Michigan workers will see the biggest minimum wage increase in the country next year — by far.
Minimum wages will increase in 23 states in all next year, with the typical wage floor rising by about 3%. Michigan’s minimum will increase almost 21% between now and the end of February under a state Supreme Court ruling that ends a long, messy fight over two 2018 ballot measures.
Under the ruling, Michigan’s minimum wage will reach $15 an hour by the end of the decade and a lower minimum wage for tipped workers will be phased out. Businesses also must provide workers with one hour of sick time for every 30 hours worked.
Republicans and business groups say the pending wage increases and leave requirements will hurt Michigan businesses and economy. GOP lawmakers stormed off the House floor last week after Democratic leaders refused to consider preserving the tipped minimum wage and making sick time requirements more flexible, as two bipartisan bills would do.
Passing those bills will be a top priority for Republicans when they take control of the House in January, said Rep. Graham Filler (R), cosponsor of the bipartisan package.
“The Republicans are going to run this bill,” Filler said. “If the Dems don’t get it done in the next week, the Republicans are running this ASAP [next year].”
Meanwhile, union leaders and worker advocates are urging Democratic lawmakers to allow the scheduled wage increases and sick time rules to take effect.
“If Michigan Democrats stand with working people, working people will stand with them in the next election,” Saru Jayaraman, president of One Fair Wage, the group behind the 2018 minimum wage measure, said this month on X.
Eleven states will hit $15 an hour or more next year, widening the gulf between the mostly Republican-led states where the federal $7.25 minimum still applies and the mostly Democrat-led states that set their own wage floors.
Most states raising the minimum wage next year will do so on Jan 1. Some states set different minimum wage requirements depending on business size, worker location or industry. California sets a higher minimum wage for fast food workers and certain health care workers, for instance.
In today’s tight labor market, businesses often need to pay above the statewide minimum to compete for workers. Just 81,000 workers earned exactly the federal minimum wage in 2023, according to the U.S. Bureau of Labor Statistics, a tiny fraction of hourly workers in states where the federal wage floor applies.
Still, advocates for workers continue to spar with advocates for businesses over minimum wage policy. Advocates for workers argue that higher wage floors help low-income people make ends meet, while advocates for businesses argue that raising the minimum wage leads to layoffs and higher prices.
Setting a $15 hourly minimum wage has been symbolically important for people who favor raising the wage floor, after fast-food workers launched the Fight for $15 campaign more than a decade ago.
It’s a target frequently written into both legislation and ballot initiatives. Alaskans voted last month to raise the statewide minimum to $15 an hour by 2027, for instance, and Missourians voted to raise it to $15 an hour by 2026.
But $15 doesn’t have the buying power it once did. Now advocates for workers in blue states such as California, New York and Massachusetts are pushing for wage floors of $20 an hour or more.
“People are looking beyond $15, because they understand that inflation has taken a toll,” said Yannet Lathrop, a senior researcher and policy analyst at the National Employment Law Project, a New York-based nonprofit that advocates for improving job quality.
In Michigan, the standard minimum wage will rise in January from $10.33 to $10.56 an hour and the tipped minimum will rise from $3.93 to $4.01. Employers can pay workers the tipped minimum if they earn enough in tips to earn the standard minimum wage overall.
Then in February, thanks to the court ruling, Michigan’s standard minimum wage will jump to $12.49 and the tipped minimum wage will be $5.99.
In Michigan, business leaders are more worried about phasing out the tipped minimum wage than they are about hiking the standard minimum. Raising the tipped minimum will dramatically raise labor costs for restaurant owners, salon owners and other service industry employers.
Many tipped workers also worry that phasing out the tipped minimum will ultimately lower their pay by discouraging customers from tipping. Servers and bartenders rallied at the state capitol last week to urge lawmakers to keep the tipped minimum wage.
Seven states — Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington — do not allow businesses to pay tipped workers a lower wage than the standard minimum. Michigan would be the first state to eliminate the tipped minimum wage in about 40 years, Lathrop said.