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Proposed bill will raise Mich. minimum wage by 2016

April 22, 2013

State lawmakers introduced a bill last week to raise Michigan’s minimum wage from $7.40 to $10 by 2016.

The legislation amending the minimum wage law of 1964 arrived two months after President Barack Obama proposed increasing the federal minimum wage from $7.25 to $9 during his State of the Union address in February.

Under state lawmakers’ proposed legislation, the minimum wage would rise in steady increments, although with a Republican-controlled Michigan Legislature, one of the bill sponsors, state Rep. Rashida Tlaib, D-Detroit, said she isn’t sure the bill will survive.

The increases would occur at the following times:
$7.90 by Jan. 1, 2014
$8.40 by July 1, 2014
$9 by Jan. 1, 2015
$9.50 by July 1, 2015
$10 by Jan. 1, 2016

Michigan’s minimum wage has not been raised since 2008’s rate of $7.40.

Economics professor Todd Elder said the increase could cause prices to rise for products and services from businesses utilizing minimum wage labor.

“That would hurt me ‘cause I like Taco Bell,” he said. “If you can imagine the price of a chili burrito going to $2.50 — that’s one of the big costs of it.”

Tlaib said she and other lawmakers devised the plan for increments with small businesses in mind. The increments would give them a chance to adjust to each pay raise, she said.

“They know when they put more money in their (employees’) pockets that they will turn that money back into their stores and local businesses,” she said. “Folks that earn more money will go and invest in the local economy.”

But Elder said the increase could come at an employee’s expense.

“There are some people that are currently working for minimum wage because that’s what employers think they are worth,” he said. “If it increases by a dollar an hour, and those employers don’t feel they’re worth (the raise), they fire them.”

Elder said most workers who would be affected are teenagers because the majority of people older than 18 years old earn more than minimum wage.

Economics junior Dillon McGough, president of the Michigan State Student Economics Association, said while lawmakers behind increasing minimum wage probably have good intentions, they could be hurting the people they are trying to help.

But for college students, it might not be too bad of a change, he said.

“The (higher) wage is definitely going to be more attractive, and it’s going to give college students more reasons to work,” he said. “I don’t think it would negatively affect college students. It would affect unskilled workers that are much older.”

After Obama proposed raising the federal minimum wage, 71 percent of Americans reported support for the increase, according to a February poll from the Pew Research Center.

Tlaib said Obama’s proposal sparked “momentum across the country” toward increasing minimum wage.

“We think it is fair and continues to help Michigan’s economy thrive,” she said.
The legislation is under discussion in the commerce committee.

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