November 26, 2014

Governor signs minimum wage increase

Local representatives say increase will hurt businesses

michigan.gov
Gov. Rick Snyder approved a minimum wage increase Tuesday that will see the minimum wage in Michigan increase to $9.25 by 2018.
Posted
Poll
Do you think the minimum wage increase is a good idea?

LANSING — Gov. Rick Snyder recently signed legislation that will increase Michigan’s minimum wage to $9.25 an hour by 2018. 

Snyder signed the bill May 27 after the House voted 76-34 and the Senate voted 24-12 to send the bill to Snyder. 

Michigan’s current minimum wage is $7.40.

Senate Bill 934 will also continue to increase the minimum wage starting in 2019 with the rate of inflation or 3.5 percent, whichever is lower, according to a press release from the governor’s office. 

The bill will also raise the wage for workers who receive tips to 38 percent of the minimum wage, according to the Associated Press. 

The Legislature acted one day before a group of labor and community organizers planned to present thousands of petition signatures calling for a Michigan ballot initiative to raise the minimum wage even more — to $10.10 an hour — according to the AP. 

“I commend my partners in the Legislature for finding common ground on a bill that will help Michigan workers and protect our state’s growing economy,” Snyder said in a press release. “Michigan is the comeback state, and our goal always should be long-term success for our residents and our state as a whole.

State Rep. Bruce Rendon, R-Lake City, voted against the measure, and said while he did not like the increase, it was better than the alternative. 

“I do agree what was done was better than the alternative,” Rendon said. “The (increase to) $10.10 would have been devastating to our businesses.”

Rendon said it shouldn’t be up to the state to decide how much people are paid. 

“The employer should be setting the rate of pay, not having the government tell us,” he said. “I understand there needs to be a minimum. But we had that in place. The thing is, it could cause us to see an upturn in our unemployment.”

Rendon added that he had spoken to a number of waiters and waitresses in his district, and some of them say they may even make less money as a result of the changes.

State Rep. Joel Johnson, R-Clare, also voted against the measure, and said he too is concerned that jobs may be lost as a result of the increase.

“I’m concerned that when we artificially raise the minimum wage, that you’re causing an opportunity for a lot of lost jobs,” he said. “The issue is, generally employers pay what they can afford to keep good people. If you start artificially putting a floor on it, you’ll have a lot of young people, especially, who need jobs who will have a hard time getting jobs.”

Johnson said he thinks many businesses will pass the additional cost onto the customer. 

“To the best of their ability, businesses will raise their prices to cover this minimum wage,” he said. “The ones who cannot will end up going out of business. There will be a lot of lost jobs. Additionally, the cost of living will go up. There are a lot of people on fixed incomes who will not be able to adjust to this.”

State Rep. Greg MacMaster, R-Kewadin, also voted against the issue, and said he did so because he felt there was a lack of clear information on the push to raise it. 

“And every businessperson in my district, they don’t want a minimum wage increase,” he said. “Both of them would be devastating to businesses.”

MacMaster said he was unhappy with the push to pass the issue prior to the petition being filed for the increase to $10.10 — the increase passed the House, Senate and the governor’s desk the same day. 

“We were told if we don’t pass this bill, the ballot initiative will pass and we’ll be stuck with a higher minimum wage,” MacMaster said. “The last election, we had six initiatives. We never passed any laws in advance to derail any of those initiatives. And the public voted them all down. Why was this different?”

MacMaster called it “bad policy” for the Legislature to pass the measure with the limited information it was presented.

“If they had done further research, they would have seen it is not a good move to put this bill through,” he said. “I think it’s up to the business owner. They should decide how much, if they can afford to pay above what the current minimum wage is. It’s not the government’s responsibility to dictate how much a business pays its employees.”

“Some businesses may end up hurting to the point of folding,” MacMaster added.

All three representatives said they felt the economy in Michigan was already on the upswing, and the increase of minimum wage may slow that progress down. 

“I do believe we are on an upswing,” Johnson said. “That’s the best thing you can do for wages is to have a thriving economy. There are areas out west, the Dakotas and Wyoming, that are having oil booms right now. There’s no such thing as a minimum wage there. They’re paying well over and above minimum wage to get help. They’ve got the business to be able to do that.”

“It doesn’t happen overnight,” he continued. “You have to continue to move in that direction.”

Rendon said the unemployment rate has dropped from about 14.4 percent in 2009 to roughly half that now. 

“Some areas are slower making that turn than others, but we are going in the right direction,” he said. 

He said more than 80 percent of Michigan’s jobs are created by small businesses, and that initiatives the state has passed recently, changes in tax policy and regulation reform, are things that can help spur the economic growth. But raising the minimum wage will not do that, he said. 

“If you’re doing a good product, and if you reward your people to do that job, that’s where it should be controlled, not government telling you that you should do this or that.”

Copyright © 2014, Sunrise Publishing. Powered by: Creative Circle Advertising Solutions, Inc.