Florida Gov. Rick Scott wants to use the minimum wage hike to steal California businesses
Florida Gov. Rick Scott is back, and he is again gunning for California’s businesses.
On Sunday, Scott arrived in Los Angeles, where he will spend three days trying to persuade companies and regular Californians to pack up and head for Florida. He made a similar trip last year, to entice shipping companies to move goods through Florida’s ports.
Now he says he has extra leverage: California’s pending minimum wage hike.
“My goal, one-hundred percent, is to get individuals and companies to move to Florida,” Scott said in an interview. “By raising the minimum wage in California, 700,000 people are going to lose their jobs, there are a lot of opportunities for companies to prosper in Florida and compete here and that’s what I’m going after.”
On Monday, California Gov. Jerry Brown sent a letter to Gov. Scott suggesting that his fixation on California is misguided. “We’re competing with nations like Brazil and France, not states like Florida,” Brown wrote. He also sent Gov. Scott a report with research on the effect of climate change on Florida’s coastline, and urged the Governor to “stop the silly political stunts and start doing something about climate change.”
An arm of Florida’s government released a radio ad that aired in L.A. and San Francisco last week criticizing the $15 minimum wage, which goes into full effect in seven years, warning of layoffs and job-stealing robots.
“This place is beautiful, but you just can’t afford to live here,” the spot warned.
Gov. Brown’s office has defended itself against Scott’s persistent jabs by pointing out that California seems to be doing just fine, job-wise.
“As one of the millions of tourists flocking to the Golden State this time of year, we’d like to extend a warm welcome to the governor,” said Evan Westrup, Brown’s press secretary. “Since his last 2,000-mile cross-country jaunt, California has added twice as many jobs as Florida.”
California employers have added new 420,800 new jobs since March 2015, compared with 234,300 added in Florida. Jobs have grown by 2.6% in California, and by 2.9% in Florida.
It is not yet clear how raising the wage floor gradually through 2023 will affect employment. American Apparel and other garment manufacturers have indicated that the wage increase may induce them to shift their production out of the L.A. area.
Scott’s estimate of 700,000 jobs comes from a study that is not based on data about California, and some economists say that projection is off-base.
“It’s way outside the consensus of economists,” says Michael Reich, an economist at UC Berkeley.
Reich led a 2015 study on the impact of a $15 minimum wage in Los Angeles, and found that giving people more money to spend would balance out any negative effect of more expensive labor, even after factoring in price increases and automation.
That study found no net job loss in the city.
What’s more, Reich said, the industries that will feel the strain of higher wages most are ones that are least likely to move. About a third of workers who will get a pay bump with the new law are working in stores or restaurants.
“A restaurant isn’t going to move to Florida to serve California customers, same with retail,” Reich said.
Scott said that he’s fixated on getting people, not just businesses, from California to move to Florida, with the aim of boosting the state’s income base.
The Tax Foundation, a conservative group, has gathered data from the IRS that it says show people with incomes totaling a net $105 billion moved to Florida from other states between 1993 and 2010. California saw a net $51 billion migrate out of the state during that period, according to the data.
However, census data show that more people moved from Florida to California than the other way around in 2014.
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