Oakland University poll results on minimum wage increases
Oakland University in May asked experts, business executives and consumers whether Michigan’s minimum wage should be raised to $10 an hour. Here are the results:
• 28.5 percent of experts agree or strongly agree; 71.5 percent disagree or strongly disagree
• 32 percent of business executives agree or strongly agree; 49 percent disagree or strongly disagree; 19 percent are neutral
• 47 percent of consumers agree or strongly agree; 22 percent disagree or strongly disagree; 31 percent are neutral
New data released by the Department of Labor points toward job growth in states that have raised the minimum wage, something still being debated in Michigan.
The report comes as Michigan Board of Canvassers consider a proposal to put the issue on the November ballot.
The state in May approved legislation that would raise the state’s minimum wage to $9.25 an hour by 2018 in step increases. According to the Associated Press citing the labor department, 13 states that raised their minimum wages at the start of the year have added jobs at a faster pace than those that did not. This report counters the debate over what impact a higher minimum has on hiring trends.
A Congressional Budget Office report earlier this year lent some support for the view that higher minimum wage discourages job growth. It found that a minimum wage of $10.10 an hour, as President Obama supports, could cost 500,000 jobs nationwide.
A group called Raise Michigan, which is pushing for a minimum wage hike from $7.40 an hour to $10.10 by January, 2017, turned in approximately 259,776 signature to the Board of State Canvassers to see if an alternative proposal can be placed on the November ballot, said Fred Woodhams, a Michigan Department of State spokesman. The board will meet Thursday morning to review the petition. If confirmed, the board will send it to the legislature, which will have up to 40 days to deny or accept it. The group had to collect 258,088 signatures to be considered, Woodhams said.
According to the AP, in the 13 states that boosted their minimums at the beginning of the year, the number of jobs grew an average of 0.85 percent from January through June. The average for the other 37 states was 0.61 percent.
The results do not surprise Rep. Tim Greimel, D-Auburn Hills, who is also the House minority party leader.
“There has never been any good economic data to suggest that unemployment increases with increases in the minimum wage,” Greimel said. “It stands to reason that as workers make a better wage and have more money to spend that they support more local small businesses and local communities; thereby, promoting economic growth and job creation.”
The legislation calls for “modest” increases, he added.
“The economic evidence is clear that modest increases in the minimum wage like what is occurring now in Michigan do not significantly increase prices or unemployment.”
However, Jonathan Silberman, professor of economics at Oakland University, disagreed.
“Generally speaking, if it’s a business that’s paying below the increase, it’s going to likely have an adverse effect on that business,” Silberman said. “Either their costs will go up, so their profit margin will go down, or they’ll raise prices to compensate for that increase. That price increase, depending on the type of business, may have an impact on their sales.”
Fast-food chains will generally be impacted the most, because those are primarily minimum wage jobs, he said.
But restaurants and other low-wage employers may have other ways of offsetting the cost of higher wages, aside from cutting back on hiring, said Sylvia Allegretto, an economist at the University of California, Berkeley. Higher pay can reduce staff turnover and save on hiring and training costs.
As for the labor department data:
“There could be lots of reasons for job growth in a state, and correlation is not causation,” Silberman said. “Just because there’s job growth in some states where they had a minimum wage increase doesn’t mean the minimum wage increase caused the job growth. There could be other factors that caused the job growth.”
Nine of the 13 states increased their minimum wages automatically in line with inflation: Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont and Washington. Four more states - Connecticut, New Jersey, New York and Rhode Island - approved legislation mandating the increases.
Some note that six months of data is not enough to draw strong conclusions.
“It’s too early to tell,” said Stan Veuger, a scholar at the American Enterprise Institute, to the AP. “These states are very different along all kinds of dimensions.”
State and local governments have become increasingly active on the issue as the federal minimum wage has remained unchanged for five years. Twenty-two states currently have higher minimums than the federal requirement