Michigan's minimum wage increasing, may bring hardships to businesses

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FLINT (WJRT) - (12/31/15) - The hourly minimum wage in the state of Michigan is rising.

The wage is increasing from $8.15 to $8.50 effective Jan. 1, 2016. That's $14 more a week, or $728 a year for full time workers.

Businesses have been preparing for the change for sometime.

Jim Lyon is the franchise owner of Cici's Pizza in Grand Blanc. He said most of his employees make minimum wage and the added payroll costs come with consequences for small businesses like his.

"When you raise minimum wage, you take away my ability to reward people who are real good workers," Lyon said. "It's going to put more pressure on me to work more hours, to tell you the truth. Some employees will probably get less hours (and) it will force me to employ more minors. When you raise minimum wage, you take away my ability to reward people who are real good workers."

In anticipation of the wage increase, Lyon said he was forced to raise menu prices slightly. He knows it's a delicate matter.

"We raised our prices a mediocre amount in November. We're at a threshold," Lyon said. "I look at it as, I'm a steward of my guests' money, so I don't just spend it recklessly. And I can't just continue to charge (customers) more, because they'll go away."

In the new year, tipped employees in Michigan will earn $3.23 an hour - up 13 cents. Minors ages 16 and 17 can be paid $7.25.

"For the employees, it's going to be a great thing for them to get a raise," said Vanessa Nelson, president of Expert Human Resources in Flint Township. "However, business are going to have some issues."

Nelson works with a variety of companies affected by the upcoming changes. She said while workers may be taking home more money, business could be making cuts to absorb added payroll expenses.

"Perhaps they have a fringe benefit that may not be used and we can cut. Or sometimes the employer will raise the amount of money people pay on their benefits - for instance, healthcare. And sometimes we might have an employee do double duty," Nelson said.

Taj Roy, a Flint resident, is one of those making the minimum. He's a college graduate who's working part-time.

"As a society, we do need to pay everybody a livable wage, which is well above what is currently minimum wage," Roy said.

Roy said he's fortunate to be able to live at home while he looks for a better paying job. He knows first-hand the struggle of trying to make ends meet on minimum wage.

"My mom had to work three jobs to support me and my brothers when we were growing up and we were still dirt poor," Roy said. "She, working as much as she did, deserved better living conditions."

Lyon said he'll re-evaluate his business model after the first quarter of 2016.



 
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