Florida has become the 8th state to approve a higher minimum wage for its residents. Over 60% of Florida voters approved to increase Florida’s minimum wage from $8.56 to $15 per hour by 2026. Tipped employees will see their minimum rate increase to $11.98.
Many small business owners have taken to social media stating that this increase could have a negative impact on their business. Small business owners have shared that they struggle to compete with large corporations and often times take much smaller profit margins in order to compete in the free market. Many feel increasing the minimum wage will do one of two things.
Labor costs can account for as much as 70% of total business costs. This includes employee wages, benefits, payroll or other related taxes. Small businesses will see an increase of approximately 50% to their overall bottom line labor costs between now and 2026.
Consumers will see an inflation of prices which will be passed on to the consumer. Small business owners share that this squeeze could be the final nail in the coffin as they attempt to stay competitive in a market that’s being squeeze by large corporate conglomerates.
Many economists have stated that increasing the minimum wage will not create a significant increase in inflation. This makes me wonder. Is this because large corporations can absorb the costs short term in order to squeeze out small business to reduce market competitors? I’d be interested to hear your thoughts and concerns. Both from a small business standpoint and an employee standpoint.