Democratic Hopefuls, Others Rally Around $12-$15 Minimum Wage; Chamber Opposed

September 9, 2017

On the heels of announcements by all four Michigan Democrats running for governor that they are backing a national push for a $15 minimum wage, supporters of a proposal to increase the minimum wage to $12 an hour filed language with the state to put the issue on the 2018 ballot. 

Coincidence? We think not. Democrats clearly see the minimum wage as a populist issue that could drive turn-out for the November 2018 election.

The Michigan Chamber opposes these reckless proposals. It is irresponsible to call for another increase to Michigan’s minimum wage, which is already scheduled to increase for the fourth straight year in January 2018.  Under legislation passed in 2014, a four-year increase in the minimum wage is currently being phased in. The law requires the minimum wage to increase from $8.90 to $9.25 an hour in January of 2018. 

Under the ballot proposal being pursued by the so-called “One Fair Wage Committee,” the minimum wage would continue to increase by a set amount versus increasing annually by the rate of inflation. The wage would increase to $10 an hour in 2019, $10.65 in 2020, $11.35 in 2021 and $12 an hour in 2022. The proposal would require annual adjustments for inflation beginning in 2023.

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.

If a $12 or $15 minimum wage were to be approved, Michigan would have one of the highest minimum wage rates in the nation, 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). A $12 or $15 minimum wage will force many job providers, and especially small businesses, to make difficult decisions to make up for government-mandated labor costs, including automating and outsourcing work, cutting benefits and hours or the very workers these policies are intended to help.