What to know about the Michigan minimum wage law before the Supreme Court

Update: Michigan Supreme Court hears debate on minimum wage, sick leave laws

The Michigan Supreme Court will hear arguments Wednesday on the legality of a Republican maneuver last year to adopt a minimum wage hike, only to gut the law later in the legislative session.

Last September, the GOP-led Michigan Legislature passed a measure raising the state minimum wage to $12 an hour by 2022. But lawmakers had no intention of allowing the proposal to take effect as written. Instead, they amended the law in December’s lame-duck legislative session by, among other things, delaying the full wage hike until 2030, eight years later than intended.

Republicans and the state’s business establishment argued the change was necessary to preserve Michigan’s economic recovery. Democrats and labor advocates countered that the tactic prevented state voters from weighing in on — and likely passing — the original proposal and violated the spirit of the ballot effort.

The GOP-led Legislature asked the state Supreme Court to issue what’s known as an advisory opinion, offered outside the traditional litigation process, to address two unresolved issues: Is the Republican-adjusted law constitutional? And are lawmakers allowed to adopt a citizen-initiated proposal and later change it during the same two-year legislative term?

The same questions apply to Republican efforts to change a separate ballot question on earned sick time benefits for Michigan workers. Similarly, the state Legislature adopted a progressive ballot proposal to provide sick time benefits, only to roll back many of those protections in December.

Related: Paid sick leave: What to know about the Michigan law before the Supreme Court

The court’s opinion, should it decide to issue one, could end the uncertainty that has hovered over both issues for more than half a year. Or, it’s possible the debate could wind up back in court, this time challenged in a lawsuit.

Meanwhile, employers have said they remain unclear about which version of the minimum-wage law they should follow — the Republican changes they prefer, or the original version as drafted by a ballot committee, a proposal that also phases out a lower wage paid to employees who collect tips as part of their job.

How did we get here?

At the start of 2018, Michigan’s minimum wage was $9.25 an hour.

As the year unfolded, a progressive group called Michigan One Fair Wage collected enough signatures to get a measure on the November ballot that would, among other things, raise the state’s minimum wage to $10 an hour this year, to $12 by 2022, and rise with inflation after that. The petition also extended that higher wage to tipped workers, such as restaurant waiters.

In September, the Legislature adopted the provisions of the ballot measure. Why would Republicans do such a thing when they had little appetite for the proposal? It turns out, they passed it to weaken it.

Had voters been given a chance to approve the measure, the Legislature would have needed 75 percent approval in both the House and Senate to later amend the law. But if the Legislature adopted the proposal before voters could weigh in, lawmakers could later change it by a simple majority vote.

Which is exactly what they did. In last year’s lame-duck session, Republicans rolled back the wage increases. Then-Gov. Rick Snyder, a fellow Republican, signed them into law, saying the amendments were necessary to continue Michigan’s economic recovery.

Now, instead of a hike to $10 this year, the state minimum wage rose to $9.45. It will not rise to $12 (actually, $12.05) until 2030. Employers also can continue to pay employees who collect tips a fraction of the full minimum wage paid to all other workers under the GOP-adjusted law.

Advocates for the original petition called the GOP’s amendments unconstitutional, saying the Legislature cannot adopt a citizen proposal and amend it in the same two-year session. They vowed to sue if necessary to get the original legislation implemented.

A Democratic state senator asked Attorney General Dana Nessel, a fellow Democrat, to weigh in on the matter. Nessel declined, citing the pending review by the Michigan Supreme Court.

What are the main questions for the court?

The two central questions in this debate:

• Whether the state constitution allows the Legislature to adopt, and later amend, citizen-initiated legislation in the same two-year session, and

• Whether the minimum wage and paid sick leave laws the Legislature adopted and amended in 2018 are constitutional.

Wednesday’s arguments likely will hinge on whether the Legislature’s authority must be explicitly spelled out in the state constitution, or whether the absence of specific prohibitions permits such actions, according to legal briefs submitted to the Michigan Supreme Court in recent weeks.

