What Does Florida's Minimum Wage Buy You?

Aug 16, 2016

How much can Florida’s minimum wage actually buy? Well, not a whole lot, apparently. And making that wage will not carry a person out of poverty, according to new study from the National Center for Children in Poverty at Columbia University.

The study modeled what families have to pay for when parents work—child care, transportation, taxes—and compared those expenses to increases in earnings as parents work more hours.

According to the study, with Florida’s current minimum wage at $8.05 an hour, pretty much no matter how many hours people work they’re still not making enough break even.

“Child care becomes increasingly a concern, especially if your children aren’t in school yet,” said Seth Hartig, a research analyst who co-authored the report. “The question [becomes] how can you afford to go to work, which is kind of an ironic question.”

Annual net resources by hours worked per week, two-parent family based on a family living in Jacksonville, Florida, with one child age 3 and receiving SNAP, Medicaid/CHIP and federal tax credits, when eligible.
Credit The National Center for Children in Poverty at Columbia University’s Mailman School of Public Health

Another big issue is the state’s decision not to expand Medicaid, one of 19 states to make that choice. As a result, most full-time workers who make minimum wage earn too much money to qualify for Medicaid, but too little to get subsidies through the Affordable Care Act.  Insurance costs for these people in the “Medicaid Gap” are often very burdensome, if not prohibitive. With higher wages, however, workers qualify for subsidies after working fewer hours and get the benefit of these federal subsidies. Subsidies from the ACA account for the spike in net resources for a person making $8.05 per hour in the above graph.

There have been several attempts over the past few years to increase the state’s minimum wage, but none have really gained any traction. Opponents to any increase argue that a higher minimum wage would mean job losses and increased burdens on small businesses.

Hartig’s study finds it would require an $11.68 hourly wage for a two-parent, two-child household to escape poverty.

You can play around with the study's  tool and change variables like family size and location to see what kind of net resources you would end up with.