Businesses to Michigan GOP: Slow minimum wage increase while you’re in power

• Business groups want minimum wage changes during the lame duck legislative session
• A judge in July ordered the state to increase minimum wage to $12 per hour, which could take effect in February
• Whitmer says she is open to mitigating the impact on businesses

LANSING — Business groups are pressuring lawmakers to reel in a minimum wage hike before Republicans lose control of the full Legislature for the first time in decades at year’s end.

The push comes as time runs out to make legislative changes before a court ruling takes effect on Feb. 20 to boost the minimum wage to $12 an hour from $9.87 an hour and require some previously exempt small businesses to offer paid sick leave.

The increase stems from a July ruling by Court of Claims Judge Douglas Shapiro that the state’s GOP-led Legislature violated the state constitution by quickly adopting and weakening two ballot initiatives on minimum wage and paid sick leave in 2018.

Related:

• Judge delays Michigan minimum wage increase until at least February
• As Democrats take charge in Lansing, some business leaders sweat their agenda

Shapiro ordered the lawmakers to restore both laws to their original form. A hearing on an appeal is Dec. 13, but legislators can change the law before then during a “lame duck” session before Democrats take control of the House and Senate for the first time since the 1980s.

The minimum wage increase also would raise wages for tipped workers by 2024, allowing them to make at least $12 per hour, up from the current industry minimum of $3.75 per hour. 

The federal minimum wage is $7.25. Michigan’s current minimum wage is higher than nearby states such as Ohio ($9.30 but increasing to $10.10 an hour in January) and Indiana ($7.25) but less than Illinois ($12.)  

Groups including the Michigan Restaurant and Lodging Association, which represents the $40 billion hospitality industry, say a quick minimum wage increase could decimate small restaurants still recovering from the pandemic.

“We are making a plea to the Legislature to do something,” said John Sellek, a spokesperson for Save Michigan Restaurants, a group connected to the association that hosted an event Tuesday near the Capitol.

But the issue might get punted to next year, and Democrats who will control the Legislature traditionally have championed higher minimum wages.

Democratic Gov. Gretchen Whitmer told Bridge Michigan recently that she supports the minimum wage increase, but said “there are small businesses that are going to struggle with this.”

“The Legislature tried to subvert the will of the people — they screwed around,” she said. “And now business could be paying the price.” 

She added that she would consider legislation from outgoing lawmakers, but if “this Republican Legislature decides they’re just going to go home and not come back and have meaningful negotiations, then that’s on them.”

Outgoing House Speaker Jason Wentworth, R-Clare, has said efforts to ease the transition for businesses “absolutely” could come up before the end of the year.

On Tuesday though, he told reporters Republicans and Whitmer are having trouble reaching consensus on non-controversial bills, noting that “anything that has any little bit of controversy, I can’t imagine gets anywhere near success.”

“We can’t even come to the table on 30 bills that are non-controversial,” Wentworth said, noting that the House is willing to hold more days of legislative session if they get the sense the governor’s office is willing to play ball. 

Wendy Block, vice president of business advocacy and member engagement at the Michigan Chamber of Commerce, told Bridge on Tuesday the group is looking forward to seeing the legal dispute over minimum wage “work itself out before asking the Legislature to take action.” However, she said, the chamber is “preparing for all scenarios.”

If Shapiro’s decision stands, Block said the chamber is hoping for legislation to “soften the impact” of an overnight wage spike by slowing the rate of increase.

During a Tuesday event held by Save Michigan Restaurants, two restaurant servers told reporters they fear raising the minimum wage and phasing out the tipped wage system for tipped workers would give customers less incentives to tip and would devastate restaurants.

“If (people) knew I was making $15 an hour like they were at Target, then they would not be tipping me,” said Gabbie Huhn, a recent graduate from Michigan State University who works as a bartender in East Lansing.