On Sept. 30, Florida's minimum wage went up to $15 due to a constitutional amendment voters approved in 2020.
In 2019, the minimum wage in Florida was less than $9. Now with the $15 rate, it will rise in the future to keep up with inflation rates.
Many supporters said the former wage wasn't a livable one and that workers getting more money to spend would create economic growth. The phase-in for the full $15 was reached, giving businesses time to adjust.
Concerns about business employers not being prepared to adjust to the increase to $15 an hour are arising.
Samantha Padgett, from the Florida Restaurant and Lodging Association, said businesses are already dealing with higher prices across the board.
"You absolutely want your team to be well-paid and to receive a fair wage, but you also have to look at the balance: what does that do to the ability of the business to continue to operate and to thrive," Padgett questioned.
READ MORE: $15 minimum wage is here, but it’s not a ‘livable’ wage, group says
As this increased minimum wage is in the middle of the growing affordability crisis, many wonder how much it is actually helping workers in Florida. And how is it putting a strain on businesses?
How the increase is affecting workers and businesses in Florida
Florida's minimum wage has gone up more than 75% in six years. Due to the changes happening daily in the economy, $15 an hour will mean more to an individual living in Levy County compared to Tampa.
On "The Florida Roundup," Dr. Michael Snipes, associate professor of instruction of economics at USF's Sarasota-Manatee campus, shared the two primary effects of increasing the minimum wage that he thinks will affect the state.
The first primary effect is that when labor costs go up, it causes an increase in cost to firms, creating an inflationary effect.
"What are businesses going to do with that increase in cost?" Snipes said. "And most of the time they're going to try and shift most of that increase in cost onto consumers in the form of higher prices."
The second primary effect is a positive impact the increase has on workers by giving them greater purchasing power.
"Now $15 is going to have different purchasing power in different parts of the state, and I think that it's important to really kind of reframe the conversation about that idea of purchasing power," Snipes said. "So it's not how much income you have that matters; it's the purchasing power that that money represents that really matters."
How tariffs are affecting inflation and not the increase
Snipes shared that inflation is not traceable to the increase in minimum wage we've seen over the last six years, since the law gave businesses warning that the wage increase was going to happen. They had about six years to make plans to minimize any effects that might happen to their business.
Over the past two years, the inflation that Snipes has been seeing is coming from different administration choices in Washington and Tallahassee, like tariffs that increase the cost of doing business.
Tariffs are a tax that is placed on goods and services imported to the United States from other countries. For example, recently, there are tariffs on certain countries that are 50%, which increases the cost of these imported materials by 50% of their usual cost.
"The uncertainty surrounding the tariffs — when they're going to be there, when they're not going to be there, how big they are, that's really been a big driver for inflation, especially over the past two years, " Snipes added.
Minimum wage vs living wage
Snipes shared the importance of thinking about these minimum wage laws as having that living wage as opposed to just having a policy in place that provides a minimum wage.
"The whole idea behind the minimum wage in the first place was to give people the minimum income that they would need in order to have a quality of life," said Snipes.
It can be seen as a ripple effect: a higher minimum wage is the initial splash, and then it will ripple into the economy due to individuals spending more money, which will increase business income, and businesses can use the profit to pay their workers.
"If we focus on growth in the economy, we're looking at a living wage. What is the minimum wage that you need in order to lead some kind of life?" said Snipes. "When we look at what that minimum wage should be, not just with inflation, but with growth in the economy, we're talking closer to about $25 as a minimum wage, as opposed to $15."
This story was compiled from interviews conducted by Carlton Gillespie for "The Florida Roundup."
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