The business community response to Wednesday’s State of the State address ranged from positive on Michigan Reconnect, to mixed on bonding and overall concern about overtime rules that haven’t been released yet.
Friends of organized labor, however, were seemingly unanimous in their support.
In her speech, Gov. Gretchen Whitmer again raised the issue of hiking the level at which mandatory overtime must be provided. In October, she announced she’d use the administrative rules process to expand the number of workers eligible for overtime pay.
“We don’t support it because we don’t want Michigan to be an outlier,” said Charlie Owens, state director of the National Federation of Independent Businesses (NFIB).
Under federal law, employees must be paid overtime if they work more than 40 hours a week and make less than $35,000 a year. If an employee is classified as “management” and therefore exempt, their employer doesn’t have to pay them overtime and may provide for comp time or a more flexible schedule.
According to Brian Calley, president of the Small Business Association of Michigan, it’s not accurate to say all people making less than $35,000 don’t get overtime.
“What she’s proposing is making Michigan one of the highest mandatory overtime states in the union,” Calley said. “There’s not really a justification behind that. If you’re in a management position and the duties test applies, then you’re salaried. Most of the time they get extra flexibility with that.”
In her October announcement, press materials suggested the rule she’s seeking from the Department of Labor and Economic Opportunity would benefit 200,000 Michiganders. Based on that number, the “salary level” of any final rule could be $55,000 a year or higher – or $20,000 above what the federal rule is now.
AFL-CIO President Ron Bieber, however, said the governor’s action will result in 200,000 more people being eligible for overtime pay this year. He said his members are “grateful” for Whitmer’s “dedication to helping those who need it most.”
“Far too many hardworking mothers are forced to spend long hours away from their families and struggle to make ends meet,” said Mothering Justice National Executive Director Danielle Atkinson. “As the governor and her team work through the details of the new overtime rule, I encourage them to set a wage threshold that will maximize the number of families lifted out of poverty.”
On Whitmer’s call to restart Michigan Reconnect, Wendy Block, vice president of business advocacy and member engagement of the Michigan Chamber said her organization also sees passage as “one of our priorities.”
First introduced in 2019, Michigan Reconnect is modeled after a bipartisan program in Tennessee that provides a tuition-free pathway for those 25 and older to get a certificate or associates degree in an “in-demand industry.”
Gilda Jacobs, president of the Michigan League for Public Policy, said Michigan’s unemployment rate has gone down dramatically in recent years, but poverty rates have not and that’s because the economy is tied to workers having degrees or trade certificates.
Her group’s research shows that this is particularly true in rural and Northern Michigan, which she hopes will spur legislators there to recognize “this growing problem” and work with the governor to address it.
“It’s a Catch-22. Michigan’s older workers need to go back to school to better prepare for the new job market and earn more money, but the costs continues to be a huge barrier,” Jacobs said.
Business and labor are tending to agree on the point.
“Education at every stage of life is important and she continues to show that with the tuition-free Reconnect Program that will help adults enroll in community college programs that will help them find careers,” said David Hecker, president of AFT Michigan.
Rep. Sarah Anthony (D-Lansing) said to remain competitive in the 21st century economy, programs like Michigan Reconnect “are absolutely vital.”
John Walsh, the new president of the Michigan Manufacturers Association (MMA), also applauded the governor’s support for Reconnect as something the MMA supports.
Owens agreed that filling jobs with qualified workers continues to be a major concern for small business. But Owens cautioned that the key words are “jobs in demand.”
“Proposals that seek to throw more money at the same institutions responsible for the skills shortfall in the first place without accountability or reliable measures for success are not going to work,” said Owens.
On expanding access to day care, Block noted the issue is one of concern to employers as well, so the Chamber looks forward to learning more. Calley noted SBAM is working with a number of business groups to help expand childcare access to help more workers enter the employment market.
Whitmer’s attention to affordable childcare was the first item AFSCME Council 25 President Lawrence A. Roehrig mentioned in his response to the speech. He said her attention to the issues of childcare, quality public education and prescription drugs shows “she continues to talk about kitchen table issues.”
Jacobs said the “sticker shock” over today’s childcare costs is something her group hears about “over and over again.”
“The expense of childcare is debilitating for many families, and in a lot of cases is more than parents can earn,” she said. “Childcare is a key policy solution in a two-generation approach that helps parents and kids.”