May 21, 2014 at 1:00 am

Business owners at House hearing rip plan to raise Michigan's minimum wage

Lansing – — Restaurateurs and other small-business owners objected Wednesday to automatic cost-of-living increases in a Senate-passed bill that would gradually boost Michigan’s minimum wage to $9.20 an hour.

Tom Bramson, head of a company that owns several Lansing-area restaurants, called the provision “ludicrous” at an opening hearing on the minimum wage bill by the House Government Operations Committee. The Michigan Chamber of Commerce also has objected to the provision.

“It’s been shown in other states that indexing (minimum wage increases to the rate of inflation) does not work,” added Mt. Pleasant restaurant owner Jim Holton, chairman of the Michigan Restaurant Association.

That emerged as the top point of contention in the Senate-approved bill, intended as a compromise to head off a ballot proposal that would hike the minimum wage to $10.10 an hour over three years.

Senate Democrats insisted on adding the indexing mandate into the finished legislation when Senate Majority Leader Randy Richardville, R-Monroe, brought the bill to the floor last week for a vote. The bill received bipartisan approval in a 24-14 vote.

Petitions are being circulated by Raise Michigan, whose leaders say they already have enough signatures to qualify their plan for $10.10-an-hour wage for the Nov. general election ballot. Their proposal also would boost in increments Michigan’s minimum $2.65-an-hour wage for workers whose main income comes from tips to $10.10.

Restaurant owners said a $10.10 rate would devastate their industry. They said Wednesday their employees already earn more than the current $7.40 an hour minimum wage — as much as $15 or $20 an hour by food servers when tips are included.

The Senate bill would raise the tipped minimum wage to $3.50 an hour.

Business owners who testified before the committee seemed prepared to accept the proposed minimum-wage hikes to avoid a ballot proposition boosting it even higher. Bramson also said the Senate bill “is too much too fast.”

GHeinlein@detroitnews.com
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