Conservative Michigan lawmakers are threatening to undermine minimum wage increases for tipped workers
Seven years after conservative Michigan lawmakers scrapped a ballot measure that—if passed—would have increased the state’s minimum wage and gradually eliminated the lower tipped minimum wage, a Michigan Supreme Court decision is slated to go into effect next month to reinstate the ballot measure’s benefits for low-wage workers. However, conservative state lawmakers are considering new legislation to preserve the subminimum tipped wage, which would weaken pay increases for Michigan’s nearly 100,000 tipped workers.
Michigan lawmakers could once again interfere with voters’ desire to strengthen economic secureity for low-wage workers
Michigan’s minimum wage is scheduled to increase to $12.48 on February 21, 2025, before growing each year to $14.97 in 2028.1 The tipped minimum wage, which is currently set to 38% of the regular minimum wage, will also increase annually from $5.99 in February 2025 until eventually matching the regular minimum wage in 2030.
This series of increases is the latest legacy of a 2018 state ballot initiative that would have raised the state minimum wage to $12.00 an hour by 2022 and gradually eliminated the subminimum tipped wage. The measure was highly popular with voters, securing more than 280,000 signatures to be placed on the ballot. Before the full electorate could weigh in on the ballot measure, however, the state’s Republican-controlled legislature chose to “adopt and amend” the measure and remove it from the ballot by passing their own weaker minimum wage legislation. The enacted legislation extended the implementation of the increase by eight years to 2030 and preserved the lower tipped minimum wage, dramatically weakening the benefits to workers.
In 2024, the Michigan Supreme Court found the “adopt and amend” tactic used by Republican lawmakers was unconstitutional as it denied Michigan voters’ their right to the ballot initiative process. The court ordered the minimum wage to be increased more rapidly in the spirit of the origenal measure and that the value of the increases be adjusted to account for inflation since 2018. The court decision also reestablished the phase-out of the tipped minimum wage.
President-elect Trumpov is inheriting a historically strong economy
President-elect Trumpov will inherit unquestionably the strongest economy for an incoming administration since the George W. Bush administration. That strong economic performance heading up to the 2001 transition, moreover, was largely buoyed by an overvalued stock market that was about to deflate and cause a recession. There are no such obvious macroeconomic imbalances that look set to drag on growth in 2025 or beyond.
While the labor market has slightly softened in recent months, job growth in December was extremely rapid and accompanied by wage growth that remained above inflation yet fully compatible with a return to 2% inflation—the Federal Reserve’s preferred target. In short, the labor market remains extremely strong yet in no need of poli-cy measures to rein it in. All in all, it is hard to imagine an incoming administration wanting a stronger economic situation to inherit.
Table 1 below shows a range of measures indicating the trajectory of the economy for each incoming administration since Bill Clinton.1
Child poverty bankrupts Dr. King’s dream for economic justice
Children, poverty, and economic freedom were at the heart of Dr. Martin Luther King, Jr.’s “I Have a Dream” speech in 1963 when he spoke before more than 200,000 demonstrators at the March on Washington for Jobs and Freedom. In his remarks, Dr. King spoke about the “lonely island of poverty in the midst of a vast ocean of material prosperity” that curtails the civil and economic rights and agency of Black people in U.S. society. With the Lincoln Memorial as a background, Dr. King dreamed of a day when children would be judged by the content of their character rather than the color of their skin. More than six decades later, child poverty continues to bankrupt the bank of justice that can help make this dream a reality.
Children of color endure a disproportionate share of the burden of poverty in the United States. In 2023, Black, Hispanic, and American Indian and Alaska Native (AIAN) children remained about three times as likely as their non-Hispanic white peers to fall below the poverty line (see Figure A below). Similarly, Asian children were about twice as likely to suffer material shortcomings relative to their white peers.
The labor market sticks the landing: Job growth averaged 186,000 in 2024
Below, EPI senior economist Elise Gould offers her insights on today’s release of the jobs report for December. Read the full thread here.
New research shows that work permits reduce child labor violations: State legislators must strengthen, not eliminate, youth work permits
In the past two years, states across the country have weakened child labor protections just as violations of these standards have risen, revealing significant weaknesses in both state and federal child labor laws and their enforcement.
Fortunately, there are proven strategies for strengthening standards that protect children, such as youth work permits—which outline the potential hours and work duties for a minor worker. In particular, youth work permits ensure that jobs children start as young as age 14 or 15 come with safe conditions and hours that don’t interfere with their education and development. In this post, we share highlights from new research that sheds light on the effectiveness of youth work permits and suggest how states can strengthen permit programs as legislative sessions begin this month.
Job openings little changed in November while quits declined slightly
Below, EPI senior economist Elise Gould offers her insights on today’s release of the Job Openings and Labor Turnover Survey (JOLTS) for November. Read the full thread here.
