Small Business Group Says Minimum Wage Increase Will Cost the State 183,000 Jobs, Reduce Real Output by $76B

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The Lansing branch of the National Federation of Independent Business (NFIB) has concerns a ballot proposal to increase Michigan’s minimum wage would cost the state 183,000 jobs if it became law, the group announced today.

“As reported in a study of this proposal by the NFIB Research Center, Michigan will lose 183,000 jobs over the next 10 years, and there will be a cumulative reduction in Michigan real output of more than $76 billion,” says Charlie Owens, state director for Michigan’s NFIB. “Sixty-two percent of the forecast job losses are jobs that would have been in the small business sector of the economy.”

A group called One Fair Wage submitted signatures today in an effort to put a mandated minimum wage hike on November 2018’s ballot. The proposed wage would be $12 an hour by 2022 and eliminate the tip credit for restaurant workers. Michigan’s current minimum wage is $9.25 and was raised to that amount in January. 

“The group pushing this proposal is financed primarily by out-of-state interests having received the bulk of their funding from labor unions or labor union front groups located outside of Michigan,” says Owens.

Under the Michigan Constitution, any citizen or group of citizens can collect the required number of signatures on a petition to have it introduced into the state legislature as a bill. The legislature has 40 days to act on the proposal. If they pass it, it becomes law. If they take no action or the proposal fails to pass, it appears on the statewide ballot.

Owens says a survey of small-business owners who are members of the NFIB showed strong support for intervention by the legislature to keep the proposal off the ballot.

“Michigan must act to keep this misguided proposal off the ballot to prevent the state from moving backward into the mess it was in just eight years ago,” says Owens. “If lawmakers allow this proposal to go to the ballot, and it is passed by the voters, a three-fourths super-majority of the legislature would be required to change the law, and Michigan will then be stuck with one of the most stringent minimum wage employer mandates in the country.

Owens also said that in Maine, restaurant workers successfully persuaded the legislature to repeal a similar proposal because it ended up being a pay cut for most tipped employees in the foodservice industry.

“This group wants everyone to believe they are speaking for workers, but their proposal ended up being a pay cut for most tipped food service workers in Maine, and the same will happen here,” he says.

Owens says the NFIB will work with other jobs provider groups in Michigan to defeat the ballot proposal.

A copy of the study can be found here

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