Florida residents are ringing in 2019 with a higher minimum wage, and they're not alone. With the Federal minimum wage rate remaining stagnant at $7.25 per hour for the past ten years, 20 states and 21 cities have taken it upon themselves to enforce their own new minimum wage regulations.
While in many places $15 per hour is seen as the bare minimum needed to support a basic standard of living, Florida's wage rates have not ever reached such heights. Instead, the minimum wage in Florida has been raised by $0.21 per hour, bringing it from $8.25 to $8.46 per hour. Tipped employees are also receiving an increase, from $5.23 to $5.44 per hour.
Challenges to Employers
Although this minimum wage increase is the most significant in Florida since 2012, the overall impact on workers is expected to be minimal. Full-time employees working 40 hours a week will see a paycheck increase of $437 per year. The impact on employers, however, could be far more significant.
If your business runs on a fixed compensation budget and you haven't already prepared for the change, you could find yourself faced with cutting back hours or considering layoffs. Other options for offsetting this increase include:
Investing in automated processes
Outsourcing some work to other countries
Filling fewer entry-level positions
Lowering wages for highly-compensated employees
Each of these solutions clearly comes with downsides, but the situation is not all doom and gloom. The change also brings positive impacts which will offset some of these drawbacks.
Positive Impacts of the New Minimum Wage
As employees in the lowest-paid positions in the state see an increase in their paycheck, it's likely that this money will go back into the economy in the form of higher spending. Higher incomes also often result in greater employee morale and better productivity.
Business owners should also be aware that today's consumers tend to "shop their values," spending their money with companies that support the same causes they do. Companies who not only support the new minimum wage but also make efforts to go above and beyond are likely to see returns in the form of attracting new customers. This is particularly true for businesses that target Millennials and other younger demographics.
Preparing for the Future
While many believe that the new minimum wage in Florida is a step in the right direction, realistically speaking, it's still not a "living wage." With groups like 'Fight for 15' pushing for a $15 per hour minimum wage across the nation, and companies like Amazon making the commitment to raise their minimum wages to $15 per hour, it's likely just a matter of time before Florida employers are faced with additional mandatory increases.
No matter how you feel about minimum wage increases, it's not something that's going away any time soon. Both the positive and negative effects are bound to have an eventual impact on your business. Preparing yourself both mentally and financially now will put you in a better position to remain competitive in the long-term.