It’s no secret that Democrat gubernatorial candidate Andrew Gillum harbors a soft-spot for far-left economic policies. He was endorsed in the Democratic primary by two of the nation’s leading socialist politicians. Gillum even campaigned with Bernie Sanders, who is probably a really nice guy who just doesn’t actually understand how free market economies function. On Gillum’s own website, he boasts about his plan to hike Florida taxes to the point where we would shift to within a single percentage point of the exorbitant tax rates in California, while simultaneously hiking the minimum wage to $15 per hour.
Those policies haven’t worked in California. There’s no chance they will work here.
There are big differences between Florida and California. And none of those differences are favorable to Gillum’s tax-and-spend liberal policies. The backbone of our state economy is the tourism industry, which desperately needs entry-level restaurant and hospitality workers to make ends meet. And it is radically different from, say, Silicon Valley, or California’s insurance and financial industry sectors, which rely on highly skilled engineers, software developers and other specialized expertise. Hiking the minimum wage in California resulted in lost jobs in the restaurant industry. But California’s economy doesn’t depend on hospitality workers like Florida does.
Hiking taxes and forcing business owners to pay entry-level workers $15 per hour will result in a destructive route of Florida’s economic recovery and devastate families who currently earn their income in the hospitality industry.
Even the notoriously partisan PolitiFact quoted an expert who warned of the devastation to come:
Kurt Wenner, vice president of research at Florida TaxWatch, said that if a business is forced to pay more in taxes, it can raise prices, reduce employment, reduce costs or investment, or reduce profits. “Those outcomes would all potentially have negative impacts on residents,” Wenner said.
Just to be clear, we’re still only talking about Gillum’s plan to hike taxes. But forcing businesses to choose between raising prices, eliminating jobs, reduce costs or investment, or lose profits, are all very bad things for everyone in the state.
Then there is Gillum’s plan to hike minimum wage. To many, the idea of a $15/hour minimum wage seems like a good thing. But the Washington Post published the results of a study earlier this year that showed that arbitrarily hiking the minimum wage, rather than letting wages rise naturally, resulted in a substantial loss of jobs:
“…the increments in the minimum wage from 6.75 to $7.50 in 2007 and to $8 in 2008 were estimated to increase earnings in limited service restaurants slightly more than 10% but reduced employment by about 12%.” The bump up to $10.50 by 2017 raised earnings in those restaurants by another 20 percent, but reduced employment by another 10 percent.
Keep in mind, we’re talking about California, where tourism and hospitality doesn’t even rank as a top economic sector:
Compare that to Florida, where tourism and agriculture, both traditionally dependent on entry-level workers, form the one-two punch of the economy. When Florida’s tourism and hospitality industry are both forced to cough up a lot more money to pay taxes and raise the wages they pay workers, the results will not be pretty
If Andrew Gillum is elected and allowed to unleash his economic plan on Florida, businesses and families across the state are in for some pain.