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October 25, 2013

Switalski presses case to ‘supersize’ minimum wage

Michigan Chamber of Commerce says increase could actually hurt low-wage workers

By Brian Louwers
C & G Staff Writer

» click to enlarge «
From left, State Rep. Jon Switalski, D-Warren, and Eric Brown, of Detroit, met outside the Taco Bell on Eight Mile Oct. 22, where Brown works part-time for minimum wage. Switalski’s bill in the state Legislature would raise Michigan’s minimum wage to $9 in January 2014. The Michigan Chamber of Commerce opposes the measure and said it would hurt low-wage workers.

WARREN — Minimum wage doesn’t buy much these days. State Rep. John Switalski says it doesn’t even go as far as it used to because of inflation.

“There’s something wrong there,” said Switalski, D-Warren, who sponsored legislation this year that would raise the state’s minimum wage from $7.40 per hour to $9 per hour in January 2014. “Minimum wage has lost value by 20 percent.”

Switalski met 23-year-old Eric Brown, of Detroit, outside a Taco Bell restaurant on Eight Mile Road Oct. 22. Brown, who suffered a hand injury at another job, has worked part-time at the restaurant for six months and still makes minimum wage. He has four young children and said the money goes fast.

“There’s a couple guys that have been here for a year and a half and still haven’t got their raises. I’m hoping I’m not going to be in the same situation,” Brown said. “It’s kind of tough. It’s hard out here, especially when the rent is due. It’s sad that you have to have a second job to support your family.”

Brown said his family receives food stamps that help, but other bills make money tight.

Switalski said another employee at the same Taco Bell works full-time and still struggles. He said she also receives food assistance.

“She works full-time. She’s not lazy,” Switalski said. “It’s really that taxpayers are subsidizing, through public assistance, these corporations’ low wages.”

Switalski’s bill is one of several pieces of legislation proposed in recent months that would raise Michigan’s minimum wage. Another bill proposed in the Michigan Senate by state Sen. Bert Johnson, D-Highland Park, would increase the minimum wage to $10 per hour over a two-year period. Johnson’s bill, and another in the state House, would also index the state’s minimum wage to inflation as a means of preventing its loss of value over time.

The Michigan Chamber of Commerce, an organization representing a broad range of businesses in the state, has opposed both measures. Wendy Block, the Chamber’s director of health policy and human resources, said the group supports leaving wages and benefits to be negotiated in the workplace between employers and employees.

“Michigan is currently only one of 19 states that has a higher minimum wage than the federal minimum wage ($7.25 per hour since 2009). This legislation would result in Michigan having one of the highest minimum wages in the country,” Block said. “Studies show that although the intent of the increase is to help low-wage workers, the opposite is actually true because it drives up the cost of entry-level jobs. It encourages employers to hire higher-skilled job applicants and actually increases the costs of doing business in the state.

“In the end, a minimum wage increase leaves the least skilled out of the labor market,” Block said. “We don’t believe that is good for the individuals that these policies are aimed at helping.”

To illustrate that point, Block said labor economists estimate that employment drops 5 percent among affected workers for every 10 percent increase in minimum wages.

Other groups see it differently, however.

The Michigan League for Public Policy, a nonpartisan, nonprofit research and advocacy group, published a report this month claiming that a modest increase in the minimum wage would pump $1.09 billion into the state’s economy. The report also claimed indexing the minimum wage to inflation could help keep family incomes above the poverty threshold in the future.