NewsLocal NewsElections Local


Business owners brace for minimum wage increase

Posted at 12:43 PM, Nov 04, 2020
and last updated 2020-11-04 18:33:22-05

CAPE CORAL, Fla. — Amendment 2 gets the green light with 60 percent of Florida votes.

While raising the minimum wage may mean extra money for hard workers, business owners say it could determine whether they stay open for business.

Bubba’s Roadhouse owner Jay Johnson says he’s still trying to recover from the financial strains caused by the COVID-19 pandemic. He says he lost 65 percent of his business early on and still hasn’t bounced back.

"It’s going to be tough. I think we have to look at how we do our business," he said. "I think there’s going to be some changes that are going to occur both in the number of people we employ, and also in the way we interact with our guests."

Business expert Karl Gibbons with Third Eye Management says Amendment 2 passing comes at the worst time as businesses fight hard to stay afloat during month nine of the COVID-19 pandemic.

“A dollar an hour over a period of time doesn’t sound like lots of money. But, when cash flow comes to literally a standstill, it might as well be a hundred dollars an hour extra,” said Gibbons.

Hooked Island Grill on Matlacha Island had to close for seven weeks in the Spring. Bubba’s Roadhouse is still not open at 100 percent capacity. Johnson has already calculated how much the new wage will cost him.

“By the time we get to year five, we estimate this is going to cost us an additional $354,000,” he said.

That’s annually if he keeps the same number of people on payroll.

Barb Koenig, owner of Hooked Island Grill said her full-time employees may turn into part-time employees, and prices could go up.

“You may end up having a $10 cheeseburger at any of our restaurants in the state, that now may become an $18 cheeseburger as we get six years down the road,” she said.

“That's going to cost us $85,000 in the first year. By year five it's $354,000 a year just on our server side. Not even to mention the cook side, so that's going to go up even more,” he said.

Next year the minimum wage will jump to $10 an hour. Gradually it will reach $15 an hour by 2026.

The new minimum wage will also affect servers who rely on tips. They usually make less than minimum wage because of tips. Their earnings will also increase, but not to the full $10 next year.