EDITORIAL: Michigan’s Minimum Wage Hike is Penny Wise & Pound Foolish
LANSING REPUBLICANS DODGED what their leaders believe was a bullet in raising the state’s minimum wage from the current $7.40 to $9.25 by 2018 and indexing it to inflation thereafter. The minimum wage for tipped employees rose from $2.65 to $3.52. Raise Michigan, a coalition of labor and community groups with support from the Democratic Party, had gathered hundreds of thousands of petition signatures to place the measure on the November ballot. Raise Michigan supporters intended to ask Michigan voters to decide whether the minimum wage should be raised to $10.10. Republicans, battling both a higher minimum wage and a higher Democratic voter turnout, passed a law that raised the minimum wage, but also repealed and replaced the old minimum-wage statute—all part of a gambit to invalidate the ballot measure.
Tea Partiers are fit to be tied over the hike in the state’s minimum wage, but are they angry enough to risk Republican control of the legislature in November with an attack from the right on GOP incumbents? Probably not.
The good news is that the minimum wage in Michigan is rising. The bad news is that the minimum wage in Michigan is still at poverty-level. A study from Center for American Progress showed that raising minimum wage to $10.10 would help up to 128,000 Michigan families get off of food stamp benefits, saving $205 million in government spending.
The bad news is that, in Michigan, $9.25 is a poverty wage for an adult worker with one child; it is equivalent to an annual gross salary of $20,800 per year and an adult with a child, in order to stay above the poverty line, needs $40,449 annually or an hourly rate of $19.45. The minimum wage, had it been implemented immediately, would have put individual workers just above the poverty line. Individuals need $19,738 annually. However, that rate won’t kick in until 2018, fours year from now. Between 2010 and 2014, according to the U.S. Department of Labor, inflation rose 9.7 percent.
This means that by the time Michigan’s minimum wage reaches $9.25, it will not keep any worker in the state above the poverty line, assuming inflation rises at the same rates it has since 2010. More than 556,000 children under the age of 17—close to one-quarter of Michigan children—live in poverty. More than 36 percent of children under the age of five are eligible for the Supplemental Nutrition Assistance Program, formerly known as food stamps.
This is up from 2005 when roughly 454,000 children under the age of 17 lived in poverty, and only about 24 percent of children under five were eligible for SNAP, according to a report published by the non-partisan group Kids Count. Participation in free and reduced school lunch programs also increased since 2005, with about 48 percent of Michigan students eligible for the programs, according to Kids Count.
“Full-time earnings at a minimum wage job in Michigan leaves a two-parent family of four with an income almost $8,000 below the federal poverty level,” the report states.
The minimum wage hike will give teens in summer jobs a boost, those who can find summer jobs, that is. The unemployment rate for Michigan teens tops 25 percent. College-going students will be able to earn more money, as well, to help pay tuition costs that have risen 200 percent at some state schools since 1990. The human and financial costs of poverty in our state are staggering, and we believe the Michigan GOP’s latest political gambit has been penny wise and pound foolish. Yet again.