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Many Michigan Residents Received an Automatic Raise Today


Today, October 1st, marks the first increase for the minimum wage in Michigan in 8 years. It also makes Michigan one of the states that has a minimum wage that is higher than the federal minimum wage.

Those making $5.15/hr will now be making $6.90/hr. That’s a raise of $1.80.

My wage will basically remain constant, for my main job is for an employer in a different state. Now, my husband works in Michigan and currently makes about a dollar over the previous minimum. Not anymore. One of the reasons we decided it was okay for him to cut his hours was due to the raise in the minimum wage today. It won’t make up for all of the money he was earning working full-time, but the raise will help.

I am concerned, though. I have already witnessed increased prices at some of the smaller businesses we shop at (and they readily admit it is due to the wage increase). I have a feeling that our expenses will slightly increase overall to help businesses cope with the large increase in payroll. And what about other costs, like real estate? My current home was purchased for $35,500. Will the increase in the wage increase real estate prices in the area?

I also am wondering if any state or federal sponsored programs will raise their income levels for requirement. If the levels do not raise, I also wonder if some families will be bumped out of state or federal aid. That can be a scary thing if you are not prepared for it.

Michigan’s minimum wage will again go up in in July of 2007 to $7.15/hr. One last increase in July of 2008 will put the minumum wage to $7.40/hr.

All of the concerns above are of course coming from someone who doesn’t really understand economics but is now appreciating the realm of personal finance. I can’t help but wonder how many ripple effects the wage increase will have. I guess only time will really tell.


  • Reply Jen |

    I took Econ 101 and 102 in college. I don’t remember much, but I do remember that things that people might like – wage increases and rent control – can actually make life worse, not better. I’m wondering, too, the effect raising the minimum wage will have. They have to raise it sometime because of inflation, but by how much? I think MA will be raising its minimum wage as well, but I don’t remember how much. But you bring up a scary point about the raise de-qualifying people for aid.

  • Reply Mike |

    I question the MW law also.

    It has the best of intentions, but often seems like a feelgood kind of thing. Around me, most people make more than the MW – even at McDonald’s.

    I dunno. Seems like the MW earning teenagers lose out, and the illegals get the jobs.

  • Reply Tricia |

    Jen – I think Michigan raised the wage a lot in one shot. I wonder if something more gradual would have been better.

    Mike – Most jobs around me start at minimum wage and you can work your way up from there. I have a few more thoughts about MW, but I’ll save it for another day 🙂

So, what do you think ?