Jacksonville, FL - For more than 400,000 Floridians, the New Year is bringing a new boost on their paycheck- but it may be a catch-22.
“In the end, there’s not really a net gain,” says Candace Moody with WorkSource Northeast Florida.
The minimum wage is going up 14 cents/hour in Florida in 2014, which reflects an automatic raise that happens annually according to cost of living and other economic indications. The new minimum wage will be $7.93.
Moody says the people who are getting this boost may not have a great need for the money.
“There are very few ‘family supporters’ and ‘primary wage earners’ who are earning minimum wage,” she says.
That’s because a lot of these workers are young, teens starting to venture in to the world of employment or looking for extra spending money. Moody says this extra pocket money has a big effect moving up the chain, however.
“Labor cost is the highest cost in any business,” she says.
Businesses react a few ways to the increase depending on how many workers are affected, but Moody says it’s rarely a good response. One line of thinking is to cut back on the number of hours given to minimum wage workers or cut positions entirely.
“All of those jobs are being replaced by technology because of this slow and steady increase in the minimum wage,” Moody says.
Those who want to keep labor supply consistent will instead pass the cost of the wage hike to consumers, which includes you as well as the very workers getting the pay boost.
“Prices go up for the very services that minimum wage workers consume: fast food, dry cleaners, movie tickets,” Moody says.
Proponents of the hike are confident the increase in spending money that’s disposable will actually help stimulate the economy and possibly create jobs. The National Employment Law Project estimates a $62.7 million economic impact in Florida alone as a result of consumer spending.