Youth Minimum Wage: Defying National Trend, Michigan Considers Cutting Hourly Pay By Nearly $2 For Young Workers

Wage hikes are in style these days. More than a dozen states enacted minimum-pay increases last year, and now cities nationwide are fueling the trend, shaping the once far-fetched demand of $15 an hour into a serious political possibility, and, in cases like Los Angeles, an outright reality. The private sector has joined in, too, as notoriously low-wage retail companies such as Wal-Mart Stores Inc. and Target Corp. put forth some minor pay increases. Against all this -- policy changes, political wisdom, the winds of the labor market -- Michigan is eyeing a step in the other direction.

The Michigan Senate is considering a proposal that would extend the state’s youth minimum wage, at present $6.29 an hour and covering only those 16 and 17 years old, to include employees ages 18-20, who are currently entitled to receive the statewide hourly minimum of $8.15. In real terms, that's a pay cut: If the proposal became law, workers aged 18 to 20 would earn the federal minimum of $7.25, since state rates cannot undercut the federal one. (The state’s youth hourly minimum rate is 85 percent of either the federal or state pay floor, whichever is higher.) Approved by a committee last week, the bill awaits action by the full Senate, where Republicans hold a comfortable majority.

While the proposal is certainly trend-bucking, it’s not unprecedented. This year, South Dakota created a special, lower hourly pay rate for employees under 18. Nebraska legislators considered a similar proposal, although it ultimately failed to muster enough support. Michigan’s bill is substantially larger in scope than what was proposed in Nebraska or South Dakota, as it applies to people over 18 -- the age at which people can legally marry, vote and serve in the military.

Proponents such as the Michigan Chamber of Commerce and Michigan Restaurant Association say the measure would make it easier for young people to gain footholds in the job market. But critics say it’s illogical and exploitative.

“We’re all the sudden taking people who have reached the age of adulthood, who have graduated high school, who are in college, who are struggling to pay their bills and struggling with the increased cost of college, and saying to those people that ‘We can pay you less,’ and to me it makes no sense,” Democratic state Sen. Curtis Hertel Jr. told the State News, a student newspaper at Michigan State University.

Under Republican control, the Wolverine State has advanced a number of business-backed measures that have rankled labor advocates. In 2012, Gov. Rick Snyder signed into law a so-called right-to-work provision, banning contracts between employers and unions that authorize the latter to deduct fees from nonmembers. This year, legislators voted to repeal the state’s prevailing-wage laws that require construction contractors doing business with the government to pay workers at predetermined levels that are supplied by public authorities. Another bill proposed this year would ban cities and towns from adopting labor standards that are more stringent than existing state regulations, such as in terms of higher minimum wages or paid-leave policies.

This post has been updated to clarify that if the proposal became law, employees aged 18 to 20 would earn the federal minimum of $7.25.