Minimum wage increases continue to climb and it is creating a positive impact on the overall health of the economy. Here’s a snapshot of what’s happening today.
SNAPSHOT OF THE HISTORY OF FLORIDA’S MINIMUM WAGE
On January 1, 2021, Florida increased its minimum wage by 9 cents, making it $8.65 per hour. Due to Amendment 2, passed by the constitutional referendum in 2020, Florida’s minimum wage increased again as of September 30, 2021, to $10 per hour.
Fast forward to September 30, 2022, and the minimum wage will increase to $11 per hour and go up a dollar each year until it hits $15 in 2026. After 2026, the minimum wage will increase depending on annual inflation adjustments.
PROS OF MINIMUM WAGE INCREASING
As a business owner, we know that the first thing that pops into your head when it comes to minimum wage increases are all of the negative effects, but there are also a number of positive impacts. Here are a few of the pros when it comes to increasing minimum wage
- Boosts the economy – There’s more money circulating in the economy, so more people are spending, which stimulates the overall economy at the end of the day.
- More jobs – Because you have more people buying goods and services, there is a greater need for workers, therefore increasing the number of jobs.
- Helps employees and their families – The extra money helps parents provide for the needs of their children and make ends meet.
CONS OF MINIMUM WAGE INCREASING
Along with the pros, there are also a few cons to minimum wage continuing to increase. Here are the cons:
- Higher cost to products and services – One way that business owners make up for the increase in the minimum wage is through increasing the price of their products and services.
- Stalled job market – People are afraid to higher because they are uncertain about how the wage adjustment will impact them.
- Increase in employee outsourcing – Instead of hiring new employees, people will outsource for specific tasks and projects, so they don’t need to spend the extra money.
HOW DO YOU PREPARE FOR THE MINIMUM WAGE INCREASES?
- WHAT ARE YOU LOOKING AT?
- Prepare a budget for the increase
- Analyze existing wages
- Create a list and a plan
- Think about the ripple effect within your organization and amongst your competition
- AUDIT YOUR EXPENSES
- Audit ALL of your expenses
- Look for places where you can trade dollars
- Streamline the process
- Add helpful technology
- Outsource admin and compliance functions (HR, IT, payroll, etc.)
- Reduce turnover – you can view our turnover calculator here.
- DIG IN A LITTLE BIT
- Update job descriptions
- Notify employees
- Status change forms
- Update wage increase scale
- Eliminate and manage overtime
- OTHER THINGS TO CHECK OFF OR CONSIDER
- New wage and hour poster – keep your eyes out for new posters and information
- Update any active job postings
- Update your work compensation information
- Take a look at your insurance amounts
If you need help with preparing for the minimum wage increase, we would love to help you stay ahead of your competition! Reach out to our team here.