Michigan Legislature Alters the Minimum Wage

Ferrier, Valerie - 300dpi
Valerie Ferrier

In the past few years, in order to keep pace with their relative costs of living, states and localities across the country have increased their minimum wage in excess of the federal rate, which has remained unchanged at $7.25 per hour for the past decade. Last year, the One Fair Wage campaign, which promotes an increase in the minimum wage, particularly for restaurant workers who depend on tips for most of their income, supported a citizen-driven ballot measure that would have increased Michigan’s minimum wage to $12 per hour by 2022. The state’s minimum wage, as of 2018, was $9.25 per hour.

In September, 2018, hundreds of thousands of Michigan citizens voted to place the measure on the ballot, to be voted on in the General Election in November. The outgoing state legislature, however, had other ideas. Specifically in order to keep the initiative off the ballot, and thus to prevent a voter referendum on the minimum wage, the legislature passed the measure as law in September. A quirk of Michigan law meant that by doing so, the legislature could amend the law in the lame duck session with only a simple majority. Had the law instead been adopted by a vote of the state’s citizens, any legislative changes would have required a two-thirds vote of the legislature.

In the waning days of 2018, the legislature passed Senate Bill 1171 amending the original minimum wage legislation. Instead of the $10 minimum wage advocated by voters to go into effect in 2019, the legislature raised it by only $0.20, to $9.45. The twenty cent increase to the minimum wage will not go into effect until late March, 2019.

The amendments further delayed the eventual increase to $12 by eight years. Now, employees will have to wait until 2030. Moreover, the legislature excluded tipped workers from the increases to the minimum wage, which had been one of the original objectives of those supporting the ballot measure. The tipped wage in Michigan is $3.52 per hour. Outgoing Gov. Rick Snyder signed the amended bill into law last month.

The original ballot measure also sought to link future increases in the minimum wage to inflation once the $12 rate was reached, but the amended law removed that provision. House fiscal analysts projected that, under the citizen-initiated version with increases tied to inflation, minimum wage workers would have earned $14.16 by 2030. Analysts further projected that prolonging the amount of time to reach a $12 minimum wage will increase the number of citizens eligible for Medicaid and other state financial assistance.

The constitutionality of the legislature’s action was approved after the fact in an opinion by the state’s outgoing Attorney General. That opinion was contrary to a previous A.G. opinion issued more than a half century ago. But the lame duck amendments are not sitting well with many in the state. Protesters descended upon the state Capitol last month. And One Fair Wage has indicated its intention to file a lawsuit challenging the amendments.

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