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Michigan's lowest paid workers will get a small pay increase on New Year's Day

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steve carmody
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Michigan Radio

On New Year’s Day, Michigan’s lowest paid workers will start getting a little more in their pay check.

The state’s minimum wage is rising 22 cents to $9.87 an hour on Saturday.

The wage hike comes as many businesses are advertising starting salaries of $15 or more an hour, with many also offering bonuses. A worker shortage has left many low wage businesses scrambling to fill and retain workers.

It may seem like Michigan’s minimum wage is no longer needed. But some disagree.

Ronald Tracy is an economist at Oakland University. He says, in many rural parts of Michigan, the state’s minimum wage is still standard for many low skill jobs.

Tracy also warns those ‘help wanted’ signs offering wages of five and ten dollars over the minimum wage will likely disappear if Michigan’s economy begins to struggle.

“When we go into a recession, and the demand for labor goes way down, even here in southeast Michigan, those starting salaries will drop considerably,” says Tracy.

There is an effort to increase Michigan’s minimum wage.

Many who worked on a previous ballot initiative ended up feeling stymied by the Michigan legislature.

In 2018, activists collected enough signatures to put a proposal on the ballot that would have increased Michigan’s minimum wage to $12 an hour by 2022.

But legislative Republicans adopted the proposal, then amended it, to substantially slow the increase.

Activists are now launching a new campaign aimed at raising Michigan’s minimum wage to $15 by 2027.

Saru Jayaraman is with the group One Fair Wage, which advocates for a higher minimum wage and an end to a lower regular wage for workers who rely on tips.

“Neither is enough for people to live on. And with the pandemic, all of these issues became so much worse,” says Jayaraman.

Last month, a coalition of groups filed the Raise the Wage proposal with the Michigan Bureau of Elections. If the proposal is approved, the coalition can begin preparations to collect enough signatures to put the issue on the ballot.

Not surprisingly, the proposal is opposed by the Michigan Chamber of Commerce.

The chamber issued a statement, reading in part:

“The talent shortage has employers already paying increased wages above and beyond – all while facing rising inflation and supply chain chaos – just to keep the doors open. We instead need to focus on ways to help job providers recover from COVID impacts and workers overcome barriers to employment like ensuring affordable childcare, housing and transportation.”

Rich Studley is the former president/CEO of the Michigan Chamber of Commerce. He retired last month after 40 years with the chamber.

As far as wages are concerned, Studley says it’s a matter for individual businesses to find a way to be competitive.

“They have to provide wages that are comparable,” says Studley, “There will always be this push-and-pull, and tug-of-war between business and labor. But in the end, we’ll all in it together.”

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