On Thursday, May 15, the Michigan Senate quickly brought up and passed Senate Bill 934 which would effectively increase the state’s minimum wage to $9.20. The wage increase would phase in over the next four years:
September 2014 – $8.15/ hour
January 2015 – $8.50/ hour
January 2016 – $8.85/ hour
January 2017 – $9.20/ hour
SB 934 would also increase the minimum wage for tipped employees from $2.65 /hour to $3.50/hour under the following timetable:
September 2014 – $3.10/ hour
January 2015 – $3.23/ hour
January 2016 – $3.36/ hour
January 2017 – $3.50/ hour
The Senate included a component that ties future increases in the minimum wage to the Detroit Consumer Price Index (CPI), meaning the minimum wage would be subject to a potential indefinite annual increase. In an attempt to soften this concern, the Senate did add a last-minute amendment that would cap any annual increase due to inflation at 4 percent, and delays an increase in the wage in any year where the unemployment rate exceeds 10 percent.
The bill was, in large part, a move to nullify a proposed ballot proposal that would have allowed Michigan voters to increase the state’s minimum wage to $10.10 per hour at the November ballot. The proposed ballot was similar to proposals at the federal level that would also increase the wage to $10.10 per hour. Should SB 934 become law, the bill would repeal the current “Minimum Wage Law” and create the “Workforce Opportunity Wage Act” thereby nullify any potential ballot vote on the old “Minimum Wage Law.” The move to include the CPI is also seen as a decision to ensure any future minimum wage increases stay off the ballot and out of the political area.
Most statewide business organizations, including the Michigan Chamber of Commerce, have opposed the bill and are urging lawmakers in the House to either strip out the automatic indexing, or kill the bill. As of late last week, the House was not certain what it would do, or what kind of time line it was looking at. However, some reports have indicated the House may act on the bill as soon as this week.
The Northern Michigan Chamber Alliance has not taken a public position on the bill or the proposed ballot proposal, but does share a number of the concerns that have been raised including raising the minimum wage to far and to fast for northern Michigan businesses to be able to handle, and tying future wage increases to the CPI.
Credit to the Michigan Chamber of Commerce, www.michamber.com, for providing much of the analysis for this article.