Ben Guzick, a Gainesville bakery owner, is evaluating how he needs to run his business after the recent increase in Florida’s minimum wage to $12 on Sept. 30.
The minimum wage will increase by $1 annually until 2026 when it reaches $15 an hour. This went into effect on Nov. 30, 2020, when Florida voters approved a constitutional amendment to increase the state’s minimum wage yearly, according to the Florida Department of Economic Development.
Guzick is feeling the effects of the increase and reevaluating what he needs to do next.
“When you’re running a business, you’re in it daily,” Guzick said. “It’s in your interest and everyone’s long term to devise ways to be better, more efficient.”
Guzick owns Uppercrust, a French bakery that has 54 employees working in two Gainesville locations. At the main location on Northwest 16th Boulevard, the staff serves over 300 people daily. The smaller location focuses on counter service and serves about 140 people daily.
Now, Guzick said he may have to change operations to meet the minimum wage demands.
“When it costs more to produce anything, one thought is to potentially increase the price of the product,” he said. “And that’s happened across the board.”
Uppercrust increased the prices of its cakes, coffees and bread items two months ago. This is the third time the bakery has increased prices since 2018. Guzick said this was a response to the overall operating cost including labor.
Jane Osmond, one of the owners and managers of SweetBerries, said their prices will have to go up also.
The prices of sandwiches have increased by $1 because the cost of roast beef and other meats and breads have increased since July. The custard has also increased by about five to 10 cents.
Guzick said pricing has always been a challenge. When it comes to more laborious products like the bistro and pastries, the cost has been difficult to determine because of the ingredients and labor costs. Now, he said automation may be one answer for businesses.
“Broadly speaking, those are the two levers at local businesses’ disposal to try to figure out how we can automate more or change to a degree the product or service we provide to minimize labor costs or mitigate it,” Guzick said.
Jonathan Adams, an assistant economics professor at the University of Florida, said workers could be substituted for capital, like McDonald’s self-service kiosks replacing cashiers.
“When you used to go to McDonald’s, someone would take your order. Now, you go and there’s a machine. Or, you want to order a coffee at a coffee shop across the street, now you can do it on your phone,” he said. “You might see an acceleration of that when the minimum wage is rising.”
A price increase is more likely, though.
“If you’re a consumer, expect to see prices rise,” Adams said. “And if you’re a low-wage worker, expect your income to go up.”
These labor costs increase because of the minimum wage. However, these costs go up for all businesses when the minimum wage increases. So, there is a competition to offer the best wage to bring in more workers.
“Our labor costs have definitely gone up and will continue to go up – not just as minimum wage goes up, but as our industry becomes more competitive for staff,” Osmond said. “We have to pay more to compete with all the restaurants in town, so our payroll has definitely skyrocketed.”
This leaves Osmond to adjust SweetBerries’ prices and evaluate the restaurant’s operations to ease the labor costs.
Thus, the dilemma: It costs the business’ operations to pay employees more.
Osmond said she would rather not cut employees and has considered other ways to serve her customers to cut down on labor costs.
SweetBerries chose not to have a waitstaff because tips are inconsistent. Osmond also tried putting employees on salary, but the employees disliked being on salary. The restaurant is short-staffed, so Osmond said she is also struggling with paying employees overtime, which drives labor costs up further.
At Uppercrust, Guzick said he has cut certain menu items. He considers the ingredients, the time it takes to make the food items and what fits the bakery’s values to remain true to French culture. The bakery’s $6.50 loaves of bread is one item he is considering cutting.
“How long does it take to proof it? How long does it take to shape it? How long does it take to store and bake it?” Guzick said. “If you add all those up, and if the item is barely covering those costs, then it’s like OK, should we really be doing this?”
Yet, minimum wage employees are excited to see a few extra dollars on their paychecks.
Nevaeh Peña, 21, earns $12 per hour and tips at Volta Coffee, Tea & Chocolate on Southwest 2nd Street and said she’s seen the effects of the increase in minimum wage.
“We’ve had to increase our menu prices, so I definitely have seen the impacts, but I think they’re still in favor of us making a higher wage.”
The cost of living is still too high even with the increase to $12. Peña said she thinks $15 is a good starting point and the only solution.
“I really do think the answer is to raise the minimum wage. I just think there’s no other solution,” Peña said. “Service workers are essential, they’re vital, and we need to pay them more. Minimum wage is not a living wage right now.”
Amber Reignn, 22, a key holder at Bath and Body Works, said she also thinks minimum wage workers deserve more.
“Like, we’re putting in all this work. Everybody is,” Reignn said.
She said $15 is a good starting point for minimum wage, but the wage should take into account what things cost in different parts of the country.
“I think it should be relative across different states because here in Florida, $15 is not the same as $15 in California,” she said. “So, I think it has to match and be relative across the nation.”
Florida’s minimum wage increase is relative to the federal minimum wage as it continues to increase. The federal minimum wage has remained stagnant at $7.25 since 2009, according to the Florida Department of Economic Development.
Owners Guzick and Osmond both said they think the minimum wage should be livable, especially for their full-time employees.
“If you as an employer aren’t able to provide a living wage to the folks who work for you to provide the products or services that you’re in business to do,” Guzick said, “then you’re doing something very wrong and shouldn’t continue to operate in the way that you do or at all.”