Michigan Supreme Court Denies Ballot Access to Minimum Wage Hike Initiative

Fast food workers and union members carry signs as they stage a protest outside of a McDonald's restaurant in Oakland, Calif., on Feb. 12, 2018. (Justin Sullivan/Getty Images)

The Michigan Supreme Court dismissed an effort to put up a ballot question for the November elections which sought people’s views on raising the hourly state minimum wage to $15.

In 2022, the Michigan Board of State Canvassers approved a summary of a petition pushed forward by an activist group Raise the Wage MI that wanted to increase the minimum wage in the state to $12 per hour in 2024, which then rises annually to $15 per hour in 2027. Based on this approval, the group canvassed for signatures and later approached the board for further approval of the petition so it could be put before voters on the November 2024 ballot.

However, the board refused to approve the petition, claiming that the proposal’s wording had changed from the initial approval. Raise the Wage MI approached the court to intervene in the matter.

The group claims that their effort to increase minimum wages would benefit one million workers in Michigan.

“In Michigan, the subminimum wage for tipped workers is just $3.67 an hour, which leaves many workers, largely women, immigrants, and people of color subject to harassment, discrimination due to the reliance on tips,” it said. Michigan’s minimum wage rate for 2024 is $10.33 per hour, while the tipping rate is set at $3.93 per hour.

In a May 31 order, the Michigan Supreme Court in Lansing denied Raise the Wage MI’s request. The court pointed out that the initial petition had reduced the number of employees required to trigger the minimum wage laws from two to one. The proposal’s earlier summary stated that the measure raises minimum wages for “all employees.” This proposal was accepted by the board.

However, after receiving the initial approval, Raise the Wage MI circulated a petition stating that the minimum wage law would be applicable only to employers with “21 or more employees,” the court noted. The board declined the reformed petition.

Raise the Wage MI claimed the board was obligated to certify the new petition. The court pointed out that the initial petition must be a “true and impartial statement” of questions that appeared in the final petition, and thus denied Raise the Wage MI’s challenge to the board’s decision.

“Given that plaintiff’s submission to the Board did not include the same petition language used to obtain preapproval of its summary, plaintiff failed to convince a majority of the Board to approve its petition. On this record, plaintiff has not met the high burden of showing a violation of a clear legal right as is required to obtain mandamus relief,” it said.

The court observed that the final petition would have eliminated minimum wage rights for thousands of employees rather than raising it. However, it stopped short of taking a position on the issue of whether the board decision was correct or false.

Minimum Wage Issues

In the order, the court also noted that the initial petition would have eliminated “any recognized difference” between tipped and non-tipped labor. Once minimum wage laws set in, employers would be required to ensure that workers get the minimum wage.

“Over the course of time, this would very likely serve to eliminate tipping as a primary source of income for many workers, specifically those who make entry level or near minimum wages,” the court said.

The order cited a 2022 survey conducted by the Michigan Restaurant & Lodging Association (MRLA) according to which 91 percent of restaurants said they would offset higher minimum wages by raising menu prices and room rates. Fifty-eight percent said they would lay off employees and 39 percent stated they may look to sell their business.

The court cited another survey to claim that a majority of tipped employees were concerned they would make less if wages were earned through employer payments rather than customer tips.

“Whether the petition was wise, or worthy of passage is entirely a question of policy, properly left in the hands of the Legislature and democratic processes,” the order stated.

The MRLA, which had intervened in the case and filed an amicus brief arguing to keep the proposal off the ballot, welcomed the court decision.

MRLA CEO Justin Winslow said they were “relieved” that the court found the group’s revamped petition was “fatally flawed.”

The ruling will offer “some solace to the nearly 500,000 industry employees and nearly 20,000 operators that they can return their focus to serving up Pure Michigan hospitality to millions of Michiganders every day.”

The issue of minimum wage is a hotly debated topic. The minimum federal wage is $7.25 per hour. Twenty-two states were scheduled to raise their state minimum wages this year.

Holly Sklar, CEO of Business for a Fair Minimum Wage, pointed out that the $7.25 per hour federal minimum wage has been in effect since 2009 and is a “poverty wage” rather than an “anti-poverty wage.” She claimed raising minimum wages would “strengthen businesses.”

“Minimum wage increases don’t stay in workers’ pockets. They boost the consumer spending that drives business and the economy … Fair wages also help businesses hire and retain employees and deliver the reliable product quality and customer service that leads to repeat customers instead of lost customers.”

However, multiple studies warn the opposite. A June 2023 study found that raising minimum wages by $2.50 per hour resulted in a 14 percent increase in homelessness.

“To the extent minimum wages cause disemployment of low-skill workers, the lost job can exacerbate existing economic insecurity and lessen ability to pay for housing,” it said.

In 2019, the Congressional Budget Office warned that raising the federal minimum wage to $15 by 2025 could cause 1.3 million Americans to become jobless.