The Michigan Legislature Is Trying to Roll Back a Higher Minimum Wage and Paid Leave
“I don’t understand why anybody at this moment in time would be trying to lower people’s wages.”
by Jordan Zakarin, More Perfect Union
The Michigan House of Representatives voted last week to block over a million low-wage workers from earning paid sick leave and receiving significant wage increases. The new Republican House majority, along with the help of more than half a dozen Democrats, passed bills that defy a state Supreme Court order set to go into effect in late February.
“I don't understand why anybody at this moment in time would be trying to lower people's wages,” Rep. Dan Morgan, a Democrat from Ann Arbor, told More Perfect Union on the day of the vote. “It is so clear that everyone feels like they need more money in their pockets, and for us to actually reach into their pockets and take that money back out is ridiculous to me.”
HB 4001 and 4002 would largely nullify a landmark decision by the Michigan high court, which reinstated popular proposals that looked poised to pass via ballot initiative in 2018. Michigan was under a Republican trifecta at the time, and instead of allowing the initiatives to reach voters, the legislature used a quirk in Michigan law to adopt them into law, then gutted them after that fall’s election.
A lawsuit followed in 2020, and in August of last year, the court found that the “adopt and amend” quirk violated the state constitution. As a result, the state was ordered to honor the intent of the original initiatives. Right now, the minimum wage will hit $15 in 2028 and then be indexed to inflation, the tipped minimum will be eliminated in 2030, and workers at businesses with 10 or more employees will have the ability to earn a full 72 hours of paid leave.
Under the House’s bill, it would take the state a year longer to reach the $15, tipped workers would continue to earn just 38 percent of the minimum wage, and nearly 96 percent of workers would lose their access to paid leave.
Rep. Joey Andrews, a Democrat who represents a swing district in southwest Michigan, voted against the bill. “$15 an hour probably isn't even enough anymore,” Andrews told More Perfect Union. “It was 10 years ago, it's not anymore.”
Rep. Donovan McKinney, who represents a northern Detroit district with a median income of $14,000, decried the House vote.
“I believe no matter who you are in this country, no matter who you are in this state, you should be able to work one full-time job and make an honest living wage,” he said. A new poll shows that the policies are enormously popular with a bipartisan majority of Michiganders.
The Economic Policy Institute released a study this fall that projected that more than 563,000 workers in Michigan would earn over $1.3 billion in additional wages each year. For the 100,000 tipped workers who would benefit, it would mean a $6,669 raise. Women and people of color would likely benefit the most, as they make less on average in tipped service positions, and often have to endure harassment from customers who control their wages.
Conservative and industry groups have spent the past six months arguing that raising worker pay and guaranteeing them a few sick days per year would be catastrophic for businesses in the state. The Michigan Restaurant & Lodging Association, a powerful lobbying group that spent more than $176,000 in political contributions through its PAC last year, has made several dire predictions, arguing that the new rules would force a fifth of the state’s restaurants to close and lead to between 40,000 and 60,000 lost jobs.
But evidence shows that phasing out the tipped minimum wage is hardly a job killer. In late 2023, the Center for American Progress found that the seven states that did not permit businesses to pay tipped workers lower wages actually experienced faster and more robust post-pandemic job recovery in the leisure and entertainment sectors. In recent years, Washington D.C. and Chicago have moved to abolish the tipped wage.
Because Democrats control the state Senate and governor’s mansion, the House bills passed on Thursday are dead on arrival. But Democrats in the upper chamber have introduced their own bills that would make significant changes, including some that would not benefit workers.
While they proposed mandating a $15 wage in 2027, Senate Democrats also want to cap the tipped wage at 60 percent and allow businesses with fewer than 25 employees to offer just 40 hours of paid sick leave instead of the current 72. Right now, that floor is set to businesses with 10 employees.
The House Democrats that spoke to More Perfect Union understand that some technical changes need to be made, to address seasonal workers and how paid leave is calculated, but are wary of reducing long-awaited benefits to voters who clearly signaled that they need help.
“When we were knocking doors [last] year, people talked about high prices, the cost of living, housing, and that's something we ran on, trying to get the housing crisis under control, trying to get the cost of living down, money back in people's pockets,” Andrews said. “It doesn't make a whole lot of sense to pass bills that cut wages and take people off sick leave.”
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