House gives wage hike go-ahead

Published March 15, 2006

LANSING - The state House voted yesterday to raise the state's minimum wage by $1.80 an hour in October, the first increase in nine years.

The legislation now heads to Democratic Gov. Jennifer Granholm, who is expected to sign it despite opposition from business owners.

Full-time workers making the minimum wage could initially earn an extra $288 per month, or about $3,700 a year, under the measure.

It would boost the minimum wage from its current rate of $5.15 an hour to $6.95 an hour in October and $7.15 in July 2007. The minimum would rise to $7.40 an hour in July 2008.

"Today, we are doing the right thing for the working people of this state," said Rep. Andy Meisner, a Ferndale Democrat who supported the measure.

About 90,000 of Michigan's 2.9 million workers - around 3 percent - were paid at or below the minimum wage rate in 2004, state figures show. Democrats said the bill also would help hundreds of thousands of other workers earning between the current minimum wage and the proposed increase.

The House approved the bill 73-34, with more than half of the chamber's Republican majority voting against it. The GOP-controlled Senate unanimously passed the Democratic-sponsored bill last week.

The legislative action was largely prompted by a petition drive to place a minimum wage increase in the state constitution.

Labor unions gathering signatures for the measure had hoped having the proposal on the ballot would bring more Democrats to the polls in November, something Republicans wanted to avoid. It's unclear whether the petition drive will continue.

House Speaker Craig DeRoche, a Novi Republican, said he voted for the bill because it would "kill" fewer jobs than the proposed constitutional amendment, which ties future minimum wage increases to inflation.

Yesterday's vote was a setback for businesses in the hospitality industry and other opponents who said raising the minimum wage will hurt Michigan's fragile economy.

The Employment Policies Institute, a Washington-based nonprofit that has put out a number of reports criticizing efforts to raise the minimum wage, said increasing the minimum wage leads to overall job loss.

That's partly because a higher wage attracts teenagers from high-income families into the labor market, displacing low-skilled workers, according to the institute.

But House Minority Leader Dianne Byrum said she didn't think jobs would be lost, calling the job-killing claims a "fallback argument." She praised the increase.

"I don't think it sends a negative signal. I think it sends a signal that Michigan values hard work," the Onondaga Democrat said.

If the ballot measure passes, the bill passed yesterday would be pre-empted by that proposal, which proposes a $1.70 an hour increase in January. Voters backing the measure essentially would be approving a 10-cent decrease in the minimum wage after it rises by $1.80 in October.

But they also would be putting the increase into the state constitution, where it would be harder to change, and tying it to inflationary increases.

A statewide poll of 600 likely voters by released last week showed 74 percent supported raising the minimum wage to $7.15 an hour, while 24 percent opposed it and 2 percent were undecided. The poll was conducted March 5-8 by Lansing-based EPIC/MRA for WXYZ-TV and had a margin of sampling error of plus or minus 4 percentage points.

Michigan's $5.15-per-hour minimum wage is the same as the federal government's. Seventeen states and the District of Columbia have higher minimum wages.

Before voting, the House rejected an amendment proposed by Republican Rep. Bill Huizenga of Zeeland, who said workers under age 18 should make $1 below the new minimum wage. He also unsuccessfully tried to change the bill to let colleges pay student employees 85 percent of the minimum wage.

Huizenga said his amendments would have helped the working poor and addressed the concerns of small business owners who employ high school students.