The current minimum wage in Michigan of $5.15 per hour is being increased effective October 1, 2006 to $6.95 per hour. In March of this year, Governor Jennifer Granholm (D) signed legislation that increases Michigan’s minimum wage by $1.80 per hour this year and will increase it by forty-five cents in the next two years. Starting in July 2007 the minimum wage in Michigan will be $7.15 per hour and in July 2008 the minimum wage will be $7.40 per hour.
According to the U.S. Department of Labor’s Bureau of Labor Statistics, by raising the minimum wage at least 464,000 Michigan workers or nearly 1 in 5 hourly workers statewide will benefit from this increase. The law also includes increases for “tipped” employees. For example, wait staff will see an increase in the base minimum wage increased in increments. Currently the base minimum wage is $2.65 per hour and will increase $3.40 per hour then $4.15 per hour and finally to $4.60 per hour. In addition, the Michigan minimum wage law establishes training wages for new employees who are16 to 19 years of age to $4.25 per hour for the first ninety calendar days of employment.
The new minimum wage law for Michigan was a bill passed instead of a ballot proposition that would have been added to the state’s constitution. Governor Granholm announced that the higher minimum wage would help the state’s economy because low-income workers spend virtually all of their paychecks on subsistence or money that goes directly to stores and services.
Just like many other states that have either amended their constitution or passed legislation to increase their minimum wage, Michigan has followed suit and has not waited for the U.S. Congress to decide on an increase to the Federal minimum wage. Debate is still ongoing in the Congress but Michigan has taken the initiative to implement changes in order to help in the economic growth for their workers.