On Tuesday, Michigan Gov. Rick Snyder (R) signed a bill that will raise the state minimum wage to $9.25 over the next four years from its current level of $7.40 and set it to grow automatically with inflation beginning in 2019. It also raises the tipped wage to 38 percent of the broader wage floor, bringing it up from $2.65 to $3.52.
The bill was passed earlier in the day by the state House and Senate, which are led by Republicans, making it the first state with Republican majorities to pass a wage increase this year. About half of the Republicans in the legislature and most Democrats voted for it.
Seven other states have increased their minimum wages this year: Delaware and West Virginia raised theirs above $8 an hour, Minnesota raised its wage to $9.50, and three states, Hawaii, Maryland, and Connecticut, set theirs at the $10.10 level being sought by Congressional Democrats and President Obama. Vermont has gone further, increasing its wage to $10.50 an hour.
Despite the passage of a higher wage in Michigan, it may not be all good news for proponents of an increase. Labor and community organizers in the state are pushing for the $10.10 level and on Wednesday, they plan to submit hundreds of thousands of signatures for a petition to put a measure on the ballot. But the bill Snyder signed into law could block that measure from appearing on the ballot “by repealing the portions of the Michigan minimum wage law that the initiative would amend, and recodifying them elsewhere in the state code,” according to a press release from the National Employment Law Project.”
Michigan Republicans may have voted to increase the minimum wage, but federal-level Republicans haven’t joined the call for a higher wage. In April, Senate Republicans blocked an increase to $10.10 an hour. Yet many of them voted for an increase under President George W. Bush.
The lack of federal action has been part of the impetus for states to take action on their own. They can also look at the experiences of other states that have raised their wages without experiencing the negative economic consequences that critics warn against. Washington, which currently has the highest state wage, topped a list for the biggest increase in small business employment last year. Job growth has also stayed at a steady 0.8 percent rate in the years since it increased its wage, above the national rate, with strong growth in restaurants and bars. An analysis of two decades’ worth of minimum wage increases at the state level found similar results: there was no clear evidence that it impacted job creation, even during times of high unemployment.
Some cities — Chicago, New York, and Seattle — are going even further, calling for a $15 minimum wage, and voters in the small town of SeaTac, Washington already approved that wage level. That’s also the level being demanded by the fast food workers who have staged widespread strikes over the past two years. Cities have also had positive experiences with higher wages: San Francisco has the highest big city wage at $10.74 an hour and had the highest small business job growth last year. It also saw employment grow by more than 5 percent in the seven years after it increased its wage while it fell in other surrounding counties.
Update:
This post has been updated with information on how the bill Snyder signed into law could block a ballot initiative for a $10.10 minimum wage.