A news service for the people of Michigan from the Mackinac Center for Public Policy

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El Granjero Mexican Grill celebrated its 5th anniversary recently. Restaurant managers and workers worry about the costs from the proposed mandated wage increase.

By an overwhelming 75 to 11 percent margin, Michigan voters believe smaller, locally owned and family owned businesses will struggle more under a proposed minimum wage increase than would larger businesses.

The findings are from a poll of 1,460 respondents conducted April 9 by Mitchell Research & Communications. Fourteen percent of those surveyed said they were undecided as to whether small businesses would suffer more than big businesses.

Of those surveyed, 93 percent said they were "definitely" voting this November. 

"I think the reactions measured by the poll are pretty intuitive and the results aren't surprising," said Steve Mitchell, of Mitchell Research & Communications. "My sense is that most voters understand that the larger the company, the more it is likely to be able to sustain the impact of this kind of wage increase. Voters also realize it will be the smaller companies, including what might be called the mom and pops that don't have deep pockets, who are most likely to really be hurt by this proposal."

Justin Winslow, vice president of public affairs with the Michigan Restaurant Association, said that for many smaller restaurants the issue won't be just struggling, it will be surviving.

"Those poll numbers look consistent with what we're hearing from members," Winslow said. "Our chain operations look like they'll likely close a good percentage of their smaller restaurants but still exist as restaurant groups. But a lot of independents — smaller guys, our mom and pops — are in real danger of just disappearing altogether under this proposal. They just don't have the ability to absorb such a large increase in their labor costs."

In addition to being asked what kind of restaurants, cafes and other businesses would be most at risk under the wage increase, the respondents also were asked about the proposal's impact on tipping. More than half (54 percent) of those surveyed said they would tip less if the proposal went into effect. More than one in four (26 percent) said they would tip the same if the proposal passed and 18 percent said they would tip more. The remaining 2 percent were undecided.

"It is clear that a lot of people are aware that waiters and waitresses don't earn a large per hour wage and that's why, as customers, they are willing to give larger tips, whether it's 10 percent, 15 percent or more," Mitchell said. "What this poll shows is that if they know a particular employee is making a higher wage, they'll be less willing to tip them as much."

Under a proposed ballot measure for November, Michigan's minimum wage would jump from the current $7.40 an hour to $10.10 an hour. Tipped workers, such as wait staff and bartenders, currently have a base wage of $2.65 an hour, provided their tips take them over the minimum wage. If not, their employer has to make up the difference. The proposed ballot measure would eliminate this distinction and mandate that tipped workers receive a minimum wage of $10.10 an hour, a 280 percent increase that would be phased in over a period of years.

"The minimum wage hike proposal is good politics but bad policy," said F. Vincent Vernuccio, director of labor policy with the Mackinac Center for Public Policy. "But what makes these poll results interesting is that instead of asking the feel good question 'should workers get a raise' it shows that when presented with basic, straightforward questions about effects of the initiative, a solid majority of voters see its negative effects and can figure out who will be hurt by it the most. While on the surface, voting for a wage hike might feel good and may help some politicians, the real world impact will be harmful to the very people the proposal purports to help."

Those surveyed for the poll identified themselves as follows: 38 percent said they were Democratic voters; 36 percent said they were Republican voters; and 19 percent said they were Independents.

Four percent of them identified themselves as being from Detroit; 12 percent from Wayne County outside of Detroit; 12 percent from Oakland County; 9 percent from Macomb County; 12 percent from the Flint, Saginaw, Bay City and the Thumb area; 19 percent from Monroe, Washtenaw, Ingham and Jackson counties; 22 percent from West Michigan; and 11 percent from Northern Michigan and the U.P..

Frank Houston of "Raise Michigan," the group pushing to get the minimum wage increase on the ballot, did not respond to a request for comment.

The poll was commissioned by the Mackinac Center for Public Policy and has a margin of error of +/- 2.56 percent.

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See also: 

More People On Food Stamps After Past Minimum Wage Increases

Who Is Behind the Minimum Wage Increase Drive?

Bars, Restaurants Could See 280 Percent Increase In Costs With Minimum Wage Ballot Proposal

Schauer, Other Michigan Dems Call For Higher Minimum Wage While Paying Their Interns Nothing

Debate Du Jour: Minimum Wage Takes Center Stage

St. Lawrence University economist Steven Horwitz discusses how the minimum wage was used to block immigrants from taking scarce jobs during the depression era. See more at "Raising the Minimum Wage, Lowering Opportunity."


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