Many local businesses don’t appear to track statewide support to increase Florida’s minimum wage, according to an informal survey by the Tallahassee Democrat.
Voters statewide will decide whether it’s time for an increase by changing the state’s constitution — and the issue is pitting the working poor against businesses on the financial brink.
In 2004, voters approved setting a minimum wage in the state constitution that would increase yearly to match the inflation rate. It’s now $8.56 an hour; the federal minimum wage is $7.25 per hour.
More:The ultimate Leon County, Tallahassee voter’s guide to the 2020 general election
Also on the ballot:A Florida voter’s guide to the six constitutional amendments on the 2020 ballot
Amendment 2 would boost minimum wage to $10 in 2021 and increase it by a dollar a year until it hits $15 in 2026. After that, increases would be “adjusted annually for inflation” as of Sept. 30, 2027.
The amendment needs no less than 60% approval to pass.
Florida For a Fair Wage, chaired by Orlando trial attorney John Morgan, is pushing the ballot initiative. The group argues an increase is necessary to earn a “living wage” that covers basic household expenses.
“In the last four, five, six, seven years, I think all of us can agree there’s been a tension in this country that is spilling out onto the streets,” Morgan said during a September discussion on the Florida Pulse, a new livestream series by opinion editors at the USA TODAY Network – Florida. “What is happening in America is the rich are getting richer and the poor are getting poorer.”
More:FLORIDA PULSE: Should Florida raise the minimum wage to $15 an hour?
Opponents include Save Florida Jobs, Inc., along with the Florida Restaurant and Lodging Association. They contend the minimum wage increase would upend Florida’s economy fueled by the hospitality industry.
But a recent statewide poll by the Saint Leo University Polling Institute Research shows “substantial support.” The institute said “the data show that 48% say they strongly support the idea and another 22.8% say they somewhat support the idea, generating 70.8 percent who say they support it to one degree or another.”
The Democrat contacted dozens of local business owners and asked them to share their stance on Amendment 2.
Many business owners, representing various industries, were hesitant and declined to go on the record. With members split on the merits of the proposal, none of Tallahassee’s three Chambers of Commerce are taking an official stance on the issue, although the Democrat did receive responses from some of their members.
Out of all the respondents, all but three said they are opposing Amendment 2. Here’s what local businesses had to say:
Restaurants weigh in
Restaurant owner Keith Baxter supports a wage increase so hourly employees can have what he calls a better standard of living. Yet, he said, the impact to his business would be significant.
“Many of my employees currently earn $15 or more but any increased rate would raise payroll expenses,” he said. “Those increased expenses would have to be passed on to my customers by raising prices. This would be the only way to offset the increased expense.”
Tasty Pastry Bakery
Mark Cross, the bakery’s president, said the wage is unrealistic for first-time workers and would put a strain on the overall operation and production. He said layoffs would be a likely consequence for the longtime retail bakery, which also provides catering and wholesale deliveries.
“I support free market economics in which wages are driven by supply and demand for workers as well as their experience and qualifications,” Cross said. “When employees gain experience and skills, their wages and benefit to the business increase.”
Increasing minimum wage to $15 per hour will cause more harm to an already fragile economy, said Mandy Lemons, the restaurant’s co-owner.
“It will cause the price of goods and services to go up, therefore acting as a ‘tax’ to all consumers, especially those not benefiting from an increase in pay or on fixed incomes.”
Gaines Street Pies
As his budding restaurant empire blooms, Jeremy Matlow said raising the state minimum wage would lift millions of Floridians out of poverty.
Matlow, a Tallahassee city commissioner who’s a partner in Gaines Street Pies, The Iron Daisy and the Wilbury, said the wage increase is the “most effective way to address our greatest challenges while putting money into the hands of local consumers that will spend it and jumpstart our economy.”
“I welcome this change that will improve the lives of workers industry wide,” he said. “Our business has adapted to changes over the years and this will be one more adaptation we make toward a more prosperous city.”
Drew McLeod, owner and operator of the upscale downtown restaurant, said the wage increase will crush Florida’s hospitality industry.
It, along with spiraling impacts of COVID-19, will spark higher consumer pricing, lost jobs primarily from businesses closing or automation, and reduced incomes for service industry team members.
“There is no doubt that Amendment 2 will increase labor costs for my business significantly ($350,000 in the first 5 years of implementation and at least $100k/year thereafter),” he said. “And, with razor-thin margins as a rule, it would put my family-owned restaurant with 25 employees into a situation where we will be forced to close.”
Island Wing Company, Tropical Smoothie and soon-to-open Rock n Roll Sushi
Sam Osborne, a longtime restaurant owner and franchisee, said to look at failures in New York and California, which have some of the highest minimum wages.
“The increased wages forced businesses to close or cut jobs, and it hurt those actually earning the minimum wage. I don’t want Florida to end up like that,” Osborne said.
Like others, he said labor cost increases will spill over to consumers: “We are still working hard just to try to bring (back) the team members we lost because of COVID,” he said. “A wage increase would be the end of us.”
Blu Halo and Hangar 38
Keith Paniucki, an owner at both venues, said a “yes” vote would put the final nail in the coffin of those restaurants still struggling with the adverse effects of the pandemic.
“The timing of the vote … could not come at a worse moment,” he said. “The very people the new law was intended to help may actually be hurt if their position is eliminated due to cost savings measures.”
