Employers in Florida began paying minimum wage earners $7.31 per hour Wednesday, 6 cents more than the previous minimum wage.
The increase is the result of a lawsuit brought by the National Employment Law Project and Florida Legal Services, which contested the way the state Agency for Workforce Innovation was calculating the minimum wage.
Floridas state Constitution calls for the minimum wage to be tied to the consumer price index, so when inflation increases, wages are supposed to tick upward as well. Before the recession of 2008 hit, Floridas minimum wage remained above the federal level. But the freefalling economy led to two years of slight deflation in the state, and AWI reduced the state minimum wage to match the federal level of $7.25.
The increase affects about 188,000 workers who earn minimum wage in Florida, according to AWI, but if tipped workers are included, 250,000 workers will get a pay increase. Workers whose wages are augmented by tips will see their base wage rise from $4.23 to $4.29 per hour.
For a full-time worker, the 6-cent hike amounts to an extra $120 per year, but many of those earning minimum wage are part-time or seasonal workers.
The lawsuit alleged that AWIs calculation was in violation of the state Constitution because it does not address deflation.
This will result in over $28 million more earned and spent in the local economy this year by the lowest-paid of Floridas work force. This is an opportunity for Florida to make an overdue commitment on behalf of working Floridians to ensure that the minimum wage is complied with, said Jose Rodriguez, a Florida Legal Services attorney.
Businesses most affected by the change will be large corporations with plenty of minimum- and low-wage workers, such as in the leisure and hospitality sector, which has generated much of Floridas recent job gains.
The leisure and hospitality industries added 39,400 jobs between April 2010 and April 2011, but it remains unclear how big of an impact the 6-cent hike will have on the recent hiring spree.
Other businesses likely to be affected by the increase appear to be giving it a collective shrug, as they contend with a troubling overall business climate and an economy struggling to fully recover from the recent deep recession.
Things are so tough right now, I dont know that 6 cents is going to have much of an impact. It certainly doesnt help, said Allen Douglas, legislative affairs director of the National Federation of Independent Businesses in Florida.
Retailers, too, seem to be unconcerned about the wage hike.
We have sent notifications about the changes to our members, but we have not had specific feedback from our members. I can only imagine that they are impacted by the changes, said Samantha Padgett, deputy general counsel for the Florida Retail Federation.
Factors such as difficulty accessing credit and anemic demand are weighing more heavily on small-business owners minds, Douglas said.
The biggest factor is the lack of demand. It seemed like it was coming back for a while but then fuel prices, gasoline prices are coming back up, he said. Mainly, its just the general business climate is not conducive to hiring more workers right now, he added.
Reach Gray Rohrer at grohrer@sunshinestatenews.com or at (850) 727-0859.
