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Tuesday, December 20, 2005

Michigan Minimum Wage Has Buying Power Of 1997 Dollar - New Study

LANSING - Michigan's minimum wage of $5.15 an hour is effectively worth the same as it was when the wage was last increased in 1997, a study by the Michigan League for Human Services contends for a full time worker with no dependents, the $10,712 a year barely covers the poverty line.

But a spokesperson for the Michigan Chamber of Commerce called release of the study a political act from a group hostile to job providers and trying to "take attention from the fact that Governor Jennifer Granholm is a weak and ineffective leader."

The League for Human Services is an organization that has called on the state to provide greater help to the poor.

Michigan's minimum wage was last raised in 1997 from $4.25 to $5.15, and according to the study inflation has eroded the purchasing power of the wage until it is equal to $4.25 an hour paid before 1997.

According to the study, the minimum wage pays for less effectively than any other year except 1955, and is 32 percent less in real terms than the minimum wage paid in 1968. On an inflation-adjusted basis, the study said, the minimum wage paid in 1968 would be the equivalent of $7.54 an hour now.

There are now 18 states and the District of Columbia that require a higher minimum wage, and the study argued that boosting the wage actually helps the economy. A number of states with higher minimum wages rank near the bottom of states in terms of unemployment rates, it said.

But Wendy Hofmeyer of the Michigan Chamber said Michigan ranks near the top in terms of unemployment, and other studies have indicated that boosting the minimum wage could result in as much as an 18 percent drop in jobs.

"Now is not the time to bleed more jobs from Michigan," she said.

If the minimum wage should be raised, then it should be done so on a federal basis, Hofmeyer said.

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com

Author: Staff Writer
Source: Gongwer News Service

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