Michigan’s minimum wage is about to hit $15 an hour. For workers, this is the jackpot they’ve been waiting for, but not everyone is thrilled about the decision – especially people in the restaurant industry.
Michigan’s Wage Revolution
Michigan’s Supreme Court has ruled that the state’s minimum wage must be raised to $15 an hour – although let’s first take a look at some of the history leading up to the decision.
How the Minimum Wage Fight Began
Back in 2018, Michiganders voted on two big changes: raising the minimum wage and making businesses provide paid sick leave. The proposals were super popular, and organizers quickly gathered the necessary signatures to get them on the ballot.
The GOP’s Playbook
It seemed like a slam dunk for workers, who were fed up with scraping by on $9.25 an hour. But then the GOP and big business stepped in.
Legislative Maneuvering
Instead of letting these measures hit the November ballot, the GOP lawmakers scrambled to put together their own legislation.
Is This Smart Politics?
They knew the measures were likely to pass and wanted to stop them in their tracks, so they introduced the Improved Workforce Opportunity Wage Act and the Earned Sick Time Act – which was their way of dealing with the proposals without letting voters have a say.
The “Adopt and Amend” Strategy
This was called “adopt and amend,” and at the time experts claimed it was a sneaky way to undermine the will of the people.
Gutting The New Protections
Fast forward to the aftermath of the 2018 elections, and those same lawmakers didn’t waste any time gutting the new laws.
The Snyder Years
They cut the paid sick leave in half, made it so small businesses didn’t have to offer any paid sick days at all, and dragged out the timeline for raising the minimum wage from 2022 to 2030. Former Governor Rick Snyder signed off on these changes, leaving workers disappointed.
The Supreme Court Strikes Back
But now, the Michigan Supreme Court has officially ruled that the “adopt and amend” tactic was unconstitutional. This ruling means that the state has to go back to the original plan, so starting February 2025, Michigan’s minimum wage is set to get a serious bump.
In 2025 Michigan Workers Will See Their Pay Rise
For minimum wage workers, this is a huge win. Right now their wages are $10.33 an hour, but it is set to jump by at least $2 next year, pushing it up to around $12.50. And by 2028, it should hit $15 an hour, with adjustments for inflation.
Tipped Workers’ Boost
Tipped workers, who’ve been scraping by on just $3.93 an hour, will see their pay bump up to about $6 next year, with plans to match the standard minimum wage over the next five years.
What the Wage Hike Means for Workers
This is supposed to help them get a more predictable income rather than relying on tips, which can be pretty hit-or-miss.
The Price of Higher Wages
While workers are excited about these changes, the restaurant industry is having a meltdown.
Will Diners Be Deterred?
Restaurant owners are warning that the higher wages will mean pricier menu items, which could drive away customers.
Small Restaurants at Risk
Large chains might handle the wage hike just fine, but restaurant owners are especially worried about small, independent restaurants that might not survive the price hikes.
Price Increases and Restaurant Closures
According to a recent survey by the Michigan Restaurant and Lodging Association, “the recognized leader of Michigan’s hospitality industry,” 94% of restaurant operators plan to raise prices by 25%, and nearly 20% of full-service restaurants could close down because of the increased costs.
The Potential Fallout of Wage Hikes
Justin Winslow, the head of the Michigan Restaurant and Lodging Association, is sounding the alarm. He called the Supreme Court’s decision “tone-deaf” in a statement and claimed it could wipe out up to 60,000 restaurant jobs.
What’s Next for Workers and Restaurants
With the new laws set to kick in early next year, everyone’s bracing for the impact. Workers are ready for their raises – after all, they’ve been waiting long enough – but the restaurant scene is bracing for a rough ride.
A Win for Workers or a Business Disaster?
The Supreme Court’s decision is good for workers, but the fight is far from over, as the state has to figure out how to keep pay fair without destroying the economy. We’ll have to wait to see if this decision ends up being a game-changer for workers or a nightmare for businesses.
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Featured Image Credit: Shutterstock / Marian Weyo.
The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
