More than 25% of Michigan workers, including about one-third of women working in the state, would earn thousands of more dollars each year should Congress pass the recently introduced “Raise the Wage Act of 2021,” according to a new report from a Washington, D.C., think tank.
The Raise the Wage Act of 2021, introduced by U.S. Rep. Bobby Scott (D-Va.) in the U.S. House on Jan. 26 and co-sponsored by six Democrats from Michigan, would gradually increase the federal minimum wage from its current $7.25 to $15 an hour by 2025.
The raise — which would be the first increase to the federal minimum wage since 2009 — would result in a pay increase for nearly 32 million workers across the country, or about 21% of the United States workforce. In Michigan, which has a minimum wage of $9.65 an hour, about 1.24 million of the state’s lowest-paid workers would receive an extra $3,157 per year, on average, according to the Economic Policy Institute (EPI).
That 1.24 million represents about 28% of all Michigan workers.
“Our workers don’t just deserve a raise, they have earned a raise,” said U.S. Rep. Debbie Dingell (D-Dearborn), one of the bill’s co-sponsors. “A $15 minimum wage would show that this nation truly values the work of people who put their lives on the line to keep our economy afloat throughout this pandemic. If we continue to ignore the demands for a higher minimum wage, we are punishing the very workers who we need to be the glue that keeps us together as we rebuild our economy.”
Michigan’s minimum wage last went up in 2019. The rate was scheduled to increase to $9.87 an hour in January, but under a 2018 law, scheduled minimum wage increases aren’t permitted when the state’s annual unemployment rate for the preceding calendar year is above 8.5%. Thanks to the COVID-19 pandemic, the state exceeded that jobless rate.
In addition to raising the federal minimum wage to $15 per hour, the legislation would also phase out the sub-minimum wages for tipped workers, youth workers, and workers with disabilities to ensure they are paid at least the full federal minimum wage. The federal minimum for tipped minimum wage employees has remained at $2.13 an hour since 1991. In Michigan, that increases to $3.67.
The Raise the Wage Act, an earlier version of which was passed by the House in 2019 but didn’t see a vote in the then-Republican controlled Senate, comes at the same time that President Joe Biden has included a measure to increase the minimum wage to $15 an hour in his $1.9 trillion COVID-19 relief package, something that’s expected to face GOP opposition.
The legislation would result in wage increases for essential workers, such as grocery store employees, who are paid some of the lowest wages in the country but have born the brunt of COVID-19; lift people out of poverty; reduce racial and gender equality; and accelerate economic rebuilding following the pandemic, federal lawmakers supporting the bill said.
“In the richest country in the world, no one who works full time should have to raise their family in poverty,” said U.S. Rep. Dan Kildee (D-Flint), one of the bill’s co-sponsors. “Especially during this pandemic, Michiganders are working harder than ever, but their wages have not kept up with rising costs. Despite frontline workers risking their own health to perform jobs that are critical to our economy, many essential workers still do not earn a living wave. Economists and the American people agree: increasing the minimum wage is good for our economy and workers.”
According to the Massachusetts Institute of Technology, an adult with no children must make $11.35 an hour to earn a living wage in Michigan. Meanwhile, one adult with one child must make $23.77 per hour to make a living wage.
While the EPI did not provide Michigan-specific data for Black and Latino workers who would be impacted by the legislation, Democratic lawmakers said in a press release that nearly one-third of all Black workers and one-quarter of all Latino workers in the country would receive a pay increase under the Raise the Wage Act.
Additionally, women make up close to 60% of workers nationally who would see their pay increase under the bill. According to the EPI research, about 754,000 women in Michigan would see their wages increase, which represents 35% of all women workers in the state and 61% of all workers affected by the legislation.
“The long-overdue Raise the Wage Act is a key part of our middle class agenda for Michigan,” said U.S. Rep. Haley Stevens (D-Rochester Hills), one of the bill’s co-sponsors. “We are living through the longest period in American history without a federal minimum wage increase, and middle-class families in Michigan are struggling to get ahead.”
“In addition to raising the minimum wage, we must continue expanding access to skills training and implementing robust worker protections, backed up by a strong labor movement, to ensure that every Michigander has a path to a successful career and a job that pays a living wage,” Stevens continued. “The Raise the Wage Act is good for workers, good for businesses, good for our economy, and it is in line with what Michiganders want.”
The EPI report, conducted by economic Ben Zipperer, senior analyst David Cooper, and director of research Josh Bivens, estimates that by raising the federal minimum wage to $15 by 2025 and eliminating the tipped minimum wage would result in a significant drop in government expenditures on public assistance programs. That decrease would be between $13.4 billion and $31 billion annually, while the tax revenues from the increase would rise, the EPI report notes.
”A significant increase in the minimum wage has really direct and significant fiscal effects through a number of easily-identifiable channels,” Cooper said in a prepared statement. “Higher wages lead to workers qualifying less frequently for public benefits and often receiving less even when they do qualify. They also boost tax revenue.”
Impact by congressional district
The following is a breakdown of how the Raise the Wage Act of 2021 would impact each congressional district in Michigan:
1st Congressional District
- 31% of workers (88,000 people) would see an average annual wage increase of about $3,000.
2nd Congressional District
- 29% of workers, or 100,000 people, would see an average annual wage increase of about $2,900.
3rd Congressional District
- 28% of workers, or 96,000 people, would see an average annual wage increase of about $3,100.
4th Congressional District
- 30% of workers, or 88,000 people, would see an average annual wage increase of about $3,100.
5th Congressional District
- 32% of workers, or 88,000 people, would see an average annual wage increase of $3,200.
6th Congressional District
- 28% of workers, or 93,000 people, would see an average annual wage increase of $3,200.
7th Congressional District
- 26% of workers, or 79,000 people, would see an average annual wage increase of $3,000.
8th Congressional District
- 25% of workers, or 87,000 people, would see an average annual wage increase of $3,200.
9th Congressional District
- 25% of workers, or 88,000 people, would see an average annual wage increase of $3,300.
10th Congressional District
- 26% of workers, or 83,000 people, would see an average annual wage increase of $3,100.
11th Congressional District
- 19% of workers, or 68,000 people, would see an average annual wage increase of $3,300.
12th Congressional District
- 27% of workers, or 88,000 people, would see an average annual wage increase of $3,200.
13th Congressional District
- 38% of workers, or 102,000 people, would see an average annual wage increase of $3,300.
14th Congressional District
- 31% of workers, or 92,000 people, would see an average annual wage increase of $3,300.