Mike’s Musings: State mandated minimum wage increases will damage small business

You gotta feel for small businesses. Not only are their pricing and services under attack by big box stores and internet giants from here and China, they must weave through a ton of regulations placed on them by the government.
The Michigan State Legislature is now getting in the act, enacting several minimum increases through 2028. In a nutshell minimum wage was increased to $10.58 an hour on January 1. Most would say “no big deal.” However, on Feb. 21, just a few days from now, it will increase nearly two dollars to $12.48 an hour.
Then for the next three years annual increase will be enacted. Minimum wage becomes $13.29 on Feb. 21, 2026; $14.16 on Feb. 21, 2027; and $14.97 on Feb. 21, 2028.
Furthermore, tipped workers will see a 100 percent by 2030. On Feb 21, 2025 their rate increases to $5.99; then two more dollars in 2026, two more in 2027 and two more in 2028, so that it is $11.98 per hour.
It may be noted that the substantial increases were part of an order from the state Supreme Court, which in 2024, ruled a decision to adopt a ballot proposal as presented above was not unconstitutional.
In addition to increasing the state’s minimum wage each year, the law has increased paid sick time. Small businesses, less than 10 employees must provide 40 hours of paid sick time per year. Additionally the sick time can be accrued year after year. If you have more than 10 employees you must provide 72 hours of paid sick time per year.
Now many of us might see this as terrific news. We are going to get paid substantially more over the course of three years. BUT, at what cost? For small businesses it could be an enormous cost. Ditto bigger businesses.
And for the employee hoping to get paid, they may find themselves in the unemployment line, because I guarantee if they don’t go out of business, restaurants and shops will cutback on the number of people they employ. Some will turn to automation, eliminating employees all together because they simply can’t keep up with the minimum wage increases.
Fortunately the new legislature, now controlled by Republicans, is expected to address the issue. It may be noted that the substantial increases were part of an order from the state Supreme Court, which in 2024, ruled a decision to adopt a ballot proposal as presented above was not unconstitutional.
“We’ve heard from countless hardworking small business owners and their dedicated employees about what this ruling would mean for them. It would be a catastrophe, said state rep, Jay DeBoyer.
DeBoyer and other conservative lawmakers have formed a committee to address these over-the-top issues. Additionally, Republicans have introduced several bills to slow down the current schedule of increases.
I hope the legislature is serious about tackling this situation. Sometimes they are more talk than action. I expect action this time around. Many of my small business friends and their employees are counting on it.