LANSING – Legislative Democrats, with the backing of Democratic Governor Jennifer Granholm, proposed on Monday the first increase in the state minimum wage since 1997. The move was immediately labeled a job killer by the Michigan Chamber of Commerce.

The proposal would call for raising the state minimum wage from $5.15 per hour to $7.15 per hour. The state last raised its minimum wage to bring it to the same level as the national minimum wage, which remains at $5.15 per hour. The state minimum wage covers workers employed by companies grossing less than $500,000 a year and not involved in interstate commerce.

But it appears the proposal could be blocked by Republicans, who control the Legislature. Matt Resch, spokesperson for House Speaker Craig DeRoche (R-Novi), called the proposal a “nonstarter” because it would force businesses to lay off workers to afford paying additional wages and discourage businesses considering locating in Michigan from coming here.

Two state’s bordering Michigan – Indiana and Wisconsin – all have state minimum wages in line with the national rate of $5.15 per hour, Resch said. To raise Michigan’s minimum wage above theirs would push businesses thinking of relocating into moving to those states, not Michigan.

Ohio’s minimum wage varies by company sales from $2.80 an hour to $4.25 an hour, according to the U.S. Department of Labor.

Raising the state minimum wage will increase the cost of doing business in Michigan and reduce low-skill, low-paying jobs in the state, the Michigan Chamber of Commerce said Monday.

“This proposal is a job killer,” said Wendy Hofmeyer, Director of Health Policy & Human Resources for the Michigan Chamber. “Labor economists estimate that for every 10 percent increase in the minimum wage rate, employment among those affected drops by five percent. Increasing Michigan’s minimum wage to $7.15 per hour – a 38 percent increase – would place Michigan among the highest minimum wage rate states in the nation.”

Currently, Michigan is one of 28 states that has a minimum wage rate the same as the federal government.

“Michigan continues to lag behind the rest of the nation in job growth and economic recovery. This is not the time to be talking about proposals that will result in a net loss of thousands of jobs and make it more difficult for low wage workers to escape poverty,” Hofmeyer said.

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