the report argued. “Changing an item in the constitution means less flexibility for the Legislature, both in good times and bad, and it is incredibly hard to remove.

The political committee behind the proposed constitutional amendment is Florida for a Fair Wage, which is chaired by prominent Orlando lawyer John Morgan.

In August, Florida Restaurant and Lodging CEO Carol Dover conceded that she and critics are facing an uphill battle against the initiative.

The proposed constitutional amendment will require a 60% supermajority vote to pass.

Florida Tax Watch’s full report can be found online.