DETROIT — A recurring call to raise the minimum wage has returned in the run up to Labor Day, in the form of national rallies and a new report that finds Michigan ranks second to worst among states for wage growth during the past 30 years.
Fast-food workers in Detroit, Flint, Lansing and elsewhere in the state and country protested on Thursday with demands for higher wages, which followed similar demonstrations by unions and community groups during the past several months. They seek $15 an hour – more than double the federal minimum wage of $7.25.
The nonprofit advocacy group Michigan League for Public Policy released a study a day later that also calls for raising the minimum wage. The report includes analysis of U.S. Census data that finds Michigan's median wage fell by 7 percent between 1982 and 2012 after adjusting for inflation – the biggest wage drop of all 50 states and the District of Columbia after Alaska.
The report, which incorporate s recent U.S. Census data analyzed by the labor-oriented Economic Policy Institute, also finds a 24 percent decline in the median wage for African-Americans during the same period. The gap became the widest last year, when the white median wage was $4.20 per hour higher than the black median wage.
The state's current minimum wage is $7.40 an hour. The organization says although "there is no silver bullet to solving" Michigan's economic challenges, raising the minimum wage could help, and it supports a bill introduced in the Michigan Legislature in April to boost it to $10 an hour by 2016.
The Democratic legislation has not been embraced by Republicans who control the Legislature or Republican Gov. Rick Snyder. GOP legislative leaders say hiking the minimum wage would hurt employers' ability to hire people. The opinion is shared by the restaurant industry, which says it already operates on thin margins and argues sharply higher wages would lead to steeper prices.
Snyder's office said in a statement that he believes there are more effective ways of reversing the slide in Michigan's median wage, and the state is "seeing the results."
The statement cited several efforts, including the governor's Community Ventures program. That includes providing mentoring and removing some barriers to employment, such as a lack of transportation and financial literacy.
Charles Ballard, a Michigan State University economist and Michigan League board member, said minimum wage manipulation is a complicated issue, with some studies suggesting increasing it will lead to hiring freezes or job cuts, and others say it won't have any ill effects.
"My view is if there were an increase … it would help the low-income, low-wage group," he said. "There might be some employment losses but wage gains for those still employed are likely to be larger."
Still, he said, no studies he's aware of have examined doubling the wage, which he said would represent "uncharted territory" for the economy at large.
Regardless of politics, Ballard said, Michigan's loss of wages is real. Michigan had the fourth-highest median wage in the nation in 1982 and within 30 years it fell to 24th highest as high-paying manufacturing jobs declined. Yet during that period, workers earning the most saw significant wage gains. For example, workers in the 90th percentile – with higher earnings than 90 percent of other workers – were able to purchase 22 percent more by 2012, the report said.
"We've had this historically unprecedented increase in income inequality," he said. "I'm very, very concerned about the fact that our economy has doubled in size since the 1970s but an awful lot of average folks are not doing much better than they were decades ago … or even much worse."