Minimum wage increase requires more study

People rarely say they don’t want to make more money. And we Americans, being a generous lot, generally want others, especially those clumped on the lower rungs of the economic ladder, to pocket more dough.

To give them a boost, many recommend boosting the minimum wage. The popular figure bandied about in many quarters is $15 an hour — which would almost double the rate in Florida. Hence, a new study analyzing the potential effects of that should give us pause, especially if this issue re-emerges in Tallahassee next year.

As reported in Florida Trend, the study released last month by Carnegie Mellon University in Pittsburgh finds that Florida business owners would react harshly to a government mandate to pay workers $15 an hour.

The survey polled 306 firms. Threequarters of them had fewer than 25 employees and 82 percent were not franchises. And roughly two-thirds of them represented the backbone of Florida’s economy: the hospitality and retail industries.

Currently, Florida’s minimum wage is $8.10 an hour. It’s slated to go up to $8.25 on Jan. 1.

When asked if the state increased that to $15 an hour, many companies reported serious adverse effects.

Forty-eight percent said they would very likely raise prices, and another 11 percent were somewhat likely to do so.

Forty-three percent indicated they would very likely roll back employees’ hours, while another 13 percent were somewhat likely to do so.

Thirty-nine percent were very likely to lay people off, as another 12 percent were somewhat likely to trim staff.

One third said they would either seek technology to replace human beings or favor hiring more highly skilled workers instead of newcomers to the labor market.

Thirty percent responded that they would close.

Optimists among the pro-$15-an-hour set would point out that most of that wouldn’t actually happen. They could also point to studies from outside Florida that suggest raising the minimum wage produces no negative effects.

But policymakers in Tallahassee should be wary of such arguments. During Florida’s 2016 legislative session, bills were introduced — but died in committees — to guarantee workers $15 an hour by January 2017. Florida TaxWatch, the respected economic think tank in Tallahassee, noted afterward that had the legislation passed, employers immediately would have been socked with an additional $1.8 billion in labor costs.

TaxWatch pointed out last year that only 2 percent of Florida workers toil for minimum wage, and that the median hourly rate statewide was $15.29. Lawmakers should not automatically or completely dismiss the potential benefits of lifting salaries for these workers. But they should probe deeper the potential impact of such a dramatic hike. We may learn, as the Carnegie Mellon study suggests, that the cure may be far worse than the alleged illness.

This editorial first appeared in The News Herald (Panama City, Fla.).