Republican lawmakers and statewide business groups argue the Michigan constitution is silent on when the Legislature can amend citizen legislation — and in the absence of a prohibition, their actions didn’t violate the law.

Attorneys representing Democratic lawmakers, ballot committees that circulated both the minimum wage and paid sick leave petitions, and a number of labor unions and progressive groups argued the contrary.

The constitution grants the Legislature three options, they contend: Enact the proposal as written; reject the proposal and send it to a statewide vote; or propose a separate law and send both versions to a statewide vote.

“The Legislature passed the proposals not because it agreed with them, but for the exclusive purpose of gutting them with amendments in its lame duck session, thereby depriving the people of the opportunity to vote on them,” wrote attorneys for ballot committees Michigan One Fair Wage and MI Time to Care, which backed the sick leave proposal.

“If permitted by the Court this unprecedented ‘adopt and amend’ scheme heralds the end of the people’s 110-year-old constitutional right of statutory initiative in Michigan.”

What could the court decide?

There are several possible paths forward. The Michigan Supreme Court could conclude the legislative amendments were constitutional, or unconstitutional. The court also could decline to offer any opinion at all.

It’s difficult to predict what the court will do, said Mel Topf, a professor at Roger Williams University in Rhode Island and author of the book “A Doubtful and Perilous Experiment: Advisory Opinions, State Constitutions, and Judicial Supremacy”

“I wouldn’t be surprised if they did issue an opinion,” he told Bridge. But, on the other hand, Michigan’s constitution says the court can “only entertain a bill or a law that has been passed, but has not yet been put into effect.”

Since the minimum wage amendments went into effect at the end of March, the court “could use that as a basis for rejecting the request to give advice.”

The legislature’s request for a court opinion was made in February, before the law took effect.

The Supreme Court rarely issues advisory opinions and has rejected more requests than it has granted over the past decade, according to the court.

The last time the court granted such a request was in 2011, replying to Snyder’s inquiry about the constitutionality of a new tax on some retirement income.

Past Supreme Court opinions have noted that advisory opinions don’t set precedent the same way as an opinion issued through the traditional litigation process. It’s possible that the issue still could be challenged in a lawsuit, depending on the outcome at the high court.

Both sides say they are confident in their legal positions. 

Any real clarity for Michigan’s workers and businesses is likely a long way off.

John Chamberlin, a professor emeritus of public policy at the University of Michigan, told Bridge that a lawsuit, if it comes to that, could take “a couple years” to work its way through the courts.

What has been the impact of minimum wage increases in other states?

Research is mixed on the effects of raising the minimum wage.

Some recent studies have found that higher base wages have raised earnings for low-income workers more than they have contributed to large-scale job losses.

The Congressional Budget Office this month released a study of the effects of raising the federal minimum wage, last set at $7.25 per hour in 2009, as Congress debates legislation to raise the federal base to $15 per hour.

At $15 per hour, 1.3 million American workers would lose their jobs by 2025, according to the federal budget office, though it noted “there is about a two-thirds chance that the change in employment would lie between about zero and a reduction of 3.7 million workers.”

Yet a $15 minimum wage also would mean higher wages for 17 million Americans, its analysis showed.

It is difficult to say with certainty how raising the minimum wage alone affects earnings and employment, given that wages and employment naturally also are influenced by other economic conditions, said Charles Brown, an economics professor at the University of Michigan who has studied the minimum wage for decades. That explains some of the disagreement among researchers.

In the short term, it appears that several recent studies have aligned around the notion that the number of workers who see their wages rise will be greater than the number who lose their jobs, Brown said. He added that the consensus doesn’t appear as clear when studying what would happen if the minimum wage is sustained at a higher rate over a longer period.

As an example, he said, if the minimum wage were to jump from $10 to $12 per hour, higher pay could lead to a reduction in turnover as people in those jobs decide to stay in them — a positive impact for them.

“It’s not a positive change if you’re somebody looking for a job, because if you’re looking for a job, you’re rooting for everybody else to quit theirs,” Brown said.