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As Minimum Wage Hike Goes Into Effect, A Potential Lesson For Florida's Government

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Pedro Portal/pportal@miamiherald.com
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Miami Herald
Members of 32BJ SEIU urge voters to pass Amendment 2 in Miami's Little Havana neighborhood, September 2020.

It's a story of unintended consequences, or perhaps, the story of political backlash that should be expected when the state passes laws that overly restrict local governments from making their own decisions.

In mid-2016, the former mayor of Miami Beach says he was getting some pretty interesting calls from local businesses.

“A lot of the hotels were coming to us and saying, 'Hey, can you provide workforce housing? Can you help us do this and that, provide more public transportation?' All these various options, which, as you know, are good ideas. But the reality is that they take a lot of time to implement,” said Philip Levine, who served as mayor between 2013 and 2017.

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The immediate issue, as Levine saw it, was not one the government was equipped to solve through new taxpayer-funded programs.

The problem was with the businesses: they paid workers too little.

“I said, ‘Well, I don't understand. Maybe if you actually paid your people a little more, who knows? Maybe they'd actually be able to afford to live here,’” Levine said.

The back and forth planted an idea in the mayor’s head that would lead to battle with big business interests and the state government alike.

The happenings in Miami Beach are a key part in the story of what led to more than 60% of Florida voters passing a ballot amendment in 2020 that will raise the statewide minimum wage to $15 by 2026 — a 73% increase from current levels.

It's a story of unintended consequences, or perhaps, the story of political backlash that should be expected when the state passes laws that overly restrict local governments from making decisions about their own communities.

The statewide minimum wage will first go up to $10 an hour starting on Sept. 30, and will go up one dollar a year for the next five years.

After that point, minimum wage hikes will be pegged to annual inflation.

While many are excited about what the minimum wage hike will mean for low-income workers, some economists are alarmed at what the dramatic hike could mean in the short and long-term when applied to both high-income urban areas and low-income rural areas alike.

Miami Beach Picks Its Battle

For former Mayor Levine, those worries were valid in 2016. While he didn’t see any reason low-income parts of the state should be forced to raise their wages — the situation in Miami Beach was distinct.

“The cost of living in Miami Beach is so extraordinarily high that it will require a higher living wage or a minimum wage in Miami Beach. Where, if you're up in Alachua County or you're in Polk County or you're in some other counties around the state with the cost of living is so much less, maybe that wage should be different than Miami Beach. Maybe it's lower,” he said. “One size doesn't always fit all in the state of Florida. We have a huge state with so many counties.”

To reflect that thinking, in June 2016, Levine introduced an ordinance that raised the minimum wage in the city of Miami Beach, making it the first city in Florida to take that step. The ordinance would raise the minimum wage in the city to $10.31 in January of 2018, and raise it for three consecutive years, until hitting $13.31 in 2021.

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Brynn Anderson
Former Miami Beach Mayor Philip Levine pushed to raise the minimum wage in Miami Beach in 2016. The city became the first in the state to make that move.

The ordinance passed unanimously in the city commission. City leaders knew they were picking a battle with the state when they made the move.

Thirteen years earlier, in 2003, the Florida Legislature passed a law saying no city or county could raise the minimum wage on their own. The reasoning was that, to create the best possible business environment, cities shouldn’t be competing with one another over wages, according to the Legislature’s analysis at the time. Essentially, lawmakers didn’t want a mass of companies setting up shop in one city where they can pay lower wages, and they also didn’t want all the workers rushing to a different city where they can earn higher wages.

The argument was that it would be best to make minimum wage flat across the state.

But at the time Florida did not have its own minimum wage; it relied on the federal minimum wage. The following year, in 2004, more than 70% of Florida voters decided to create a state minimum wage and tie increases to inflation.

That ballot amendment included language that Levine said was a little “vague” as to whether cities could, in fact, raise the minimum wage. That part of the ballot amendment specified that the whole amendment “shall not be construed to preempt or otherwise limit the authority of the state legislature or any other public body to adopt or enforce any other law, regulation, requirement, policy or standard that provides for payment of higher or supplemental wages or benefits.”

“Our legal department gave us a go ahead that we have strong footing, that it's not a guarantee, but we should do it and we could move forward with it,” said Levine. “We took the leap because we felt it was the right thing to do.”

Big Business And The State Of Florida Steps In

A lawsuit was quickly filed against the city by the Florida Restaurant and Lodging Association, the Florida Chamber of Commerce and the Florida Retail Federation. In that lawsuit the groups cited the state law that banned cities from setting their own minimum wage. They argued that letting cities set their own minimum wage would create a confusing business environment across the state.

The state of Florida under former attorney general Pam Bondi, also backed those positions.

A Miami-Dade Circuit Court judge ruled that the Miami Beach minimum wage ordinance violated state law, a position that was unanimously upheld by the Third District Court of Appeals. Then, in early 2019, the Supreme Court refused to take up the case, cementing the ban on cities raising the minimum wage on their own.

By this time, a statewide effort to raise the minimum wage was well underway. The political action committee, Florida For A Fair Wage, was registered with the state in 2017 and was pushing to raise the statewide minimum wage to $15 an hour by 2026.

The PAC was funded by Orlando-based personal injury attorney John Morgan, who also funded a successful statewide effort to bring medical marijuana to Florida in 2016. If successful on signature gathering, and passing a legal smell test at the Florida Supreme Court, the question would be on the 2020 ballot.

Shot down at the local level, Levine changed his tune. If the state would not let local governments make decisions to reflect their own realities, a different approach would be needed. He decided to support the statewide effort to let Florida voters across the state decide on the issue.

“I believe overwhelmingly they’re going to say yes,” he said in a 2019 interview.

