In the upcoming year, Michigan will be increasing the minimum wage. Outlined in the 2018 Improved Workforce Opportunity Wage Act, the minimum wage is to rise to $9.87/hour. Additionally, the tipped minimum wage will rise to $3.75, and the rate for minors will rise to $8.39.
According to the Michigan Legislature, “The 2018 Improved Wage Workforce Opportunity Wage Act was created to fix minimum wage for employees; prohibit wage discrimination; provide for a wage deviation board and provide for the administration and enforcement of the act.”
“The inflation we have now makes it even more important to raise the minimum wage. This ensures that people who make the minimum wage can better afford to live and be able to get by,” said Matt Hinkel, Economics Faculty Candidate.
Currently, the annual inflation rate stands at 7.7% for the United States. Though this rate has decreased by 0.5% since October, the price increase caused by the high inflation rate has caused strain on Michigan families.
In Michigan, the consumer price index has risen to 6.6% from a year ago. This significant jump has caused numerous families to have to cut out necessities to afford to survive. The 22 cents wage rise for many families will not help them pay bills as the cost of living drastically rises.
There have been conversations about possibly raising the minimum wage to $12; however, the possibility of this event occurring has been delayed in court.
In July, a court ruling of hiking Michigan’s minimum wage to $12 was stopped by Court of Claims judge Douglas Shapiro. This was done after the judge considered that businesses would need time to adapt to the new law. The case is still under appeal, and the decisions on if the ruling will be passed will be delayed until Feb. 2023.
Raising the minimum wage is a complex and highly debated issue. Many people believe that with the goal of fixing the problem of poverty in mind, altering the minimum wage does little in the long-term.
“Increasing the minimum wage will never be viable without a long-term plan. By increasing wages every year, the government… will find themselves in a negative… loop of poverty, wage increases, inflation… and so on,” said Austin DeRocher (’24).
“I believe the idea to raise the minimum wage is not a good one because it is counterintuitive. When the minimum wage rises, the market catches up through increasing prices. Therefore, the whole concept of raising the minimum wage does nothing to help lift people out of poverty,” said Andrew Smith (’23).
According to World Population Review, an online data collection site, the livable hourly wage for Michigan is $16.36. This statistic calculates basic needs such as food, housing, transportation, insurance, utilities, childcare, taxes and inflation.
“Michigan’s current minimum wage of $9.87 is not considered a living wage, no matter what definition you look at. Even for one working adult with no children, a person living in Gratiot County would need to make about $15 an hour to make a living wage,” said Hinkel.
Over the next few years, Michigan plans to continue the trend of slowly increasing the state minimum wage. Though the minimum wage will not reach the livable wage, the increase in wages may bring positive implications.
Overall, it will take time to see how raising the minimum wage will affect Michigan’s economy and society.
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