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Michigan minimum wage increase takes effect with new year

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Michigan's minimum wage is increasing to $9.87 an hour in 2022.

Michigan's minimum is rising to $9.87 an hour in 2022.

But the 2% bump won't do much to boost the buying power of minimum wage workers, Charlie Brown, a labor economist at the University of Michigan, said.

"What's happening is that the minimum wage is being increased quite slightly," Brown said. "Depending on which inflation measure you look at, (it's) at the rate of inflation or a bit below.”

The increase results from a 2018 state law. When Michigan's Republican-controlled Legislature passed that law, it blocked a ballot measure that would have let voters decide on a steeper minimum wage increase to $12 an hour by 2022.

At a certain point, a higher minimum wage will lead to businesses hiring fewer workers, Michigan State University economist Charles Ballard said. But Ballard doesn’t believe Michigan is close to that threshold.

“We're seeing a lot of help wanted signs," he said. "A lot of employers are having trouble finding the workers they need.”

Michigan’s minimum wage did not rise in 2021 because state law ties the increase to joblessness rates during the preceding year. In 2020, largely because of the COVID-19 pandemic, the yearly unemployment average was too high at 9.7%,

Unemployment has since dropped to 5.9% in November 2021, according to the most recent data from the Michigan Department of Technology, Management and Budget.

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