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Letter to the editor

Hourly rate will grow by 12 cents

By CHRISTINA REXRODE, Times Staff Writer
Published December 29, 2007

On Tuesday, the first of the year, Florida's minimum wage rises to $6.79 per hour from $6.67.

This sounds familiar. Tell me why our minimum wage is rising?
Florida's minimum wage has increased each January since 2006. That's because, in a law that took effect in 2005, voters amended the state Constitution and raised the Florida wage from $5.15, the federal minimum wage, to $6.15. Voters also agreed that the state minimum wage would rise each year based on the consumer price index.

Anything notable about 2008's wage increase?
Yes. The consumer price index is easing, which means on Tuesday the minimum wage will rise only 1.8 percent. In 2006 and again in 2007, the wage increased more than 4 percent.

Wait. Didn't Congress raise the minimum wage this year?
Yes; it raised the federal minimum wage. At this time last year, the federal minimum wage was $5.15 and had not been raised in a decade. Congress and the president agreed to raise it incrementally: On July 24, it rose to $5.85. On July 24, 2008, it will rise to $6.55, and a year after that it will rise to $7.25.

But that's the federal wage. Does that affect Florida?
Florida employers must pay whichever wage is higher - state or federal. So the 2007 federal wage increase did not affect Florida, and neither will the 2008 federal wage increase. But it's unlikely that Florida wages will rise to $7.25 by 2009, given the slowdown in the consumer price index. So on July 24, 2009, Florida's minimum wage will probably have to be raised to meet federal standards. After that, the Florida wage will remain higher than the federal wage, since it is indexed but the federal wage is not.

What are the potential benefits of increasing the minimum wage?
Proponents say it will bring more people into the work force, encourage workers to be more productive and give them more money to spend in the local economy. It could also curb government spending on food stamps and Medicaid.

What about the potential drawbacks?
Opponents argue the wage increases are a burden on small businesses, who have to hire fewer people to compensate for higher wages. The Employment Policies Institute asserts that Florida's rise in unemployment (from 3.3 percent in November 2006 to 4.3 percent in November 2007) is related to the increase in the minimum wage.

Do other states have their own policies on minimum wages?
Yes. About 30 states have minimum wages that are higher than the federal level, though some in that category - including Arkansas, Maryland, Minnesota, New Hampshire, North Carolina and Wisconsin - will lose that distinction when the federal wage increases in July. Including Florida, there are 10 states that raise their minimum wage each year in conjunction with the cost of living. Some groups don't object to raising the state's minimum wage, but they do object to tying it to an index. It can create serious problems if inflation gets out of control, and it makes it difficult for businesses to plan advance budgets.

Fast facts

Where we rank
States with the highest minimum wages, as of Jan. 1:
1. California: $8 an hour
2. Massachusetts: $8
3. Washington: $7.93
4. Oregon: $7.80
5. Vermont: $7.68
20. Florida: $6.79

[Last modified December 28, 2007, 22:50:27]