The debate over Michigan’s minimum wage legislation is reigniting as a new referendum campaign gains momentum. If this effort succeeds, it could overturn the bipartisan compromise that was legislated earlier this year.
The Background
In 2018, Michigan’s legislature, then under Republican control, preemptively enacted a ballot initiative aiming to raise the state’s minimum wage. This move was intended to prevent the initiative from being decided by voters. Subsequently, the lawmakers altered the policy to significantly reduce its impact before its implementation.
This strategy, known as “adopt and amend,” was later ruled unconstitutional by the Michigan Supreme Court, which set a February date for the original wage law to be enacted.
Recent Developments
In response to the court’s decision, Michigan lawmakers revised the law just before the ruling took effect, responding to significant pressure from service industry stakeholders. These groups argued that the court’s decision would lead to an unsustainable increase in wages for tipped workers.
Saru Jayaraman, executive director of One Fair Wage, the group advocating for the referendum, expressed the determination of workers to move forward. “What we’re hearing, frankly, not just from restaurant workers, but from all workers, is that people are pissed off, people are really angry, they feel really betrayed, and they’re mobilized to try to, not to just try, but to absolutely get these signatures,” Jayaraman said.
Referendum Process
To place the referendum on the ballot, approximately 223,000 signatures are needed, a threshold lower than initiating a new ballot proposal. However, approval from a state election board, expected to occur at a meeting later this month, is necessary to proceed with the campaign.
The signature-gathering effort will involve paid gatherers, volunteers, and support from unions and faith groups, according to Jayaraman.
Implications of the Wage Increase
The original law aimed to gradually equalize the minimum wage for tipped and non-tipped workers. In contrast, the February legislation maintained a minimum wage for tipped workers that is, at most, half of the general minimum wage.
Rebekah Paxton, research director at the Employment Policies Institute, emphasized the potential economic impact of wage increases. She noted, “As they have to account for higher wage rates, they may have to reduce schedules, they may have to limit their opening hours, they may lay off staff. And so what we’ve seen in the data is that as the tipped wage goes up, we see employment suffers in restaurants, we see tips suffer in restaurants.”
Potential Outcomes
If the referendum is successful, it would revert the minimum wage law to the state mandated by the Supreme Court’s decision. However, the original decision could be temporarily reinstated before any election if the referendum qualifies for the ballot, due to Michigan’s legal stipulations.
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