The Building Tradesman Newspaper

Friday, February 28, 2014

Proposals to raise minimum wage spins wheels in Michigan, D.C.

By The Building Tradesman

A minimum wage hike might happen in Michigan, it might happen in Congress, and it might not happen at all.

In Michigan, an EPIC-MRA poll released Feb. 13 showed 60-36 percent support for a minimum wage hike of $10 per hour. Michigan’s current minimum wage is $7.40 per hour.

In our state, a group called “Raise Michigan” was pushing to bump up the state’s minimum wage to $9.50 an hour, but since the survey came out, they’re pushing for a $10.10 per hour minimum wage by 2017.

Their strategy: Raise Michigan has until May 28 to collect 258,000 valid signatures in favor of a wage hike after the Board of State Canvassers on Feb. 19 approved their petition. The petition is tied into a legislative effort: if they collect the required signatures, the proposed minimum wage hike will go to the Legislature and then to the voters if the Legislature doesn’t approve it within 40 days.

“Raising the minimum wage would help bring thousands of families out of poverty, bring a much-needed boost to our local economies and help people create a better future for workers and their families,” said Lonnie Scott, executive director of Progress Michigan. “Raising the minimum wage is the right thing to do and citizens across the state are jumping onboard with the idea. We’re happy to see that a coalition of concerned citizens and organizations have come together to fight for this important issue.”

The concept of raising the minimum wage is highly doubtful in the Michigan Legislature given the state’s conservative leadership in Lansing. “It hasn’t been a burning issue because Michigan is already above the federal minimum,” said Gov. Snyder’s spokesman, Dave Murray.

During his State of the State address in January, President Obama moved the momentum meter a bit by encouraging Congress to hike the federal minimum wage, which is currently $7.25 an hour. (States are allowed to set minimum wages higher than the federal government’s minimum wage, but not lower). “Even with the tax relief we’ve put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong,” he said in his speech.

Enthusiasm for hiking the federal minimum wage was dampened a bit on Feb. 18, when the nonpartisan Congressional Budget Office (CBO) reported that the proposed wage hike would boost earnings for about 16.5 million low-wage workers, but would also bring about the loss of about 500,000 jobs. Republicans, who have little appetite for raising the wage, said the report backed up their arguments, while Democrats pointed to numerous other studies that show minimum wage hikes do not bring about more unemployment.

One of those is the Center for American Progress Action Fund, which said last week: “Critics of the minimum wage (increase) are trotting out the same tired arguments that doing so will harm the national economy and increase unemployment. A review of the most recent evidence makes clear, however, that raising the minimum wage does not result in inevitable job losses—even during periods of high unemployment—and may in fact be good for the economy.”

And Heidi Shierholz and David Cooper of the labor-backed Economic Policy Institute responded to the CBO report as follows: “It’s important to note that the economists at CBO didn’t do their own analysis on the employment impact of increasing the minimum wage—they looked at the academic literature on this subject and arrived at a conclusion about what it showed. In other words, they used exactly the same information that the more than 600 economists who signed a letter in support of increasing the minimum wage to $10.10 were looking at when they concluded that increasing the minimum wage will raise the wages of low-wage workers with little or no negative effect on employment.”