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Unions to Seek Minimum Wage Increase in 2014

A coalition with strong ties to Michigan labor unions recently announced its intentions to place a minimum wage increase on the 2014 General Election ballot.  Although proponents have yet to announce the increase they plan to present to voters, we expect the proposal to call for an increase in Michigan’s $7.40 minimum wage to anywhere from $9.25 to $10.10 per hour. Read more here (link to 

Pros

Starting in 1981 and continuing until today, most of the nation’s income growth has been earned by the top 5 percent of the income earners and income inequality limits consumer spending, slowing the economy.

Also, by providing more income for families, people have more disposable income, thus driving the market and helping all businesses.

 

Cons

Many believe that increasing the cost of employing entry-level workers, will decrease opportunities for lower-skilled workers because employers will be forced to hire higher-skilled job applicants to fill multiple roles or cut jobs to absorb the costs associated with the increase.  Furthermore, this proposal will place upward pressure on other wages in the labor market. Any increase in the minimum wage has a spillover effect on workers who currently earn just above the minimum wage.

Currently, Michigan is one of 21 states that has a minimum wage rate higher than the federal minimum wage. Michigan job providers are doing their best to provide the highest wage possible to their workers because they know it is the best way to attract and retain a quality workforce. Given that Michigan currently has an 8.4 percent unemployment rate, we believe government and voters should be focused on policies to help workers get jobs, not actively increasing the cost of hiring workers and creating barriers to entry.

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