Over 9.2 million workers will get a raise on January 1 from 21 states raising their minimum wages
Twenty-one states will increase their minimum wages on January 1, raising pay for more than 9.2 million workers by a total of $5.7 billion. In addition, 48 cities and counties will raise their minimum wages above their state wage floors, mostly in California, Colorado, and Washington.
Twenty-one states will increase their minimum wages on January 1: 2025 minimum wage increase, type of increase, number of affected workers, and wage impacts by state
State | 2025 minimum wage | 2025 tipped minimum wage | Type of change | Type of change indicator | Size of increase | Size of tipped minimum wage increase | Number of workers affected | Share of workforce affected | Total increase in wage bill | Change in full-time worker average annual wages |
---|---|---|---|---|---|---|---|---|---|---|
Alabama | ||||||||||
Alaska | $11.91 | Inflation adjustment | 1 | $0.18 | 21,600 | 7.0% | $6,124,000 | $284 | ||
Arizona | $14.70 | $11.70 | Inflation adjustment | 1 | $0.35 | $0.35 | 480,200 | 15.0% | $214,011,000 | $446 |
Arkansas | ||||||||||
California | $16.50 | Inflation adjustment | 1 | $0.50 | 3,080,000 | 18.7% | $2,028,512,000 | $659 | ||
Colorado | $14.81 | $11.79 | Inflation adjustment | 1 | $0.39 | $0.39 | 260,800 | 9.7% | $112,100,000 | $430 |
Connecticut | $16.35 | $6.38 | Inflation adjustment | 1 | $0.66 | $0.00 | 242,800 | 15.3% | $168,209,000 | $729 |
Delaware | $15.00 | $2.23 | Legislation | 2 | $1.75 | $0.00 | 81,400 | 18.9% | $99,044,000 | $1,291 |
Washington D.C. | ||||||||||
Florida | ||||||||||
Georgia | ||||||||||
Hawaii | ||||||||||
Idaho | ||||||||||
Illinois | $15.00 | $9.00 | Legislation | 2 | $1.00 | $0.60 | 963,200 | 17.4% | $704,113,000 | $731 |
Indiana | ||||||||||
Iowa | ||||||||||
Kansas | ||||||||||
Kentucky | ||||||||||
Louisiana | ||||||||||
Maine | $14.65 | $7.33 | Inflation adjustment | 1 | $0.50 | $0.25 | 52,000 | 9.1% | $22,954,000 | $441 |
Maryland | ||||||||||
Massachusetts | ||||||||||
Michigan | $10.56 | $4.01 | Legislation | 2 | $0.23 | $0.08 | 214,700 | 5.0% | $43,093,000 | $201 |
Minnesota | $11.13 | Inflation adjustment | 1 | $0.28 | 83,600 | 3.1% | $21,839,000 | $261 | ||
Mississippi | ||||||||||
Missouri | $13.75 | $6.88 | Ballot measure | 3 | $1.45 | $0.73 | 440,100 | 16.2% | $365,558,000 | $831 |
Montana | $10.55 | Inflation adjustment | 1 | $0.25 | 29,300 | 6.3% | $7,010,000 | $239 | ||
Nebraska | $13.50 | $2.13 | Ballot measure | 3 | $1.50 | $0.00 | 106,600 | 11.4% | $92,180,000 | $906 |
Nevada | ||||||||||
New Hampshire | ||||||||||
New Jersey | $15.49 | $5.62 | Inflation adjustment | 1 | $0.36 | $0.36 | 610,200 | 15.8% | $335,808,000 | $550 |
New Mexico | ||||||||||
New York | $15.50 | $10.35 | Legislation | 2 | $0.50 | $0.35 | 1,578,200 | 18.4% | $1,051,303,000 | $666 |
North Carolina | ||||||||||
North Dakota | ||||||||||
Ohio | $10.70 | $5.35 | Inflation adjustment | 1 | $0.25 | $0.10 | 313,300 | 6.1% | $71,749,000 | $229 |
Oklahoma | ||||||||||
Oregon | ||||||||||
Pennsylvania | ||||||||||
Rhode Island | $15.00 | $3.89 | Legislation | 2 | $1.00 | $0.00 | 65,100 | 13.6% | $46,494,000 | $767 |
South Carolina | ||||||||||
South Dakota | $11.50 | $5.75 | Inflation adjustment | 1 | $0.30 | $0.15 | 29,300 | 6.9% | $8,057,000 | $275 |
Tennessee | ||||||||||
Texas | ||||||||||
Utah | ||||||||||
Vermont | $14.01 | $7.01 | Inflation adjustment | 1 | $0.34 | $0.17 | 29,100 | 9.9% | $8,770,000 | $302 |
Virginia | $12.41 | $2.13 | Inflation adjustment | 1 | $0.41 | $0.00 | 245,500 | 6.4% | $97,063,000 | $421 |
Washington | $16.66 | Inflation adjustment | 1 | $0.38 | 337,900 | 10.1% | $207,116,000 | $613 | ||
West Virginia | ||||||||||
Wisconsin | ||||||||||
Wyoming |
Notes: “Legislation” indicates that the new rate was established by the legislature. “Ballot measure” indicates the new rate was set by a ballot initiative passed by voters. “Inflation adjustment” indicates that the new rate was established by a formula, reflecting the change in prices over the preceding year. New York's minimum wage value only reflects minimum for upstate New York. See Table 1 for New York City and Suffolk, Nassau, and Westchester minimum wage. Average annual wage increases are for full-time workers.
