Bloomberg Businessweek - USA (2020-11-23)

◼ ECONOMICS Bloomberg Businessweek November 23, 2020

29

THEBOTTOMLINE Votersin Floridaapproveda measuretoraise

thestate’sminimumwageto$15by2026,lendingmomentumtoa

nationalcampaigntoraisethefederalwagefloor.

StateMinimumWages

None $7.25orunder $8.00-$9.99 $10.00-$11.99 $12.00or more

MINIMUMWAGESASOFOCT.1, 2020.DATA: U.S. DEPARTMENT OF LABOR

state-to-state battle for a $15-an-hour minimum.
Supporters and critics of minimum wage laws
cite dueling studies to show how the measures
boost people out of poverty—or lead businesses to
cut jobs or employee hours.
Bolstering the argument for a wage floor, three
researchers at the Federal Reserve Bank of New
York studied retail and hospitality employment in
counties along the New York-Pennsylvania border
after New York hiked its minimum wage in 2013.
Because Pennsylvania hadn’t raised its minimum,
the experiment offered a chance to see whether
the New York counties would lose jobs.
In fact, as New York’s minimum wage climbed to
above $10 an hour, leisure and hospitality employ-
ment rose in those counties when compared with
ones in Pennsylvania. Meantime, employee earn-
ings rose significantly more on the New York
side, the researchers found. At retail businesses,
employment dropped on both sides of the border
at roughly the same rate, reflecting an industry
decline, but New York workers still saw stronger
earnings growth.
A 2019 analysis by the nonpartisan
Congressional Budget Office found that increasing
the minimum wage to $15 by 2025 would boost the
income of 17 million Americans, but would also
cause 1.3 million to lose their jobs. Losses would
fall disproportionately on part-time workers and
adults without a high school diploma, according
to the study.
Organizations that represent industries with a
high proportion of hourly workers warn against
increasing costs for companies during a pandemic
that has millions of small businesses clinging to
life. “With many businesses struggling to keep
their doors open, now is not the time to place
additional burdens on employers and stifle the
job creation our economy desperately needs to
recover from the pandemic,” says David French,
the National Retail Federation’s senior vice presi-
dent of government relations.
Several large corporations have increased
hourly wages on their own accord in recent
months. In July, Target Corp. raised its start-
ing wage to $15 an hour. And in September,
Walmart Inc. hiked wages for 165,000 hourly
associates nationwide.
Labor groups pushing for a higher minimum
wage are drawing inspiration from the Florida
vote. It “absolutely does create more momentum
and pressure,” says Allynn Umel, national orga-
nizing director for the union-funded Fight for $15
campaign. “The fact that 6.4 million Floridians
voted to increase the minimum wage last week,

innorthernFloridamightrelocatetosouthern

GeorgiaorintoAlabamaandstillbeabletoship

theirproductsintoFlorida,arguedJerryParrish,

chiefeconomistforFloridaChamberFoundation.

Ordinarily,anincreaseto$15anhourover

severalyearswouldgivebusinessesenoughtime

tocompensateforthehigherlaborcosts,says

DilipKanji,a businessmanfromTampawhoowns

a mixofhotels,restaurants,andrent-to-ownretail

franchises. But he hastens to add that these aren’t

ordinary times.

“We’re now in a pandemic, with unemployment

very high,” Kanji says. “We now have a Democratic

government coming in, and we don’t know how

that’s going to be.” �Olivia Rockeman, Claire

Miller, and Michael Sasso, with Cataria Saraiva

including millions from both parties—it shows the

power of worker voices.”

The last increase to the federal minimum wage

passed in 2007, when a Republican was in the White

House but Democrats commanded both houses of

Congress. President Barack Obama called for an

increase in his 2013 State of the Union address,

but was unsuccessful in getting any adjustments

through a Republican-controlled Congress.

Major business groups in Florida, including the

Florida Chamber of Commerce, fought against the

wage amendment, warning that in a worst-case

scenario it could wipe out as many as 500,000

jobs. If, for example, states neighboring Florida

keep the lower federal minimum wage, businesses