A proposal to raise Florida’s minimum wage rate to $15 has some local restaurant owners and others worried about how the increase will affect their businesses, their employees and the “unintended consequences” that may come with it.
The “Florida Amendment 2, $15 Minimum Wage Initiative” will be up for vote on the ballot in November’s general election.
A 60% majority vote is needed for the approval of the constitutional amendment. If that happens, the state’s minimum wage of $8.46 an hour will increase by $1 a year until reaching $15 an hour in 2026.
At a recent round table discussion organized by the Sun, a group of restaurant owners, nonprofit representatives and more met to discuss the amendment, including:
Keith Farlow, Farlow’s on the Water in Englewood
Lynne Dorler, The Boys and Girls Club of Charlotte County
Ned Byrne, The Charlotte County Curmudgeon Club
Bruce Laishley, Smuggler’s Enterprises in Punta Gorda
Dan and Sue Atamanchuk, Lock ‘N Key Restaurant and SandBar Tiki & Grille in Englewood
BriAnne Schultz, a local minimum-wage worker
Mike and Justin Pachota, owners of Sharky’s On the Pier and Fins At Sharky’s restaurants in Venice
How will it affect the restaurants?
“Amendment 2 would take the minimum wage up to $15 but for our industry it’s a little bit different (in that) it would it take the server wage up to almost $12 an hour. Currently, that sits at $5.44,” Farlow said.
Servers and bartenders generally get paid less than the minimum wage rate because they are considered tipped employees.
If the minimum wage went up to $15 an hour, tipped employees would make $11.98 an hour, according to the Florida Restaurant & Lodging Association website.
“(When I heard about this) I quickly put a pen and paper to what this meant to my business and it was hundreds of thousands of dollars and I’m one restaurant,” Farlow said. “I employ over 150 people. Just in servers, my increase in labor costs goes up over $100,000. I went ‘wow’ this is going to put restaurants out of business. We can‘t sustain that as an industry.”
The Atamanchuks have around 250 employees between their Lock ‘N Key and SandBar restaurants.
“Going by payroll this past year (and applying the) $12 an hour between both places will be over a $1 million increase,” Dan said. “I’m going to have to come up with a $1 million in five years that I don’t have now. That has to come from some place.”
Dan went on to say that raising menu prices won’t be a solution to afford the labor cost increase.
“I don’t believe the consumer that is out there will be able to weather someone charging (more) for a hamburger or whatever it is that the restaurant serves,” Dan said. “I know that there is not a server or bartender in my places that understand what’s going on that we’ve talked to that wants this to happen because they know it’s going to cost them a lot of money.”
How could it affect employees?
While visiting Seattle − where the wage increase has already been implemented − Farlow said servers are suffering from the increase because restaurants have added service charges to customers’ bills.
“We went to 22 restaurants in that time period and at all 22 restaurants, every single server had the same story in that they were making a lot more money before this minimum wage went into effect,” Farlow said.
“As a customer, if you come to the restaurant and you say, ‘Well I’m (already) paying 10% with the service charge, that’s good enough’, when you used to tip 20% and that server used to make a lot more money and that’s an unintended consequence,” Farlow continued.
Laishley and the other owners believe the increase would have a negative effect on all the employees including those who don’t make tips.
“If you raise your entry level employees to $15 an hour, your line cooks (and other established employees) that only make $16 an hour are going to be insulted and they are going to want $20 (and so on),” Laishley said. “It’s a domino effect.”
The owners agreed that although the entry level employees − hostesses, table bussers, etc. − would benefit from the increase, they would also suffer because they would be the first employees to be let go.
“I employ over 20 high school kids (at entry level),” Farlow said. “We start those out at $10. A high school kid does not need to make what now is being deemed a living wage (with the proposed increase). They just need to make a wage.”
“So, we will not employ high school kids,” Farlow continued. “There’s no way I can sustain that (increase) and bring my servers up to $12 who are making now around $5 employee time.”
Laishley echoed Farlow’s sentiment saying that most restaurants and small businesses are going to struggle paying entry level employees $15 an hour.
“Look at a place like Fishermen’s Village (in Punta Gorda),” Laishley said. “There are 40 (or so) mom-and-pop shops in there. Do you think those mom-and-pop gift shops are paying $15 an hour? No way.
“They’re already struggling because the economy is in the tank and people aren’t going out. Now they are going to hit them with this? They just can’t do it. That means these entry level employees won’t be working which is even a sadder thought.”
Who could benefit from the increase?
For single moms like Schultz, the current minimum wage rate just isn’t enough.
“I’m barely making do,” Schultz said. “I’m a single mother. I have two kids and I make $380 a week and I’m pulling weeds and I’m doing whatever I can and it’s not just me. There’s a lot of other mothers that (are struggling). I’m in a group with eight other girls and we’re having a hard time. I’d be blessed with $12 or $13 an hour.”
She said part of their problem is finding people to watch their kids.
“You have to figure day care is $700 per child,” Schultz said. “The government does help us with Medicaid and food stamps but as soon as we get a job, most of it goes away.”
Housing is also an issue for a lot of Charlotte County mothers, according to Schultz.
“You can’t find a one-bedroom for under $700,” she said. “In Charlotte County, if it’s a boy and a girl, you can’t have them in the same bedroom so that’s two bedrooms right there even if I slept on a couch. I have get a two-bedroom house automatically which then goes up in rent. It’s hard.”
Justin Pachota questioned how the $15-an-hour pay bump would affect government assistance programs like Medicaid.
“What happens if all of a sudden it puts somebody’s wages over the point where they can’t receive government assistance,” Justin said. “We deal with that sometimes with our older employees where if they make too much, they work too many hours, they can’t get their social security.”
What about the kids?
Nonprofits like the Boys and Girls Club would also be affected by the increase, not just directly but also indirectly, according to Dorler.
“In the nonprofit world that depends on donations, if businesses (such as your restaurants) don’t have the resources to be able to help the nonprofits, are we going to put it on the backs of our parents?” Dorler said. “We have scholarships available for families that can’t afford our programs and we go to our businesses (to help with that).”
Dorler said they will also have employees that need to make up to $15 an hour if the increase passed, costing them “hundreds of thousands of dollars over the course of five years.”
“We would have to raise the costs of the programs or just eliminate the programs (to afford the increase),” Dorler said. “Now you don’t have a place for your kid to go. That’s what the trickle down is for all of us.”
Byrne said church-based childcare programs will also suffer from the increase.
“I used to be involved with one of the childcare programs here in Punta Gorda and they don’t make a lot of money,” Byrne said. “This is going to come right back to you. They are going to have to raise their rates just to break even. They’re really breaking even right now.”
How do restaurants survive if it passes?
“How do I pivot (if it passes),” Dan said. “Just like we pivoted during COVID-19. We’ve had to do certain things − deliveries, expand to-go service − a lot of time and stress went into making things happen.
“With this, maybe you end up with more food runners and drink runners and it’s more of a self-serve kind of thing with a kiosk on the tables. I don’t know that answer yet but we all do love the people that work for us. They’re family.”
Laishley said owners like himself and the others in the room want nothing but the best for their employees.
“We want to see them do better,” Laishley said. “We love at the end of the year when we can give bonuses out. It makes us feel good.”
Mike Pachota said his employees at Sharky’s and Fins are offered savings plans and health insurance assistance.
“Most personally-owned restaurants are like that,” Mike said. “It’s family. Those are my kids, you know. Teaching them how to save money, make money, not waste it and things like that, that’s all part of the entire program of being in the restaurant business.”