News Column

Fla. Minimum Wage Rises 12 Cents an Hour

Jan. 7, 2013

Emily Roach

shovel and dollar

Minimum-wage workers got a raise Jan. 1 of 12 cents an hour -- an extra $4.80 a week for full-time workers.

The state of Florida indexes its minimum wage to inflation, and the adjustment kicks in at the start of each year. The new hourly wage of $7.79 may be a burden for some larger employers, especially those in the retail or hospitality sectors that employ hundreds or thousands of minimum-wage workers, but worker advocates say it helps people who are living on the edge.

"That small percentage of people, that's a very important group of people," said Pat Emmert, president of the Palm Beach/Treasure Coast AFL-CIO.

Younger people who are just starting out and single mothers trying to support their children are typical minimum wage workers, Emmert said.

"They need to have a paycheck," she said. "It helps the entire community, really."

The statistics show that most minimum-wage workers are teens or young workers in their 20s. Nationally, 5.2 percent of hourly earners are paid minimum wage or less. Of those, 49.5 percent of workers ages 16 to 24 are paid minimum wage, according to the U.S. Labor Department.

In Florida, 6.3 percent of workers who are paid hourly receive minimum wage or less. For Palm Beach County, a fair market rent for a two-bedroom apartment, according to the U.S. Housing and Urban Development Department, is $1,138 -- essentially an entire month's take-home pay at minimum wage.

Alicia Olexa is one of those young workers, although she chose to be in that situation.

She's six months out of the University of Central Florida and six months through her Americorps VISTA year where she runs the Faces of Homelessness Speakers Bureau for the the Palm Beach County Homeless Coalition. And she's living on a stipend of $550 every two weeks after taxes.

"You have to know the population that you're serving," she said. "You have to live at poverty level."

Olexa, 23 and from Melbourne, applied for food stamps, shops at thrift stores and buys groceries from Dollar Tree -- usually whatever she can get for $5.

"You lose a lot of friends because of it," she said. Not because she's stigmatized, but "because you can't go out and hang out."

"I can barely make it, and I'm just one person," she said.

One college-educated person who already had a car and still has a cellphone on her parents' plan. She's trying to figure out how to pay for car repairs when she can't save anything from her paycheck.

"It's impossible to live at min wage, it really is -- at least live a good quality life," she said.

Palm Beach County Urban League President and CEO Patrick Franklin agrees. Still, 12 cents adds a few needed dollars for families that have so little.

"Many of our people are still hurting out here, and minimum wage is unfortunately what many of our breadwinners are earning right now for our low-income families," he said.

For all the groups that line up to support minimum wage laws, business groups usually balk.

Florida's minimum wage is higher than the $7.25 federal figure, which has lost about 7 percent of its value in the three years since it was raised, according to the Economic Policy Institute.

Mandating an increase in the minimum wage can make the state less competitive when wooing businesses to locate here, said economist Rick Sessa of the Florida Chamber Foundation. The foundation developed the Six Pillars approach to economic development with the Economic Council of Palm Beach County.

"The minimum wage increase probably won't have a large effect on Florida employers mainly because it only reflects inflation," Sessa said.

However, retailers, restaurants and other industries that tend to hire low-wage workers are seeing cost increases -- and those are the industries that have recovered the most since the recession.

The Economic Policy Institute points out that young people who generally hold those jobs have had record unemployment during for the past few years. It is still 23.5 percent for ages 16 to 19 and 13.7 for 20 to 24, according to December figures released Friday.

Because more than 80 percent of minimum-wage workers are young, the money isn't generally being used to support a family, the group said.

Furthermore, Sessa said, those businesses will either further delay hiring or reduce workers' hours due to the additional payroll costs. Also, an increase in the minimum wage leads to job loss for minority workers, according to studies the institute cites.

"Twelve cents doesn't seem like a significant increase, but when you have hundreds or thousands of workers, it adds up," Sessa said.

Other economists have pointed out that the majority of jobs added during the recovery are low-wage and part-time positions that have not replaced the lost wealth of families hit by layoffs and decreased home values. But the long-term unemployed are taking low-wage jobs because benefits have expired and work skills are eroding. Where minimum wage falls:

$64,100 -- Palm Beach County median income

$57,900 -- considered low income for family of four

$40,550 -low income for single-person household

$36,150 -- very low income for family of four

$25,350 -- very low income for single-person household

$23,050 -- 2012 federal poverty threshold for family of four

$16,208 -- yearly income for full-time worker at minimum wage

$11,170 -- 2012 poverty threshold for single-person household

Source: U.S. Dept. Health & Human Services, Housing and Urban Development

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Source: (c)2013 The Palm Beach Post (West Palm Beach, Fla.) Distributed by MCT Information Services

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