Florida Passed Amendment 2, How Will This Impact The Economy?

Staff Writer: Sebastian Alsina

With the elections now over, Florida’s Amendment 2 passed giving college students’ more money in their pockets.

Over 60% of voters favored the increase of minimum wage to $15 per hour by the end of 2026. As of right now, Florida’s minimum wage is $8.56 per hour. 

70-80% of students in the U.S. work while attending college and roughly 40% of students work minimum wage jobs according to Urban Institute.

For many FIU students who are studying full time and are currently working part-time jobs to make ends meet, a raise in minimum wage “is not such a bad idea,” according to Rodney Sanchez, an FIU sophomore majoring in sociology.

“15 dollars per hour sounds great to me, originally since it helps me grow my savings more as well as [I] have more liberty to pay for things,” said Sanchez. “Will it cause inflation or reduce job availability due to the increase?” 

Sanchez questions how effective a raise in minimum wage could have in the overall economy, especially for those who are in college.

Florida’s lowest paid hourly workers last year had a median average of $9.25. It’s expected that by early 2021, we’ll see that average goes up to $10 according to the U.S. Bureau of Labor Statistics.

“For students and young workers who rely on minimum-wage jobs, an increase in the minimum wage over the current rate would be drastic since the current inflation rate may need to catch up,” said Manuel Lasaga, an FIU professor of finance.

He points out with an increase in the minimum wage, businesses will be impacted due to underlying economic factors such as inflation.

“In the past the minimum wage has remained fixed for years, and then suddenly increased, which can disrupt businesses who use minimum wage workers for their operations,” said Lasaga. “Depending on the rate of increase in the minimum wage, workers in basic manufacturing and in some service industries may be at risk of losing their jobs.”

Another issue that follows in raising the minimum wage is the price of living goes up. 

“Unfortunately, inflation erodes the purchasing power of the minimum wage and so adjustments need to be made to compensate for the rise in the cost-of-living,” said Lasaga. “Ideally, the minimum wage should be adjusted in line with the inflation rate, to protect a worker’s purchasing power.”