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| For Immediate Release |
Contact: Andy Deloney |
| August 3, 2005 |
517/377-3931 |
Minimum wage divides workers, bosses, politicians
Proponents of higher hourly pay in Michigan want the measure on the ballot in November '06.
What you think about the minimum wage, people say, depends on whether you're getting it or giving it. In Michigan, where the loss of factory jobs has sent thousands of people sliding down the income scale, this will soon boil down to a classic argument between two camps: those who believe increasing the minimum wage will give hundreds of thousands of workers a fuller and more dignified life, and those who think the government has no business setting the price of labor.
Michigan Democrats, who have been unable to get their plan for a $2 increase in the state's $5.15 minimum wage through the Republican-controlled Legislature, hope to put the issue before voters next year.
Polls indicate it would pass, and Democrats hope the issue would give their overall ticket a boost in November 2006.
Prospects of a pay boost for the first time in eight years is welcome news to Jean Boudrie, a Monroe senior who is working a minimum-wage job to supplement her Social Security income. "If they bump up my pay $2 an hour, that frees up money to pay at least two monthly bills, like utilities or groceries," said the 70-year-old receptionist. "As it is, the minimum wage is just a hair above volunteer work."
Opponents, however, say workers at the bottom of the pay scale would be hurt by raising the minimum wage, because employers faced with higher costs would be forced to reduce the number of jobs. Michigan's unemployment rate has been among the nation's worst for months. "It drives up the cost of entry-level jobs and increases the cost of doing business in Michigan at a time when company profits in the state are already shrinking," said Wendy Hofmeyer, a lobbyist for the Michigan Chamber of Commerce. "Thousands of entry-level jobs will be left out of the marketplace."
The U.S. Labor Department estimates that 460,000 workers in the state would get a raise under the plan: 88,000 are at the minimum wage and another 372,000 earn less than $7.15 an hour. They include Calaundra Knight of Detroit, who was nine months pregnant with her first child when she earned her GED. She's seven months pregnant with her next child and recently earned a certificate to work as an office assistant. She's worked in a host of jobs for menial pay since she was 16. Most recently, she waited tables at a Bob Evans Restaurant in Livonia for $2.65 an hour. Some days, she'd bring home $65 a day in tips. Others, it was about $7.
"Making $5.15 an hour is OK if you're a little kid going to school, but you can't live on it if you're on your own," said Knight, 23. "Another $2 might not seem like a lot, but it adds up. And that means, if you have experience, other jobs probably would pay more too."
Unlike many people, Knight has no safety net of relatives. Her mother has AIDS. Her father has been out of the picture for years. She and her son, Joseph Jenkins, 2, live in a friend's house and get by with public assistance and odd jobs such as hairstyling. It isn't enough. One day last week, Knight said she only could afford to eat a candy bar and bag of chips. "Sometimes, when you're in the slums, you get determined," Knight said. "I don't want to be on aid. I'm not above it, but it's a struggle when you don't have anyone else. ... I'm looking for jobs, trying to hide my (pregnant stomach.) I wanted to get a job before I was showing too much. I want to work. I want to be working when my water breaks. I'm tired of living off other people."
"My grandkids won't even rake the leaves in my yard for $5.15 an hour," said Sen. Ray Basham, D-Taylor, the lead sponsor of the Senate version of the minimum wage raise bill. "We have people who are working and still living in poverty, and that's unconscionable." If a petition drive to put the issue before voters succeeds, Michigan would join 15 other states that have raised their bottom pay above the federal basement. Democratic activists say Michigan could be one of as many as 10 states to have the issue on the ballot in 2006. "We will play as large a role as needed to pass that ballot issue," said Mark Gaffney, president of the Michigan State AFL-CIO. "Right now we are hosting the strategy meetings and talking about raising money through our affiliates. We will be a partner in the effort."
Gaffney said it's "a fairness issue and a Michigan economic health issue," since workers who stand to gain a $4,000 raise through a boost in the minimum wage would spend that money in Michigan. Voters in four states have considered minimum wage hikes since 1997 and all have been approved. Last fall, 71 percent of Florida voters passed a measure that took the minimum wage to $6.15 an hour.