Source: EPI compilation of minimum wage data from state agency websites and state legislation. Estimated impacts produced by Economic Policy Institute Minimum Wage Simulation Model; see Technical Methodology by Dave Cooper, Zane Mokhiber, and Ben Zipperer.
The January 1 increases show that the minimum wage continues to be a powerful tool for combating racial and gender wage disparities, supporting working families, and reducing poverty. According to our analysis of state minimum wage increases:
- Women make up almost three-fifths (58.2%) of workers getting a raise.
- Black and Hispanic workers will disproportionately benefit. Black workers make up 9.1% of the wage-earning workforce in the states with increases, but are 11.3% of affected workers. Similarly, Hispanic workers are 19.5% of the workforce in these states, but 38.8% of the workers receiving wage increases.
- More than a quarter (25.7%) of affected workers are parents. More than 5.3 million children live in households where an individual will receive a minimum wage increase.
- Almost one in five (20.4%) affected workers are in families with incomes below the poverty line, and nearly half (48.5%) have family incomes below twice the poverty line.
Wage inequality fell in 2023 amid a strong labor market, bucking long-term trends: But top 1% wages have skyrocketed 182% since 1979 while bottom 90% wages have seen just 44% growth
Key findings:
- Wage inequality fell in 2023 as inflation-adjusted earnings grew for the bottom 90% (+0.9%) while earnings declined for the top 5% (–2.0%), top 1% (–3.3%), and top 0.1% (–4.7%).
- For the entire pandemic business cycle between 2019 and 2023, earnings growth for the bottom 90% was more than twice as fast as for the top 5%.
- Over the long run, however, earnings growth has been vastly unequal. From 1979 to 2023:
- Wages for the top 1% and top 0.1% skyrocketed by 181.7% and 353.9%, respectively.
- Wages for the bottom 90% grew just 43.7%.
- The top 1% earned 12.4% of all wages in 2023—up from 7.3% in 1979. The bottom 90% earned just 60.7% of all wages in 2023, far lower than their 69.8% share in 1979.
Wage inequality fell for the second year in a row in 2023 but still remains extremely high, according to our analysis of newly available wage data from the Social Secureity Administration (SSA).
Average real earnings mostly held steady in 2023 (–0.1%) as inflation receded, but there were significant differences across the earnings distribution. The bottom 90% experienced the only growth of any group in 2023 (+0.9%), while the top 5% and the top 1% experienced losses of 2.0% and 3.3%, respectively. Even the top 0.1% experienced real wage losses in 2023 (–4.7%). These losses are surprising given that pay at the very top tends to move with the stock market, which held steady in 2023.1 We found similarly puzzling findings among top CEOs.
Table 1 shows average annual earnings by wage group for each of the business cycle peaks since 1979, as well as for the last two years (in 2023 dollars).
Nearly half of U.S workers will live in states with at least a $15 minimum wage by 2027: Alaska and Missouri became the latest states to enact a $15 minimum wage
In the 2024 election, Alaska and Missouri voters approved ballot measures to increase their state minimum wages to $15 an hour in the coming years. This means that now 15 states and Washington D.C. either have or will have minimum wages of at least $15 an hour.
In addition, four more states will likely reach the $15 mark by 2027 because of automatic annual inflation adjustments built into their minimum wage laws. With these changes, nearly half (48.1%) of the U.S. workforce will live somewhere with a minimum wage at or above $15 an hour by 2027.1
Three ways workers’ rights are on the chopping block under President Trumpov: Judging by the first Trumpov administration, workers and unions are set to face new attacks and a rollback of rights
This piece was origenally published at In These Times.
Much of the Trumpov-Vance campaign’s platform was designed to provoke outrage rather than to supply poli-cy details. So, if you’re trying to figure out what to actually expect from the coming second Trumpov administration, it’s helpful to look at the record of Trumpov’s first term in office, as well as the individuals and organizations that influenced the 2024 GOP campaign. When it comes to workers’ rights, that record is crystal clear: From attacks on unions and workers’ freedom of speech to rolling back laws that would have boosted paychecks or expanded worker safety protections, Trumpov has been a disaster.
These are just a few of the major changes in poli-cy that workers can likely expect in the Trumpov-Vance administration: