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Minimum wage compromise approved by lawmakers, signed by Gov. Snyder

May 28, 2014

Lawmakers in Lansing yesterday approved, and Gov. Snyder signed, a compromise, bipartisan measure that boosts the state minimum wage to $8.15 on Sept. 1 and then gradually increases it.

Here is the schedule of the new minimum hourly wage:

  • Beginning September 1, 2014, $8.15
  • Beginning January 1, 2016, $8.50
  • Beginning January 1, 2017, $8.90
  • Beginning January 1, 2018, $9.25

The legislation specifies that every January beginning in January 2019, the state treasurer shall adjust the minimum wage by an amount determined by the state treasurer at the end of the preceding calendar year to reflect the average annual percentage change in the consumer price index for the most recent five-year period for which data are available. As used in this subsection, “consumer price index” means the most comprehensive index of consumer prices available for the Midwest region from the Bureau of Labor Statistics of the U.S. Department of Labor. The Wage and Hour Division of the Department of Licensing and Regulatory Affairs shall post the adjusted minimum wage on its website by February 1 of the year it is calculated, and the adjusted rate is effective beginning April 1 of that year. An annual increase shall not exceed 3.5 percent.

The measure also increases the wage for workers who get tips to 38 percent of the minimum wage, from $2.65 currently, to $3.52.

SBAM staff and leaders closely monitored the negotiation process and weighed in repeatedly with our strong policy in opposition to any minimum wage hike. Most recently, SBAM past chair David Rhoa of Lake Michigan Mailers testified before the House Government Operations Committee and said that indexing the minimum wage to inflation is “unsustainable for our state’s small-business owners.”

SBAM fought hard to block any minimum wage increase. But complicating our efforts was an ongoing petition drive (Raise Michigan) that sought to put a $10.10 minimum wage on the November ballot. Yesterday’s legislative action, while not ideal, at least avoids the most serious economic fallout and job loss guaranteed to occur if the Raise Michigan ballot proposal had been enacted. It appears today that the legislature’s action now renders the petition drive moot and avoids a costly and divisive fight leading up to this fall’s elections.

Recognizing that government sets the state minimum wage, SBAM has sought that the wage be set in a way that, at the very least, is economically rational. Compared to the minimum wage ballot petition, yesterday’s legislative action is the lesser of two evils.

For further information contact SBAM’s Vice President Government Relations Tony Stamas or Grassroots Coordinator & Policy Advisor Mike Marzano at (800) 362-5461.

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