homepage logo

Minimum wage boost concerns restaurant owners

By Staff | Aug 28, 2019

Restaurant owners on Fort Myers Beach are concerned with a proposal would raise Florida’s minimum wage to $15 by 2027.

The proposed ballot initiative reads: “Raises minimum wage to $10.00 per hour effective September 30th, 2021. Each September 30th thereafter, minimum wage shall increase by $1.00 per hour until the minimum wage reaches $15.00 per hour on September 30th, 2026. From that point forward, future minimum wage increases shall revert to being adjusted annually for inflation starting September 30th, 2027.”

In an informational meeting, dozens of business owners on the beach are hosted by the Chamber of Commerce and the Florida Restaurant and Lodging Association for potential issues with this passing.

Over time, this represents a 77% increase in minimum wage.

There are pros and cons to this that a lot of public scrutiny hasn’t considered, those attending a Florida Restaurant and Lodging Association seminar held at Nervous Nellies in association with the Fort Myers Beach Chamber of Commerce on the possible outcomes of hiking the minimum wage to $15 in Florida learned.

“The biggest issue is the tip credit. Under federal law and in most states, employers may pay tipped employees less than the minimum wage, as long as employees earn enough in tips to make up the difference. This is called a ‘tip credit’,” Samantha Padgett, Government Relations Representative for the Florida Restaurant and Lodging Association, said.

Florida’s current tip credit is frozen at $3.02 per hour. Florida minimum wage is at $8.46 per hour. Basically, this means, employers can claim basic tips as part of what it takes to hit minimum wage, so a tipped employee would make $5.44 plus the tip credit to meet Florida’s minimum.

“With seasonal tourism, tips can easily double or triple that total rate during some parts of the year, so some tipped employees aren’t as keen to see a regular minimum wage hike, nor are employers since it can cause shifting in hours and job density,” Padgett said.

Some owners aren’t opposed to a wage hike, but $15 as the number has a lot of mixed messages.

Some believe it’s far too high, others feel like it’s barely enough although many agree being able to rent a home on the beach, where you may work, is almost out of the question.

“No one is telling anyone that they don’t deserve more money, everybody needs to right to live. But this can eliminate a lot of bare bones, entry-level positions in the service industry, should it come to fruition,” Padgett said.

She is not alone in that view. National experts agree that higher wages make employers consider their bottom lines with a more scrutinizing eye.

The ups and downs of this proposal are as varied as they are important. Wages haven’t caught up to inflation. GDP over the last decade is posting record numbers, while wages have remained very stagnant in most fields with a study done by Pew Research finding that most wages haven’t moved, with purchasing power remaining the same in 2018 as it was in 1978.

A recent study by the Congressional Budget Office, taken in June of 2019, entitled “The Effects on Employment and Family Income of Increasing the Federal Minimum Wage,” was conducted to determine how increasing the federal minimum wage from $7.25 to $10, $12 or $15 per hour by 2025 would affect employment and family income.

The conclusion was that increasing the federal minimum wage would have two major impacts on low-wage workers: earnings would increase for many, which would lift some families out of poverty. However, other low-wage workers would become jobless, their family income would drop and it could place them below the poverty threshold.