Editorial: Proposed jump in minimum wage would hurt momentum
Supporters of raising the state’s minimum wage, which they initially wanted to be $9.50 an hour, say they will seek the increase to be $10.10 an hour by 2017. The initial increase Raise Michigan campaign was seeking would have been to begin in 2016.
The increase in the state’s minimum wage, which currently is $7.40 and 15 cents higher than the federal minimum, would be a whopping 36 percent. Even the increase to $9.50 would be an incredible increase of 28 percent. These increases would be difficult for businesses to absorb, especially small businesses – which virtually every business in Northeast Michigan is.
“This proposal gives people who work hard … a better chance to escape poverty, and allows businesses more time to adjust to the proposal,” an official with Raise Michigan said in an Associated Press story Monday.
While that may be true, it’s effect more likely would be a loss of jobs. Even large companies would have a difficult time handling that kind of increase. Small mom and pop operations likely would be forced to lay off employees. Payroll is one of the largest expenses, and by increasing it by those percentages the only option would be to trim payroll. And no one wants to see that happen.
While not all the factors that go into the cost of goods would rise, most would because they are tied to employees in some way. Imagine adding even 25 percent to your grocery bill. Can you afford that happening?
We understand it’s difficult to raise a family on minimum wage, and more people are working those jobs than anyone would hope. However, the alternative of having fewer people working is even worse.
If Raise Michigan’s proposal goes through, the only rise we would see in Michigan is its unemployment rate. Now that would kill any economic momentum the state has created.