Workers Organize Across The State

Members of the workers' union, SEIU 32BJ, had previously looked at the potential of raising minimum wage laws at the local level, but knew it would not be allowed under state law.

“We had always felt like, unfortunately, Miami Beach's effort was not going to overcome the preemption by the state,” said Helene O’Brien, the Florida director of 32BJ.

The union represents janitors across South Florida and other parts of the state and when the statewide ballot amendment effort started to gain steam, the union decided to get involved.

“It's a cliché, but government works best when it's closer to the people and it's more responsive to the people,” said O’Brien. “As long as we weren't able to have local control, it almost inevitably led us to this effort where we were going to have to raise for the whole state.”

Workers across the state fanned out to hold rallies, make phone calls, visit churches and walk neighborhoods to get the word out. In South Florida, 32BJ was one of the most visible groups working to promote the upcoming vote.

“We ended up knocking on 75,000 doors,” said O’Brien. “We were in Hialeah. We were in West Kendall, where there's a mix of voters in West Kendall, and it really is mostly Republican in Hialeah. And yet folks were like, yes, on Amendment 2. So I actually started feeling really good that that this was going to pass.”

“It just really took off like wildfire. It was a no-brainer, regardless of who people were going to vote for at the presidential level,” she said.

Odeimy Melendres, a Cuba-born janitor, is part of the union. Even though she already made more than the minimum wage, she started knocking on doors, talking on radio shows and mobilizing support for the effort.

“When you have a little bit more money, that’s going to be more you can invest in the economy right here in Florida,” Melendres said.

In the long run, raising the minimum wage across the state will help the entire economy, she argued. She waived off concerns that raising the minimum wage would hurt businesses of have ulterior impacts on the economy.

“I think it’s all a matter of your perspective,” she said. “If you think negative you’re going to find a lot of defects, but if you look at it positively, you’re going to see a lot of benefits.”

If the ballot amendment passed, within a few years, Melendres’ own employer would still have to raise her wages as Florida’s minimum wage creeps closer to $15.

On election night in November 2020, Melendres said her phone blew up with calls from friends and colleagues. Her circle was elated about the results, but they have not yet had a proper celebration.

“I think September 30th is going to be the real day to celebrate, because that’s when it becomes reality,” she said.

'Not The Smartest Way To Make Policy'

Some parts of the state might not be celebrating the victory at all, said economist David Macpherson.

Macpherson, an economics professor at Trinity College, was hired by the PAC Save Florida Jobs, which tried to prevent Florida voters from raising the statewide minimum wage. A report he and a colleague issued, paid for by the PAC, outlined a troubling scenario that mirrors research he has previously done in California, after it hiked the statewide minimum wage in 2013.

“We found that, not surprisingly, where it had the biggest negative impact were in the areas outside the bigger cities,” said Macpherson of his California research. “In the rural areas, as well as in the lower wage industries like restaurants.”

Rural areas have a lower cost of living, and so low wages have the ability to go farther, since things like rent are much cheaper than in big cities. But when the rural areas had to raise wages to match city life, Macpherson’s analysis found, it led to more automation and work hours getting rolled back. So even as workers gained pay by the hour, they often lost on the total amount of hours they worked.

With this in mind, Macpherson developed a theory about how the Florida vote split across the state.

“I’m willing to bet that the minimum wage, the percent voting for it, was not even across the state,” he said. “What percentage of the rural counties voted in favor, versus, say Miami?”

According to a WLRN analysis, Macpherson’s hypothesis was onto something. Of the top 20 most populous counties in Florida, every one of them voted to raise the minimum wage. That includes Democratic strongholds like Miami-Dade, Broward, Palm Beach, Orange and Hillsborough -- but also Republican strongholds like Collier, Polk and Lee.

At the same time, of the 20 least populous counties in Florida, every single one of them voted against it. All are Republican counties.

More than a Democrat versus Republican issue, the vote on raising the minimum wage turned out to be more of an urban versus rural issue. And those rural communities are likely to feel steamrolled, said Macpherson.

“That’s gonna make them that much more of a political divide,” he said. “You’re forcing on them something less of them would like.”

The effects of a statewide minimum wage on rural areas will not be felt immediately, he predicted. But over time it will make itself known.

“As they keep hiking it up, that’s gonna lead to more and more effects. Now, people know what the hike is gonna be -- and so people will start making adjustments even before the minimum wage gets to fifteen dollars an hour,” he said. They know, ‘Hey, it’s gonna get to fifteen, so we’re gonna start making adjustments in terms of labor. We’re gonna start using more kiosks. We’re gonna automate more.’”

As a researcher and economist, Macpherson is broadly skeptical of any positive impacts made by raising the minimum wage. But if anyone should be doing it, he argued, it should be as localized as possible.

“Let Miami do what they want to do, fine. Just don’t hurt Jefferson County,” he said.

He rejected the logic of the statewide ban on cities raising the minimum wage that made passing a statewide ballot amendment the only available option to raise wages for major cities, where the cost of living is significantly higher than in rural areas.

“It’s not the smartest way to make policy. But sometimes in Tallahassee, you get some policy that’s less than ideal,” he said.

Former Miami Beach Mayor Philip Levine said there is a lesson here for the state government, if they want to learn it. If the state had just allowed cities to set their own minimum wages -- as many other states do -- the statewide hike might have never happened. Rural areas might not face the same uncertain economic impacts as they are about to face.

Once the statewide minimum wage hits $15 in 2026, it will be significantly higher than the initial minimum wage of $13.31 that the City of Miami Beach passed in 2016. And that hike will take place not just in Miami Beach, but in rural areas that never once voted to raise the minimum wage to begin with.

“Be careful what you wish for,” Levine warned the state government. “Sometimes you push back on this, and you get something that they didn’t expect.”