More bad COVID-19 news: Michigan unlikely to see a minimum wage hike

    By
    Susan J. Demas
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    A Target store employee collects shopping carts to bring back into the store on August 21, 2019 | Joe Raedle/Getty Images

    The COVID-19 pandemic is set to hit workers in another way, as a scheduled minimum wage hike is unlikely to go into effect on Jan. 1.

    The rate was supposed to rise from $9.65 per hour to $9.87, but that’s unlikely to happen, the Michigan Bureau of Employment Relations, Wage and Hour Division said last week.

    Why is that? In 2018, there were two citizen-led petition drives that received enough signatures to go on the ballot: one mandating sick leave for workers and another raising the minimum wage to $12 per hour.

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    The GOP-led Legislature adopted both measures in the summer, thus preventing them from going on the ballot. But after the November general election, Republicans introduced new legislation backed by most business groups to water down both measures, which was passed and signed by then-Gov. Rick Snyder, a Republican.

    Under the new law, the Improved Workforce Opportunity Wage Act of 2018, scheduled minimum wage increases aren’t permitted when the state’s annual unemployment rate for the preceding calendar year is above 8.5%.

    The state’s 2020 annual unemployment rate, which is determined by the Bureau of Labor Statistics (BLS), U.S. Dept. of Labor, is calculated by using both average labor force and unemployment levels for January through December.

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    Thanks to the COVID-19 pandemic, the rate is expected to break 8.5%. While Michigan’s October unemployment rate continued its downward trend and was 5.5%, the annual average from January through October currently sits at 10.2%. Officials said it’s “highly unlikely” to dip below the 8.5% threshold when BLS releases the final 2020 unemployment numbers for Michigan.

    If, as expected, the annual unemployment rate does not fall below 8.5%, then effective Jan. 1:

    • Michigan’s minimum wage will remain at $9.65 an hour.
    • The 85% rate for minors age 16 and 17 remains $8.20 an hour.
    • Tipped employees rates of pay remains $3.67 an hour.
    • The training wage of $4.25 an hour for newly hired employees age 16 and 17 for their first 90 days of employment remains unchanged.

    Michigan’s minimum wage rate could next increase to $9.87 on Jan. 1, 2022.

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    Susan J. Demas
    Susan J. Demas is a 19-year journalism veteran and one of the state’s foremost experts on Michigan politics, appearing on MSNBC, CNN, NPR and WKAR-TV’s “Off the Record.” In addition to serving as Editor-in-Chief, she is the Advance’s chief columnist, writing on women, LGBTQs, the state budget, the economy and more. Most recently, she served as Vice President of Farough & Associates, Michigan’s premier political communications firm. For almost five years, Susan was the Editor and Publisher of Inside Michigan Politics, the most-cited political newsletter in the state. Susan’s award-winning political analysis has run in more than 80 national, international and regional media outlets, including the Guardian U.K., NBC News, the New York Times, the Detroit News and MLive. She is the only Michigan journalist to be named to the Washington Post’s list of “Best Political Reporters,” the Huffington Post’s list of “Best Political Tweeters” and the Washington Post’s list of “Best Political Bloggers.” Susan was the recipient of a prestigious Knight Foundation fellowship in nonprofits and politics. She served as Deputy Editor for MIRS News and helped launch the Michigan Truth Squad, the Center for Michigan’s fact-checking project. She started her journalism career reporting on the Iowa caucuses for The (Cedar Rapids) Gazette. Susan has hiked over 3,000 solo miles across four continents and climbed more than 60 mountains. She also enjoys dragging her husband and two teenagers along, even if no one else wants to sleep in a tent anymore.