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MichiganVotes: Minimum Wage Increase — A Serious Effort Or Just Rhetoric?

Bill would make it illegal to work for less than $10 per hour

A push to raise Michigan's minimum wage could be in store for the 2013-2014 election cycle.

Sen. Bert Johnson, D-Highland Park, introduced Senate Bill 203 in February. It would increase the minimum wage from $7.40 per hour to $10 per hour over a two-year period.

Under the bill, minimum wage increases would begin on Jan. 1, 2014 with an increase to $7.90. After that, the minimum wage would automatically increase every six months. It would jump to $8.40 an hour on July 1, 2014; then to $9 an hour on Jan. 1, 2015. It would then increase to $9.50 on July 1, 2015 and reach $10 per hour on Jan. 1, 2016.

Additionally, the bill would tie the minimum wage to the cost of living. From 2016 on, the rate would increase with the cost of living every two years.

Less than two months after the bill was introduced, Progress Michigan and Oakland County Commissioner Dave Woodward released a poll on the topic of raising the minimum wage. The poll was from a survey of “Michigan residents” conducted by Google Consumers Survey. It showed that more than 70 percent of Michigan residents would support increasing the minimum wage to $9 or more per hour.

"Every Michigan resident who's willing to work hard and play by the rules should have an opportunity to enjoy a middle class lifestyle," Progress Michigan Executive Director Zack Pohl said in the press release announcing the poll results. "Unfortunately, today's minimum wage is near poverty levels and fails to provide a decent, secure living for the average hard-working family"

Pollster Steve Mitchell, of East Lansing-based Mitchell Research, said that a poll showing more than 70 percent support for increasing the minimum wage was probably accurate but most likely because the questions were generic.

“When you just present people with the question 'should we increase the minimum wage,' it always sounds good,” Mitchell said. “It's sort of like asking, 'should everyone get better Christmas presents?' But when you start talking about the actual ramifications and the negative effects, it doesn't sound so good anymore.”

Wendy Block, director of health policy and human services for the Michigan Chamber of Commerce, said minimum wage increases often hurt low-income workers more than they help them.

“It drives up the cost of entry-level jobs, encouraging employers to hire higher-skilled job applicants, and generally increasing the cost of doing business,” Block said. “Michigan continues to have an 8.9 percent unemployment rate. Ideally, government would be implementing policies to help workers get jobs, not actively increasing the cost of hiring workers and creating barriers to entry.”

Noting that Sen. Johnson's bill would increase the minimum wage by 35 percent, Block said it could have a detrimental impact on low income workers. She pointed out that, if economists' estimates held true, employment would drop by more than 17 percent among those affected if Sen. Johnson's measure were enacted.

“Labor economists estimate that for every 10 percent increase in the minimum wage rate, employment among those affected drops by 5 percent,” Block said.

Gov. Rick Snyder has made it clear that he opposes a minimum wage increase at either the state or federal level. He also has argued that increasing the minimum wage could actually harm lower income workers.

Gov. Snyder has been quoted as saying, “...in fact, you could cause people to lose their job by raising the minimum wage.”

While the passage of Senate Bill 203 is unlikely, it is possible that those supporting the measure are considering a different plan. Placing a proposal to increase the minimum wage on the 2014 statewide ballot is one possibility.

The press release announcing the poll results included a speculative reference to the issue being on the 2014 ballot. It stated: “Thirty-three percent of survey respondents indicated that if the issue were on the November 2014 ballot, it would make them more enthusiastic to vote, most notably amongst women, households making less than $75,000 and younger voters.”

According to the Michigan Chamber of Commerce, the greatest number of employees impacted by a minimum wage increase would be those who work for retailers, hotels and restaurants.

Sen. Johnson's office did not respond to a request for comment. 

(Editor's note: Every Saturday, Michigan Capitol Confidential brings you a story about a bill being discussed in committee or presented in the Legislature for a vote. For more information, go to www.MichiganVotes.org.)

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