The legislation would increase Michigan’s minimum wage from $7.40 to $9.20 an hour for regular employees and from $2.65 to $3.50 an hour for tipped employees.
If enacted, the legislation will effectively kill a ballot initiative that would allow voters to decide on raising Michigan’s minimum wage to $10.10 for all employees, tipped or not.
The ballot initiative, spearheaded by interest group Raise Michigan, has garnered more than the 250,000 signatures needed from registered voters who want the measure either approved by the legislature or placed on the November ballot.
But if the legislation is enacted, the initiative would be rendered void because it refers to Michigan’s current minimum wage law.
Danielle Atkinson, a member of Raise Michigan, said the Senate passed the bill with the intention of curbing further minimum wage hikes brought about by voters.
“We don’t believe this bill was about minimum wage, we believe it was about killing our initiative,” Atkinson said.
The bill, introduced May 8 by Senate Majority Leader Randy Richardville, R-Monroe, initially proposed to increase wages by $0.75 an hour for regular employees and $0.28 an hour for tipped employees.
But after compromises made among Democrats and Republicans, a substitute bill passed with minimum wage rates that would gradually rise every year until 2017, when it reaches $9.20.
The ballot initiative would similarly increase wages steadily until 2017, but at a higher rate to result in a $10.10 hourly wage. Each year after, the wage would rise to match inflation.
In the Senate bill, after 2017 Michigan’s minimum wage would continue to rise once per year at a rate tied to the changes in prices of goods and services, with a wage increase cap of four percent.
Don Grimes, senior research specialist in economics at the University of Michigan, said he is skeptical that raising Michigan's minimum wage is anything more than a political stunt to reign in votes for the 2014 elections.
Grimes said the beneficial aspect of the proposed legislation is that tying future minimum wage increases to the changes in price will take the wage debate out of the political realm.
Bob McCann, spokesman for Senate Minority Leader Gretchen Whitmer, D-East Lansing, said although the bill is not perfect, it is in the best interest of workers.
“In its original form, SB 934 provided a minimal, one-time increase to the state’s minimum wage that was more about pandering and political maneuvering than lifting full-time workers out of poverty,” Whitmer said in a statement. “Michigan’s minimum wage workers deserve solutions from their elected officials, not political games, and I’m pleased we were able to deliver that to them today. This bill is substantially better than the bill introduced and provides a meaningful raise to countless workers that will continue into the future, and I am proud of that.”
McCann said he is optimistic the substitute bill will pass the House without any changes and go onto Gov. Rick Snyder for issuance.