Fed up with waiting for the federal government to act, Democrats in the state Legislature are attempting to raise the minimum wage from the current $5.15 per hour to $7.15 per hour over the next two years. They are also proposing to have the state minimum wage indexed to inflation, so that it would rise every year to offset the rising cost of living. If their proposal is enacted, Michigan will have the third highest minimum wage in the nation. The proposed wage increase is long overdue and is a valuable idea that should be incorporated into a larger economic program to revitalize the state’s economy.
This proposed idea is desperately needed given that the federal minimum wage has been static since 1997. This is the second longest period when the minimum wage has been unchanged. With the U. S. House of Representatives and Senate under Republican control, the federal minimum wage is not likely to be increased anytime soon, as evidenced by Congress’s past refusals to raise it. Accordingly, there is a need for the state government to remedy the situation. Due to inflation, the purchasing power of a person earning the minimum wage is 16 percent lower today than what it was in 1997; $5.15 has the same purchasing power today as $4.33 did in 1997. This proposal to raise the minimum wage is not so much about drastically improving the purchasing power of the poor as it is about maintaining the status quo. It is merely an attempt to give back to the people what they have lost over the past eight years.
The proposal would also eliminate the need for constant legislative action to increase the minimum wage by indexing the minimum wage to inflation. This would allow legislators to focus and work on other issues, and more importantly, protect the working class from inaction on the part of governments. If there is one lesson to be learned from the past eight years, it is that these safeguards are desperately needed.
Approximately 16 percent of Michigan’s hourly workers stand to benefit from this proposal, making this a critical issue. Although any raise in the minimum wage may result in a slightly higher level of unemployment, hourly workers stand to gain a lot more than they would lose. Even the theoretical rise in the unemployment rate might not be as significant as some predict. Most jobs that earn minimum wage are within the service sector; even though minimum wage may rise, most service-sector jobs cannot be eliminated or outsourced.
Though this initiative to increase the state minimum wage is sound, it needs to be part of a broader plan to improve Michigan’s economic situation — simply paying workers more will not fix the state’s economy. Legislators need to work on improving the quality of the education system in Michigan so workers are able to get better jobs and fewer people have to rely on the minimum wage.