Minimum wage needs to be fair to employees, businesses alike
The start of the year brought an increase in the minimum wage to approximately 101,000 workers in Michigan. The wage increased 40 cents an hour, from $8.50 to $8.90.
Twenty other states also saw the minimum wage increase Jan. 1. The highest minimum wage nationally is in Massachusetts and Washington, where it is $11 an hour.
This year’s increase stems from Michigan legislation passed in 2014 to phase in minimum wage increases through 2018. At the time, the minimum wage was $7.40 an hour in the state. Next year’s increase will raise the minimum wage to $9.25.
When he signed the 2014 legislation into law, Gov. Rick Snyder said it was “good for Michigan” — which we would not argue with. However, we would be remiss not to also point out that so often with such measures, the increases sometimes also come with some economic belt tightening on the part of employers.
A story in the Boston Globe Monday, for instance, dealt with that state’s increase (again, tied with Washington as the highest in the U.S.). In that story a small business owner described how she had to reduce her staff from 50 to 20 over the past two years to counteract the increases in that state’s minimum wage.
Two years ago the Congressional Budget Office researched the issue in anticipation of Congress considering a rise in the national minimum wage. At that time it found that raising the federal minimum wage from $7.25 to $10.10 would decrease new jobs by 500,000.
As with most things, the key to satisfaction for employees and employers is to find a fair plateau where both groups benefit and consumers aren’t adversely impacted by higher prices for services and goods.
The ultimate goal here was, still is, and will be into the future, keeping Michigan residents employed at a fair wage.