LANSING- Restaurant and retail associations denounced raising the minimum wage during a Michigan House committee hearing Wednesday, clashing with Democratic lawmakers who back an increase.
The Michigan Restaurant Association, National Federation of Independent Business and other groups said a wage hike would cut into businesses' profits, which could cause closures and layoffs. Many members said an ongoing ballot drive to up the wage to $10.10 an hour would be especially "devastating" because it eliminates a separate payment scale for tipped workers.
"If you could move something forward so at least it's a compromise, it'll be better than that ballot that's moving forward. That's the devastating one for us," said Jim Holton, MRA chairman and owner of Mountain Town Station Brewing Company & Steakhouse in Mount Pleasant.
Restaurateurs said they might support a revision to the bill sponsored by Senate Majority Leader Randy Richardville, R-Monroe, which currently raises the wage to $9.20 from $7.40 by 2017, and to $3.50 from $2.65 for tipped workers. They urged House members not to tie the wage to inflation, as it is in the bill.
Richardville's bill would allow the minimum wage to rise by up to 4 percent annually to adjust for inflation starting in October 2017. Democrats say the measure would limit the need for future legislative action on the issue. But state Rep. Mike Shirkey, R-Clarklake, said it would discourage economic growth in Michigan because business owners won't invest in a state where wages go up frequently.
Government Operations Committee chair state Rep. Pete Lund, R-Shelby Township, wouldn't indicate what changes might be made to the Senate bill before the committee sends it to the full House. The committee was expected to reconvene at 9 this morning.
The Republican-led Senate passed the bill 24-14 with bipartisan support last week.
Democratic lawmakers advocated for increasing the minimum wage during the hearing, saying a raise would lift thousands of Michigan residents out of poverty and an inflation measure would help them stay out.
"The benefit obviously is allowing people to keep up with the increases that happen each year, because otherwise we're just going backward," said Gilda Jacobs, president of the Michigan League for Public Policy and a former Democratic state lawmaker.
Richardville designed the bill to nullify the ballot drive led by the Raise Michigan coalition, which would amend current law to $10.10 an hour by 2017, including for tipped workers. His bill would repeal the existing wage law and enact a new one, making the ballot measure moot.
House Democrats' dilemma is whether to vote for a bill that minimum wage advocates say silences voters. The ballot campaign led by Raise Michigan has collected more than the 258,000 signatures needed to appear on the November ballot.
State Rep. Rudy Hobbs, D-Southfield, said he leans toward "a very soft yes" vote on the current bill, but would not support the bill if the committee removes the inflation measure or lowers the target wage from $9.20.
"We're going to have a hard time getting it out of committee in terms of the way we want to see it as Democrats ... and what Republicans have supported in the Senate," he said.