Wage Wars

Rethinking raising the minimum wage.

If Amendment 2 passes the vote in November, the state’s minimum wage will jump to $15 an hour over the next six years. With the effects of the pandemic weighing heavily on local businesses (and employees), what will this mean for Southwest Florida’s economic and employment future?

Andrew Blitch

Over the past few months, Andrew Blitch, owner of Naples’ “A” Locksmith, has seen several businesses close down. Commercial building owners are approaching the company to re-key locks, as their small business tenants shut their doors due to COVID-19. “Businesses that haven’t shut down are barely scraping by, and I’m afraid that if you make their payroll expenses go up dramatically, you’re going to see a lot more shutting down,” says Blitch, who also serves as a director at the Greater Naples Chamber Leadership Collier Foundation.

Amendment 2, the $15 Minimum Wage Initiative, would increase the current state minimum wage of $8.56 to $15 by 2026, raising the rate to $10 per hour on Sept. 30, 2021, and gradually increasing by an additional $1 each year after. If approved, businesses would face a 77% increase in labor cost. Blitch already pays his employees $15 or more an hour, and many of the highly trained technicians have been with the company an average of 15 years or worked in the field for 20. Amendment 2 wouldn’t have a direct effect on his company initially, but those same employees getting paid $15 would then be considered minimum wage workers, despite being fairly skilled. In time, he would have to give them more substantial wages, and then increase his prices. “I don’t see how increasing the minimum wage by nearly double in as little as six years can happen in a healthy way without shutting down more businesses,” he says. “I would hate to make the problem worse than it already is.”

Carol Dover

In June, three months after many hotels and restaurants closed their doors due to COVID, nearly 1 million hospitality employees in Florida were out of a job or furloughed. “We are on life support right now; our members aren’t making money. If you increase the payroll, many say it will be the last nail in the coffin,” says Carol Dover, president and CEO of the Florida Restaurant and Lodging Association (FRLA), a nonprofit hospitality trade association whose goal is to protect and educate the state’s $111.7 billion hospitality industry. “Servers are going to tell you they’d rather work for current minimum wage making tips, putting them over $15 an hour, than be turned into an iPad or have their hours cut.”

A few days before our call, Dover said she spoke with a hotelier who has been closed since March and owes $3 million in property tax. She’s constantly “talking people out of suicidal situations,” she says. “It’s so frustrating that the other side says people need to make more money, but isn’t it better to have a job and make money than be on unemployment?”

A number of recent studies have shown that minimum wage laws can negatively impact unskilled workers by pricing them out of the labor market, making it even more difficult for these workers to obtain the skills they need to secure jobs in the future. As Linda Gorman, director of the Health Care Policy Center at the Independence Institute, wrote in an article for The Library of Economics and Liberty: “Most noneconomists believe that minimum wage laws protect workers from exploitation by employers and reduce poverty. Most economists believe that minimum wage laws cause unnecessary hardship for the very people they are supposed to help.”

Christopher Westley

“In a sense, these laws mandate unemployment for this segment of the labor force while encouraging businesses to adopt labor-saving technology at a faster rate,” explains Christopher Westley, dean and professor at Florida Gulf Coast University’s Lutgert College of Business. “Given the significant stresses faced today by tourism and hospitality in Southwest Florida, I’m concerned that making labor more expensive will just prolong the recovery process in our region, and have the opposite effect on workers that pro-minimum wage advocates claim to want.”

John Morgan

John Morgan, a lawyer and partner at Orlando-based law firm Morgan & Morgan, is the chairperson behind the Florida for a Fair Wage initiative, and believes that much of the unrest taking place in the country stems from income inequality. “To have people working full time and going from their job to the food bank is obscene,” he says. “What our politicians need to think about is that what happened in Cuba can happen here; what happened to Marie Antoinette can happen here. I hope people see this is in their best interest, to do what’s in the best interest of the disappearing middle class and lower middle class.”

He believes that heavy turnover ends when you pay people a fair wage, and when you don’t have turnover, that’s better for your business. And when it comes to COVID, “we now understand who the essential workers are, and we fully understand that they are the ones not making minimum wage, by and large,” he adds. “I would hope that what we’ve seen, the people out there exposed to disease, that we would at least say we were going to give them a minimum wage that’s also a livable wage.”

Companies such as Best Buy, Target and Amazon have started raising their base wages to $15 to encourage employees to start working again, instead of relying on unemployment benefits. But Dover argues that before COVID, when Maine or Seattle tried to enact $13 an hour, it was a nightmare. “People lost their jobs, companies left and moved to other states. If Amendment 2 passes, the places going back to work won’t even be open,” she says. “Let’s defeat the amendment and give this industry a lifeline and get people back to work.”

 

LOW-DOWN ON AMENDMENTS 5 & 6

If Amendment 5 passes, it would extend the period people can transfer “Save Our Home” benefits from two to three years when moving to a new home. When it comes to property taxes in Florida, primary residences are assessed at “just value,” which means that every primary residence has the right to receive a $25,000 homestead exemption. Homes with a value between $50,000 and $75,000 can receive an additional $25,000 exemption to reduce the property’s taxable value. The amendment— passed in 1992— restricted the property valuation for homes receiving this exemption to 3% annually. What does this mean for local homeowners?

The Florida Revenue Estimating Conference predicts this could reduce property taxes in 2021-22 by $1.8 million, a figure that could grow to $10.2 million annually.

At the moment, when disabled veterans pass away, their homestead property tax discount dies along with them. If Amendment 6, the Homestead Property Tax Discount for Spouses of Deceased Veterans Amendment, is passed, the discount would be passed on to the spouse until they remarry, sell or get rid of the property. When Rep. Sam H. Killebrew, R-Winter Haven, was introducing this bill on the House floor, another representative came to him and said that his uncle, a wounded combat veteran, passed away two years ago. The following year, his aunt received their homestead property tax bill and it was almost $600 more than before, and she didn’t have the money because she’s on a fixed income. “Here was a real-life example of how Amendment 6 would help some folks in Florida,” Killebrew says. “By transferring the homestead property tax discount to the surviving spouse of a combat veteran, it would remove that additional financial burden on the surviving spouse.”