The Michigan Chamber of Commerce advocates for the best interests of businesses operating within the state. Our mission is to promote conditions favorable to job creation and business growth in Michigan and a minimum wage hike, while well-intentioned, is actually economically self-defeating.
Despite legislation passed and signed into law to increase the state's minimum wage in May of 2014, progressive groups continue to call for a higher minimum wage. The Service Employees International Union is actively organizing job walk-offs, strikes and protests, demanding a $15 per hour wage. Furthermore, legislation has been introduced in the Michigan Senate to raise the minimum wage to $15 per hour on January 1, 2018 and a ballot proposal emerged in August 2017 to increase the minimum wage to $12 an hour by 2022.
It is important to note that a four-year increase in the minimum wage is currently being phased in. Senate Bill 934 of 2014, which was signed into law in May of 2014, increases the minimum wage from $7.40/hour to:
- $8.15/hour on September 1, 2014
- $8.50/hour on January 1, 2016
- $8.90/hour on January 1, 2017
- $9.25/hour on January 1, 2018
The law also ties future increases to the Midwest Region’s CPI (based on the most recent five-year period for which data is available beginning April 2019), but specifies that annual increases for CPI cannot exceed 3.5 percent. Furthermore, inflationary increases do not take effect if Michigan's unemployment rate, determined by the US Bureau of Labor Statistics, is 8.5 percent or greater for the year preceding the prescribed increase. This new law also increases the minimum hourly wage for tipped employees from $2.65/hour to a hourly wage rate of 38 percent of the minimum hourly wage rate.
Gretchen Whitmer, the only announced Democratic gubernatorial candidate for 2018, has told her supporters “I’m for it” [raising the minimum wage] and that a $15 minimum wage is “worth considering.” And “I believe that makes a lot of sense….” Watch YouTube video.
Under the ballot proposal being pursued by the Michigan One Fair Wage Committee for the November 2018 election, the minimum wage would continue to increase by a set amount versus increasing annually by the rate of inflation. Under the proposal, the wage would increase to $10 an hour in 2019, $10.65 in 2020, $11.35 in 2021 and $12 in 2022. The proposal would require annual adjustments for inflation beginning in 2023.
In addition, under the proposal, the minimum wage for tipped employees would increase from $4.80 in 2019 to $6.39 in 2020, $7.94 in 2021 and $9.60 in 2022. Tipped employees' minimum wage would be 100 percent of the minimum wage by 2024. Under current law, all tipped employees are required to make at least the minimum wage. If their tips plus the tipped employee minimum wage does not equal or exceed the regular minimum wage, the employer must pay any shortfall to the employee.
Finally, the proposal would require "equal pay for equal work," thereby replacing the existing market system of wage determination with government rules and regulations governed by state bureaucrats and judges.
Where We Stand:
The Michigan Chamber opposes any further increase in the state’s minimum wage, especially given that the state’s minimum wage was increased in September of 2014 and the wage is set to increase again in January of 2018. If Michigan were to further increase its minimum wage, it would result in our state having one of the highest minimum wage rates in the country, thereby making Michigan uncompetitive in the race for jobs. Michigan already has the highest minimum wage in the region, outpacing Indiana ($7.25), Illinois ($8.25), Ohio ($8.15) and Wisconsin ($7.25).