The trickle down effect, he said, may likely result in price increases for burgers going from $11 or $12 to $15 or $17 because “the baker, farmer, cattle rancher, and the distribution of all of those products will cost more to produce and deliver.”
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Brownsville Preparatory Institute
Rita Brown, the private school’s founder and owner, said she opposes a wage increase as it relates to workers under 18 and the cost associated with training unskilled labor to complete minimal tasks.
“In a childcare center where ratios of staff to child are required by law, it would prevent being able to keep ratios, due to what we can charge parents,” Brown said.
“The funds would not be there to cover payroll at $15 per hour. If you pay $15 for unskilled labor what would you have to pay for skilled labor? We would have to price ourselves out of the market to pay salaries.”
G Willies Uniforms and Sprinkles ice cream parlor
Scott Flowers, an owner in the family business, said it’s unfair for those who have spent years working up to $15 per hour, such as state workers, who likely won’t see their wages increase at the same rate as new hires.
“State workers rarely see wage increases,” he said. “Most make about twice the minimum wage now, but it is highly unlikely their wages will double in the same time-frame the minimum wage does.”
While the wage increase won’t have an immediate impact on his uniform business, Flowers said it would create a turnover problem later.
For the ice cream store, high schoolers and college students would most likely not be hired any more when “we can get more experienced and career-minded adults for the same wages.”
DT&S Maintenance and Repair LLC
Daphne Nelson believes a wage increase could help build a stronger work crew for her small business.
“I believe individuals will work harder and be on time when they feel they’re getting their worth,” she said. “I completely can relate because there were times in the field where I felt I deserved more and didn’t get it.”
Gantt Financial Group
Ben Graybar, director of business development for the financial firm, said small businesses can’t afford to give as many people opportunities to learn if the wage increase moves.
“There are certainly companies where the CEO earns a huge multiple of what an employee earns,” Graybar said. “That said, workers can change jobs once they prove their worth. There is a financial risk and reward for starting a company versus just showing up for work.”
Capital City Pedicabs
Owner Mike Goldstein said increasing the state’s minimum wage to $15 an hour will hurt small businesses and the economy in general.
“To have it on the ballot during a pandemic doesn’t help matters either,” he said. “A minimum wage increase could hurt my business. With the expectation of a guaranteed increase in hourly wage the motivation to get the work done may not resonate.”
Amy Center, co-owner and trainer at the farm, said she doesn’t believe government should have the deciding power on wages for a particular job.
“Nor should a government create mandates for private businesses that can and will either succeed or fail on their own merit and decisions based on how the workers and customers receive them,” Center said.
Price are sure to soar, she added. Employees will be asked to do more on the job.
“My business partner and I already take up any slack and provide services, without pay, to keep our industry as open as possible, the animals in our charge cared for and our staff paid,” Center said.
360 Hospitality Group
Samir Patel, the company’s president and CEO, said a minimum wage is meant to be an introductory wage that opens doors for growth. Mandating a higher minimum wage will hinder those career opportunities and part-time work and will eliminate jobs.
Patel said the added expense would represent a 43% increase in one week’s p
ayroll for him.
“I can’t afford that,” he said. “The math simply doesn’t work. We would be forced to make a one-time investment in technology at the expense of our employees to survive.”
AMWAT Moving Warehousing Storage
Gloria Pugh, president and CEO of the moving company, said her stance isn’t a simple yes or no. While she believes a wage increase is warranted, she points to dangers of a domino effect.
“Employees currently making $15 would have to get a 37% increase, approximately $20, to compensate them for their skills and experience as opposed to an employee with limited skills making $11,” she said. “Your employee who was making $20 will also have to get a raise.”
The drumbeat of concerns surrounding increased labor cost is what bothers Sam Varn, president of the longtime personalization business.
“With economic uncertainty in the coming months and/or years, the timing on this proposal is particularly bad,” he said. “At best the impact on us would be a necessary increase in prices to our customers. At worst it could prevent us from hiring additional staff members or limit our ability to provide more for those we employee.”
Pony Express Tack & Riding Shop
Sharon Wiseman, the shop’s owner, said she can’t afford to pay part-time or occasional employees at the increased wage while balancing fixed expenses. Turning a profit would be near impossible.
“I would work all the hours myself, and my business would have to be open less,” she said. “I ultimately would lose again, being unable to work enough hours by myself.”
American Valet Services
Before the pandemic, co-owner Connor Hilgenfeldt said the business had more than 40 employees and more than a dozen were college students. Business has picked up but he fears a $15 minimum wage increase would “crush us.”
“What the advocates of this amendment fail to realize is that the largest beneficiaries of it are large corporations,” he said. “A local valet company like us will go out of business and be replaced by a national parking company. Likewise, our favorite local pizza joint will become a Papa John’s. Our local espresso shop will become a Starbucks. And, and our local steakhouse will become a Morton’s.”
Palm Coast Construction
Owner Jim Blaisdell said consumers will pay more for products and services if Amendment 2 passes.
“You will pay more for your oil changes, yard maintenance, and a cup of coffee. Those who rent will pay more because of the additional costs the landlord will pay for maintenance,” he said. “Many businesses will cut back employees’ hours so they aren’t required to pay benefits. The $15 per hour sounds good to many, but the excitement will be short-lived.”
CORRECTION: An earlier version of this story incorrectly characterized the number of local businesses opposed and in favor of Amendment 2.
Contact TaMaryn Waters at [email protected] or follow @TaMarynWaters on Twitter.