EPIC/MRA of Lansing conducted a poll of 1,000 voters this month that showed Michiganians in favor, 72 percent to 22 percent. Pollster Ed Sarpolus said a minimum wage proposal on the ballot next year could increase Democratic turnout 3.8 percent, or 180,000 voters. The issue could do for Democrats what gay marriage ban proposals did for Republicans on last fall's ballot. The governor's office and all 148 legislative seats are up for grabs next year, as well as the U.S. Senate seat held by Sen. Debbie Stabenow, a Lansing Democrat.
House Speaker Craig DeRoche, R-Novi, called "cynical" a strategy that uses the minimum wage issue purely for electoral politics. But he added that Republican candidates shouldn't shy away from taking a stand against raising the wage. "The voters of Michigan want our state to be more competitive -- they know business costs are high here," he said.
DeRoche added that there is an employability issue that hasn't been a part of the debate. "Some people may only be employable at $5.15 an hour at certain stages of their life when their productivity is limited ... when they're entering the work force, or in the later years of their work life, or maybe they have a physical or mental impairment," he said. "They may not be employable at $7.15 an hour. "It's great to say you want people to make more money, but how about those people you're sending home?" The minimum wage boost is supported by Democratic Gov. Jennifer Granholm, who said in her State of the State address this year "it's only fair to our workers -- many of whom are supporting families on $5.15 an hour, below poverty line wages ..." Amber Caldwell, a 22-year-old single mother of four from Lansing, agrees. She works at a Rally's restaurant for the minimum wage.
"The simple fact is the minimum wage is very hard to live on," Caldwell recently told lawmakers. "The cost of living is so high. "When you're in our position, it seems like politicians don't want you to get ahead. They don't live off the minimum wage so it doesn't bother them. They don't think about it every day like we do."
Tommy Brann, who owns nine restaurants including Brann Steakhouse and Grille eateries in Sterling Heights and Northville, said the wage hike measure "would just kill us." He said wages should be set by the marketplace rather than mandated by government. "We pay at least $6 an hour for our dishwashers and we pay more if they're good workers. That's the way the system is supposed to work," Brann said.
Brann has 700 employees and 10 percent to 15 percent earn less than $7.15 an hour, he said. If the minimum wage is increased, he'll likely have to hire fewer people and cut managers, he said. The 35-year veteran restaurateur especially opposes boosting pay for tip earners from the current $2.65 minimum to $4.60 an hour. He said his waitresses and waiters can earn $20 an hour in tips. Hofmeyer at the Chamber of Commerce said passage of the proposal would give Michigan the third-highest minimum wage in the country -- behind Washington at $7.35 and Oregon at $7.25 -- and the highest in the Midwest.
"A lot of companies may have to shut their doors if they're forced to pay higher wages than they can afford," she said.
The countless studies on the impact of minimum wage increases arrive at conflicting conclusions. Some say a boost in the wage leads to a loss of entry-level jobs and does not benefit low-income breadwinners. The increase is more likely to lure teens from affluent families into the job market, they report.
But other research suggests that the last federal minimum wage increase in 1997 did not lead to a loss of jobs. In fact, states with minimums higher than the federal standard saw greater increases in employment over the past few years than states that are at the federal minimum, the studies indicate.
Rebecca Blank, dean of the Gerald R. Ford School of Public Policy at the University of Michigan and co-director of the school's National Poverty Center, says significant numbers of workers will benefit from a minimum wage increase. Many of those will be former welfare recipients who have been pushed into low-wage jobs by welfare-to-work reforms.
"The most likely person to be earning minimum wage is a low-skilled woman," Blank said. "That's a group that is clearly going to see some impact."
Founded in 1921, the Michigan Restaurant Association represents more than 4,500 Michigan foodservice establishments. The foodservice industry plays an integral role in Michigan’s economy, employing more than 436,000 people and creating more than $11.3 billion in total annual sales. For more information, call (517) 482-5244.
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