The TaxWatch Research Blog

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The $15 an Hour Debate Should Be About a $15 an Hour Workforce, Not Wage

The success story of Florida continues to grow. The state now boasts a 4.7 percent unemployment rate, more than 253,900 jobs created since May 2015 and one of the most robust economies in the country. No state in the country beat out Florida for jobs created in May 2016. This is a far cry from the economic straits the state was in during the Great Recession.

Despite our successes, many businesses are still struggling and more than 457,000 Floridians are out of work. However, Florida politicians and labor groups are advocating for a $15 an hour minimum wage. They argue that raising the minimum wage to $15 an hour could lift thousands of Floridians out of poverty.

But as the most recent Florida TaxWatch research shows, a drastic increase to a $15 an hour minimum wage could produce unfortunate results. It is far more important for Florida's policymakers to make targeted investments in education and workforce development to build a $15 an hour workforce, rather than through burdensome government mandates.

Wage advocates do not recognize the significant impact that $15 an hour will have on businesses and their employees. It will cause businesses, especially smaller ones in rural areas, to significantly cut back costs or adjust prices. Many consumers will see higher prices for goods and services, which will increase monetary costs for the poorest among us and negatively affect their lives.

Another major issue many economists have with raising the minimum wage to $15 an hour is that it will significantly hinder the job market. Many people will have their hours reduced or they will be laid off altogether, especially if they are employed by smaller businesses. Those who stay employed will benefit from a higher wage but those laid off will find themselves hard pressed to find another job. With higher wages, businesses will either institute a hiring freeze or only hire those with significant experience, leaving low-skilled workers locked out of the job market.

It is clear that if the government puts passion before prudence regarding the minimum wage, the Sunshine State could see some serious negative effects. Overbearing regulations like this will drown out small businesses, bringing their employees with them. Instead of imposing a government-mandated $15 an hour wage, we should be training a $15 an hour workforce.

Education and skill development will go a lot further towards developing a stronger workforce and economy than an arbitrarily set wage. There are growing opportunities and significant demand for skilled trade workers in Florida, like electricians or plumbers, involving different skillsets than an office job but start at or around the same salary. A 2016 report by Direct Energy found that the average skilled trade job started at $48,110.

While a traditional college education is a great opportunity for many, vocational training is also a great way to build an excellent future. We need to begin to encourage those planning for their post-high school to pursue all educational opportunities - college is not the only option. While not discounting the power of a college degree, expanding vocational opportunities for workers will provide even more opportunities for success and drive Florida closer to having a $15 an hour workforce.

Dominic M. Calabro is the President and CEO of Florida TaxWatch

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