Florida’s Minimum-Wage Step-Ups and Their Effects on Real Wages and Employment in the Hospitality Industry

Abstract

Florida’s 2020 Amendment 2 established a pre-announced schedule of one-dollar minimum-wage step-ups each September 30 from 2021 through 2026. This paper studies whether the quarter immediately following each step-up is associated with changes in real weekly wages and employment in the hospitality sector (NAICS 72). This paper builds a county–quarter panel from BLS QCEW data for 2020Q1–2024Q4 and implement a border-county difference-in-differences design that compares Florida counties contiguous with Georgia or Alabama to adjacent counties across the state line. The preferred specifications include county fixed effects and year-by-quarter fixed effects and control for local labor-market conditions, sector scale, and county demographics. The post-step-up quarter (Q4) is associated with roughly a 2 percent increase in real average weekly wages on the Florida side relative to adjacent Georgia/Alabama counties, while estimated employment effects are small and not statistically distinguishable from zero. Results are similar when the wage outcome is winsorized to reduce sensitivity to extreme observations. The findings should be interpreted as conditional associations within a border-county design over the COVID-19 recovery window.