By Rick Harper, Ph.D. Executive Director, Office of Economic Development and Engagement, The University of West Florida Adjunct Scholar, The James Madison Institute

View Full Brief: The Impact of Florida's Minimum Wage Law on Employment in the Hospitality Industry (PDF)

Foreword By Robert F. Sanchez Policy Director, The James Madison Institute

For many years the three main bulwarks of Florida’s economy have been tourism, agriculture, and construction. Moreover, tourism has even helped to sustain Florida’s economy during the tough times, when economic downturns slowed construction and bad weather wiped out crops.

Florida’s millions of visitors pay many forms of taxes and fees. Yet other than making use of the transportation network, they place minimal demands on those government services – schools, health care, prisons – that are among the largest expenses in state and local budgets.

Tourism’s importance is never more evident than when the flow of visitors abruptly slows, as occurred after 9/11 and again after the Gulf Oil spill of 2010. An official who visited an Orlando theme park right after the terrorist attacks had disrupted air travel later said he could have rolled a bowling ball down the park’s main concourse without hitting anyone. Even now, there are lingering effects, including travel restrictions that make America less welcoming to foreigners.

In 2010, the national media’s hyped-up coverage of the Gulf Oil Spill caused a severe drop-off in tourism, especially in the Florida Panhandle. Some of the region’s residents say the inaccurate and sensationalized TV coverage inflicted more economic damage than the oil spill did.

What lures visitors to Florida and keeps them coming back is the hospitality industry – the restaurants, hotels, attractions, and ancillary services – that cater to visitors and Floridian’s alike. Now this job-creating industry is facing a growing challenge. A minimum wage amendment that Florida voters approved in 2004 has had an unintended consequence: a disparate and damaging effect on an industry in which many workers rely on tips as a substantial portion of their wages.

In this study, Dr. Rick Harper, Executive Director of the University of West Florida’s Office of Economic Development and Engagement, outlines the problem and recommends solutions.