State Minimum Wage Increases and Job Loss: The Florida Experience

Abstract

In November 2004, Florida voters elected to establish a state minimum wage above the federal level of $5.15 per hour. The new minimum wage includes a wage inflation index; set at $6.15 per hour in May 2005, it therefore rose to $6.40 per hour in May 2006 and $6.67 per hour on January 1, 2007. At the time the law took effect, approximately 300,000 workers were making less than $6.15 per hour. Moreover, according to one study, an additional 550,000 people making between $6.15 and $7.49 per hour would also receive ever-decreasing “ripple effect” increases as the legal minimum level rose (because employers would choose to maintain some wage differentials among differently skilled workers in low-wage jobs and thus would grant pay increases of some sort up to about $7.50 per hour).1