The State of Florida and many of its local governments have provided millions of dollars in incentives for businesses to locate, remain, and/or expand in this state. The goal has been to boost the economy, expand the tax base, and reduce poverty by fostering the creation of good job opportunities throughout the state.
To help achieve this goal, the state has offered tax relief, reduced onerous regulations, improved its schools, and sent state and local officials on trade missions around the world, on recruiting trips to other states, and on sales calls to Wall Street.
These officials know full well that in today’s global economy, both capital and labor are highly mobile. Therefore, for Florida to succeed, its business climate must remain highly competitive — both in reality and in reputation.
Unfortunately, Florida is now emitting mixed signals with regard to its business climate. In several jurisdictions — including but not limited to Miami-Dade, Broward, Orange, and Alachua counties — local elected officials, possibly with the best of intentions, have begun enacting or considering county ordinances that tend to create an uncertain climate for businesses while also adding to their administrative burdens and compliance costs. Such higher costs are inevitable, especially for businesses that operate in many locales, when these kinds of rules vary widely from one jurisdiction to the next.
This study by Florida State University economist Dr. Randall G. Holcombe focuses on two types of these local ordinances. One type mandates an employee benefit — forms of leave, primarily paid sick leave.
The other type establishes local procedures for dealing with a totally different kind of issue, allegations of a crime known as “wage theft.”
Both actions, though enacted with the noble intention of helping workers, are misguided and may well have the opposite effect. Indeed, that’s what happened after Connecticut passed a state law requiring businesses to provide paid sick leave. As a study by the highly respected Employment Policies Institute reported:
“Of the 156 businesses that responded to the survey, 86 had started providing sick leave to comply with the new law. Prior to the law taking effect in January 2012, 31 of the businesses surveyed had scaled back on employee benefits or reduced paid leave (or both) to account for the cost of the new law. Twelve had cut back employee hours, and another six reduced employee wages. Nineteen businesses raised consumer prices and six laid off employees. Sixteen businesses indicated they had decided to limit or restrict their expansion within the state.”
