Florida's new minimum wage rises from $8.56 to $10 an hour (a 16% increase) on September 30, 2021. However, there is a provision in that law allowing employers to take a "credit" on the wages of tipped employees and assume that some of their wages are paid in tips. The amendment sets that amount as what the FLSA allowed in 2003. In 2003, the allowable employer tip credit was $3.02 an hour.
What this means is that instead of rising 16%, the minimum wage for tipped workers will increase from $5.44 to 6.98 an hour. Every restaurant in the state just saw their tipped labor costs rise by 28%. Look for price increases to cover that, plus you STILL get to tip.
Even worse for dining establishments: on September 30, 2022, the tipped minimum wage will rise another 14% to $7.98 an hour.
Most workers do not make minimum wage. The reason for this is that the value that the worker's labor adds more to the transaction than that. If a worker is only making minimum wage, this is an indication that their job can literally be done by anyone, so the value of their labor is worth no more than whatever that minimum wage is.
So workers whose labor is of low value figured out that it is easier to vote to have the government force people at police gunpoint to pay them more than it is to increase their skill set so that their labor is worth more. In other words, they are voting to remove voluntary cooperation from the market- they are warping market forces.
So now I am going to have to pay the person who carries the food to my table a 28% raise as a part of my menu cost increase, plus a 15 percent tip? I don't think so. So beginning September 30, I am going to cut my tip amount to 5 to 10 percent. Perhaps 2022 will see me no longer tipping at all.
So workers whose labor is of low value figured out that it is easier to vote to have the government force people at police gunpoint to pay them more than it is to increase their skill set so that their labor is worth more.
ReplyDeleteIt's worse than that. They've disincentivized improving skills. Right now there are thousands of people who went and got some training to make more than the current min wage of $8.56. Maybe $11 or $12/hour. In the coming few years, they're going to get swept up in a move to being the new min wage. Some of them surely think that if they're making a couple of bucks more than that now, they'll just be the same couple of bucks above the new min wage. I've never seen that happen in my life. Now imagine how those people are going to think of the time and effort spent getting training - maybe going to school at night. Why bother?
As a result, the percentage of people making between today's min wage and the $15/hr min wage is going to go down and the incentive that had been there to go to six months or a year of training for all sorts of moderately skilled jobs goes away.
Didn't you once say that as a paramedic your pay was less than the eventual $15/hr? And that's a highly-skilled job compared to pet groomers and nail salon technicians that are also in that gap between current minimum and $15/hr.
This is going to f**k up Florida so bad I can't imagine.