This post first appeared in the Tallahassee Democrat.
The consequences for local governments from implementing Florida’s constitutionally mandated $15 minimum wage are now being felt at the local levels. But if the budgetary direction and logic unfolding in Tallahassee is any indication, Florida taxpayers are on a rough road.
The constitutional amendment requires local governments to pump up compensation to the lowest paid workers by 75% over five years, beginning in September 2021. But some elected officials are impatient. They want to implement the full increase now.
In Tallahassee, the city commission directed its city manager to redo its budget, set aside the phase-in, and immediately establish a $15 entry-level wage rate. Accelerating the mandate, however, ignores critical factors essential for effective workforce management, whether in the public or private sectors.
First, any increase in a starting wage rate has ripple effects throughout an organization’s entire compensation system. Pay raises should be tied to performance and job responsibilities. Thus, an entry level worker at $10 per hour would be managed by a more experienced worker at $15 per hour.
Leveling their wage rates — so the supervisor and the entry level worker are compensated the same — introduces an striking inequity divorced from responsibilities or performance. As a matter of fairness, employees with more responsibilities should be paid more than the people they supervise.
A responsible restructuring of compensation systems must take into account these workplace inequities. It’s a complicated process, in some cases requiring renegotiating collective bargaining contracts and recalibrating wage scales all the way up and down (and across) the organization.
Second, the acceleration of the wage rate reschedule represents a willful disregard for taxpayers and accountability in government. According to the Massachusetts Institute for Technology, the so-called “living wage” in Tallahassee is $13.89 per hour for a single adult without children. MIT’s Living Wage for a two earner household without children is just $11.14.
Tallahassee is not alone. The $15 minimum wage exceeds MIT’s living wage estimates in Jacksonville, Pensacola, Panama City, Lakeland, Ocala, The Villages, Sarasota-Bradenton and Fort Myers-Cape Coral, among others.
Thus, the $15 minimum wage immediately gives entry-level workers with little experience a premium wage rate in a job with generous health, retirement and other benefits.
Third, accelerating the $15 minimum wage without sufficient time to recalibrate and restructure job definitions and responsibilities creates a wage rate entitlement. It narrows pathways to professional development by compressing wages at critical entry levels, when new and inexperienced employees are learning and developing critical skills.
Local governments, like most private businesses in today’s economy, first and foremost provide services to their customers. In the end, accelerating the minimum wage without improvement in productivity and services quality will mean Tallahasseeans get a more expensive government for less.
The prudent path forward for Florida cities is to buy time to implement the higher minimum wage in a fiscally responsible way that ensures accountability and respects taxpayers.