Michigan Democrats want cities to decide how much private employers pay

• The bill would allow local officials to set their own wage and benefits policies
• Democrats, unions support the bill for allowing locals to require higher wages to attract more workers
• Republicans, trade groups fear local mismanagement, confusion for businesses

LANSING — Cities and townships in Michigan could require private businesses to set higher minimum wages, offer paid sick leaves or provide fringe benefits under a bill championed by Michigan Democrats.

House Bill 4237, sponsored by Rep. Joey Andrews, D-St. Joseph, would repeal a 2015 Republican-backed law that prevented local governments from regulating private businesses’ wage and benefits.

Democrats, union groups and some local officials applauded the legislation during a jam-packed House Labor Committee hearing Thursday. They argued the 2015 law — dubbed the “Death Star Bill” by the liberal group Progress Michigan — crippled local communities’ ability to protect worker benefits and raise wages to attract talent.

Related:

• Michigan lawmakers OK early voting, conversion therapy ban, Juneteenth holiday
• Beer o’clock may beckon at Michigan college sports stadiums under new bill
• Michigan moves to adopt early voting; Republicans say efforts go too far

“Restoring local control will give power back to working people and the local leaders they elected to represent them,” Ron Bieber, president of the Michigan AFL-CIO, said in a Thursday statement.

Republicans and business groups arguing the legislation would make it hard for businesses with multiple state locations to keep track of different local laws. They predicted the legislation would deter businesses from Michigan.

“If you end up losing a bunch of jobs, it’s the unintended consequences,” said Amanda Fisher, state director of the National Federation of Independent Business in Michigan. “It makes us look mean, but it’s the reality because you can’t pay with money you don’t have.”

The bill would allow cities to set minimum wages that exceed the state’s $10.10 per hour, a rate that could grow to $13.03 this year, depending on the outcome of a case pending before the Michigan Supreme Court.

A total of 44 states, including Michigan, have passed laws barring local labor laws since 1984, according to an analysis by the liberal think tank Economic Policy Institute. 

In recent years, some states have introduced legislation to repeal those laws. In 2019, Colorado became the first to repeal a 1999 law that prohibited local governments from setting a higher minimum wage than the state did. 

Michigan would become the second state to do so if the bill is approved, Andrews told Bridge Michigan.

Rep. Mike Mueller, R-Linden, argued Thursday the bill would risk giving poorly managed cities more autonomy. Businesses could leave cities with higher minimum wages, reducing those cities’ tax base and causing municipalities to file for bankruptcy, he argued. 

“Sometimes locals bite off more than they can chew,” Mueller said, noting Flint, Detroit and Benton Harbor were all put under state control for financial emergencies. The city of Detroit filed for bankruptcy in 2013, becoming the first Michigan city to ever do so. 

“When you get upside down, it comes back to the state to bail people out,” Mueller said.

Amy Drumm, senior vice president of government affairs at the Michigan Retailers Association, called the bill a “compliance nightmare.” 

Businesses could be confused whether the wage and benefits policies should be based on the location of the headquarters or where employees work, said Marcus Keech, director of government affairs at the Grand Rapids Chamber of Commerce. 

Andrews countered the wage and benefit policies follow the location of the businesses instead of employees. Additionally, he said big corporations would have enough manpower to track local policies, and smaller businesses would have a smaller footprint.

Andrews argued the 2008 recession largely accounted for the financial crisis Flint, Detroit and Benton Harbor experienced in the 2010s. 

“A lot of these cities, they were already on shaky ground,” he told Bridge. “Wage setting and benefits setting is not going to bankrupt (cities) to the point that was made in the hearing today.”

Andrews acknowledged the potential of mismanagement at the local level, but said it would be much easier for local voters to vote out bad actors during local elections than changing the dynamic of the state Legislature. 

Berrien County Commissioner Chokwe Pitchford, a Democrat, told lawmakers on Thursday that Republican opposition to Andrews’ bill was “devaluing” local officials and assumed they aren’t capable of making “good decisions.”

Warren City Councilmember Angela Rogensues said the bill would give local officials more flexibility to set higher wages or provide more incentives for young talents.

“Our city desperately needs younger folks,” said Rogensues, a fellow Democrat. “Any economic opportunity that we could provide … for younger people to come in and buy homes would be an incredible opportunity for the city board.”