One of the major policy initiatives of soon-to-be-Speaker Nancy Pelosi is raising the minimum wage from $5.15 to $7.25 per hour. This would set the federal wage law temporarily higher than Florida’s current minimum wage, $6.67 per hour for 2006.
In 2004, Florida’s voters overwhelmingly approved an amendment to the state constitution establishing the minimum wage at $6.15 per hour. The amendment requires the state to adjust the wage to reflect the rate of inflation of urban wages. For 2005 the rate increased to $6.40 per hour, then to $6.67 per hour; that is an average of 4.1% increase each year. If the rate holds the same, the Florida wage will pass the proposed federal wage in 2009.
Note: Florida’s constitution does not require the state wage to be increased when the federal wage is. Employers will pay either the state or federal wage, whichever is higher.
Stateline reports that the federal increase is probably a forgone conclusion:
Traditionally, Democrats have backed minimum wage increases as a way to help poor families climb out of poverty, while Republicans have opposed them because they say government-mandated pay hikes hurt the local economy and jeopardize jobs. But recent national polls show that a majority of Americans, across both political parties, favor raising workers’ pay.
As a result, federal and state politicians are eager to show their support for raising the minimum. In the past two years, more states raised their minimum wage rates than in the 68-year history of the federal minimum wage law.
Last summer, Congress considered a federal wage increase from its current level of $5.15 to $7.25, but the bill foundered because Republicans in the House tied the wage hike to an estate tax reduction that killed the bill’s chances in the upper chamber. Political analysts predict President Bush, who has opposed wage hikes in the past, will come to an agreement with Congress on a wage increase next year, provided small businesses are protected.
Whatever happens, we don’t see much of an impact on Florida’s business climate or economy.