Acton Institute Powerblog

In Michigan, Raising The Minimum Wage Hurts The Most Vulnerable

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If you’re blessed, your job is more than just a paycheck. It’s a structure for your life, it’s a place of friendship and camaraderie, and a sense of purpose. At least, it was for Stacy Osborn.

Osborn had been working at Tastes of Life, a Hillsdale, Michigan, restaurant that also supported a residential program, Life Challenge of Michigan. The restaurant was owned by Pastor Jack Mosley and his wife, Linda.

Mosley explained that, unlike a typical business that might fire a chef with a hot temper “who breaks dishes,” Tastes of Life managers were more long-suffering and wanted to help employees polish their life skills.

“Life has issues,” Mosley said. “This was a place to shore them up, and help them cope and get through.”

So why isn’t Osborn working there anymore? Because Tastes of Life couldn’t afford to stay open after the state of Michigan raised its minimum wage. Mosley said he figured he’d have to bring in 200 more customers a week in order to stay open.

Michigan unions threatened they’d sponsor a ballot initiative to raise the minimum wage to $10.10 an hour. To keep the question off the ballot, the Republican-controlled legislature passed a compromise. Before September 1, 2014, the minimum wage in Michigan for regular employees was $7.40 and for tipped workers was $2.65. The new law raised the wage to $8.15 and $3.10, respectively. It will increase incrementally until 2018, when it will be $9.25 and $3.52.

“I did the math and realized I would need 200 more customers a week to stay open,” Mosley said.

That, accompanied by the fact that many of their customers go south for the winter and food prices have risen dramatically, forced Mosley to close doors. Twelve people lost their jobs.

Other businesses in the area have put a freeze on hiring and have raised prices in order to compensate for the minimum wage hike. Some, like the Mosleys, simply can’t compete. And that means those with the most to lose are left with fewer options. Some lose their jobs. Those who keep their jobs have a pay increase, but may have their hours cut. They also have to deal with the increase in the cost of consumer goods that comes along with the minimum wage hike.

Tell us again, who was the minimum wage hike supposed to help?

Read “Low-Income Workers: Raising The Minimum Wage Ruined Our Lives” at The Federalist.

Elise Hilton Communications Specialist at Acton Institute. M.A. in World Religions.

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