Explainer: Michigan’s minimum wage is going up next year. But will it ever actually hit $15?

Michiganders earning the minimum wage will see a small raise next year, but a lawsuit pending in the Michigan Supreme Court could let voters push the rate even higher. 

MICHIGAN—An increase to the state’s minimum wage will boost hourly wages by from $10.10 to $10.33 for the estimated 52,000 Michiganders who earn minimum wage beginning in January.

But if an advocacy group has its way in court or Michigan voters are able to approve a ballot initiative at the polls next year, that minimum rate could be set for a much more significant jump.

Here’s the deal:

Under state law, Michigan’s minimum wage is required to climb every year when the economy is doing well—specifically when the state’s unemployment rate manages to stay at or below 8.5%.

Because Michigan is tracking one of the lowest unemployment rates in decades under Gov. Gretchen Whitmer’s administration, the minimum wage is going up to $10.33 on Jan. 1, 2024.

For tipped employees, the rate will jump to $3.93 an hour. 

For 16- and 17-year-olds, it’ll be set at $8.78.

Although only about 1% of Michigan’s 4.4 million workers (or about 52,000 people) earned the state minimum wage in January, research shows the threshold set by state government often creates a broader ripple effect among other employers, boosting wages across the board. 

In recent years, wages for entry-level jobs have naturally increased due to worker shortages, with many businesses now paying $1 to $4 more an hour to find staff, Bridge Michigan reports. 

Is the minimum wage a living wage?

Not really. 

Recent research from the National Low Income Housing Coalition shows that a Michigander earning this year’s minimum wage would need to work at least 68 hours per week to afford a modest, one-bedroom rental at a fair-market rate. Ramping up the hourly wage by less than a quarter next year isn’t likely to afford any Michiganders the chance to quit their second job.

What about a $15 minimum wage?

Advocates for higher wages have long viewed $15-17 an hour as the sweet spot for lifting up tens of millions of workers and reversing decades of pay inequality—particularly for low-wage workers who often struggle to cover the basics, like food and rent, on less than $35,000 a year.

According to the National Employment Law Project, about 60% of workers whose total family income is below the poverty line would see a pay increase if the minimum wage is increased.  

While many businesses across Michigan have voluntarily offered hourly wages of $15 or more to retain employees and keep their doors open, they have no legal obligation to do so—unlike those in some states that have tweaked their wage schedules to allow for bigger increases.

Didn’t I sign a petition to raise the wage? 

Possibly.

More than 280,000 Michiganders signed a petition in 2018 to raise the minimum wage to $12 an hour by 2022, followed by annual inflation adjustments, and to eliminate the lower tipped wage. That was enough signatures for the initiative to qualify for the November 2018 ballot. 

But in Michigan, there’s an odd little nuance in the state Constitution that allows state lawmakers to get the first crack at any citizen-initiated changes to state laws before they reach voters, and to enact them into law with a simple majority vote of the Legislature.

That’s sort of what happened here. 

Two months after voting to adopt the law, Republican lawmakers quickly tore it apart—ultimately delaying those increases until 2030. As a result of this “adopt and amend” strategy, the minimum wage has kept mostly stagnant, climbing by less than a dollar from $9.25 in 2018. 

Following years of legal challenges, the Michigan Supreme Court will have the final say on whether the Legislature violated the state Constitution and thwarted the will of the people by watering down the wage increases. Arguments are set to be heard in the case next month.

If the challenge is successful, the legislature’s changes could be voided, and the state’s minimum wage could see an immediate boost to $12 an hour as outlined in the initial petition. 

So, it’s just a waiting game?

Yep. 

While the minimum wage proposal is considered by the state Supreme Court, it’s out of voters’ hands. But they may eventually have a say (again) in the matter during next year’s election.

Another proposed ballot initiative that garnered more than 360,000 signatures from Michigan residents over the last year aims to finally bring the question to the polls in 2024, which would allow voters to decide whether or not to increase the minimum wage to $15 by 2025. 

The Michigan Board of State Canvassers voted against certifying the ballot initiative last month, but the coalition behind the plan—Raise the Wage Michigan—filed a lawsuit with the Michigan Supreme Court this month that seeks to have the issue placed on the ballot next November.

The court could step in this year and order the measure to go before voters—just like it did when the Board of State Canvassers tried to block a reproductive rights measure last year.

In a statement to Michigan Advance, Raise the Wage officials said the board’s failure to advance the proposal to the polls represents a “direct obstruction to the democratic process” from the restaurant industry, and a “partisan attempt to destroy democracy” led by Republicans.

“We look forward to winning the battle in the Michigan Supreme Court and winning a higher minimum wage on the ballot for workers,” said One Fair Wage President Saru Jayaraman. 

If the ballot measure goes before voters and is approved, it would hike the minimum wage by $1 every year until it hits $15 an hour, allowing the rate to continue climbing regardless of unemployment rates. It would also eliminate the lower rate for tipped wages by 2028.

Couldn’t lawmakers just hijack that one too?

Maybe. That’s where the longstanding legal battle over the ability of Michigan state lawmakers to tinker with the results of citizen-led petition drives and the new ballot initiative come together. 

If Raise the Wage’s legal challenge over the 2018 petition succeeds and the state Supreme Court finds the Legislature’s “adopt and amend” tactics to be unconstitutional, the legislature won’t be able to tamper with the changes. They would be limited to adopting the proposal outright, or sending it to the ballot for Michiganders to vote on directly in November 2024.

What could a higher minimum wage do for Michigan?

A higher minimum wage wouldn’t just offer more money to low-wage employees.

Research shows that raising wages—even a modest amount—would improve worker productivity, and reduce employee turnover and absenteeism. Studies also show that a higher minimum wage can boost the overall economy by generating increased consumer demand.

A recent study from the University of California, Berkeley also showed that large minimum wage increases in other states have created positive effects on both overall earnings and employment—countering the notion pushed by corporate lobbyists that wage hikes kill jobs.

READ MORE: New state legislation set to help lower utility bills for Michiganders

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