MIRS: Minimum Wage Cut For 18-19 Year Olds Would Be One-Of-A-Kind In U.S.

Michigan would be the only state in the nation to pay any non-tipped employee over 18 less than the stated minimum wage if the state Legislature follows through with a proposal to include 18 and 19 year olds in the same minimum wage category as minors.

Michigan is currently phasing in a higher minimum wage, which was raised to $8.50 Jan. 1 and will eventually increase to $9.25 by 2018. Beginning in 2019, the wage will be adjusted, according to changes in the Consumer Price Index.
Employees under 18 years of age can be paid 85 percent of that figure or the federal wage under state statute, whichever is greater, and the state offers the option of a $4.25 training wage for the first 90 days of employment for employees aged 16-19.
That $4.25 figure would be raised to $6.25 under SB 0250, sponsored by Sen. Margaret O’BRIEN. The bill would also extend the option to pay 85 percent of the state minimum wage per hour to include 18 and 19 year olds.
In addition to Michigan, four other states have specific situations in which a minor can be paid less than an adult that differ from federal law:
– Illinois, where employees under the age of 18 can be paid up to 50 cents less than the minimum wage. The state’s minimum wage is $8.25, meaning those younger than 18 could be paid a minimum of $7.75 per hour.
– Minnesota, where employees under 18 years of age can currently be paid a minimum of $7.25 per hour — the federal minimum — instead of the state’s minimum wage of $9. Beginning Aug. 1, 2016, both the youth wage and the state minimum wage will increase to $7.75 and $9.50, respectively. Minnesota also has a 90-day training wage for employees under the age of 20 in place that is identical to the youth wage.
– Ohio, where those under the age of 16 can be paid the federal minimum wage of $7.25 an hour. The state minimum wage is $8.10 and is adjusted annually based on the Consumer Price Index. Ohio law also has several stipulations as to what occupations minors can participate in and requires an additional written agreement as to the wages and compensation minor employees receive.
– Washington, where minors under 16 can be paid 85 percent of the state minimum wage. The current minimum wage is $9.47 and increases annually based on a cost of living adjustment, meaning those under 16 could be paid $8.05 an hour.
Even in these states, those aged 18 and older are included in the overall minimum wage, meaning a move such as Michigan’s would be largely unprecedented on the national scale.
O’Brien said she didn’t base her bill on what other states were doing — she crafted it based on concerns she’s heard that it would be harder for some small businesses to accommodate for young people in their workplace now that the minimum wage has increased.
“I haven’t found an apples-to-apples comparison,” she said. “I do know that youth pay the price every time the minimum wage goes up.”
O’Brien said she wants to help encourage businesses to take on young people, who might not yet have experience in the workforce or have difficult schedules to accommodate for based on school and sports. It wouldn’t mean every minimum wage job has lower pay for young people, she said. It’s merely an option for small businesses that might otherwise hire someone else.
“I really believe in young people,” she said. “We need to help them wherever we can.”
But lowering the wages of 18 and 19 year olds doesn’t help at all, said Dessa COSMA, the executive director of the Economic Justice Alliance of Michigan — it would lower the wages of an already vulnerable population and take away their dignity to boot.
Asked if she had met a young person who thought the bill could personally benefit them, Cosma answered, “No.”
Many young people in Michigan don’t fall into a category of privilege that allows them to rely on their parents for support in addition to their own incomes, especially after they legally become adults, she said.
“It seems like age discrimination — it’s a really unwise and unjust way of thinking about how to pay people and how to think about what is the value of a worker in our society,” she said.
There’s likely a good reason no other state has roped 18 and 19 year olds in youth wages, said Frank HOUSTON, who helped lead the charge to raise Michigan’s minimum wage through a ballot initiative in 2014.
“It’s a fundamentally flawed argument to make,” he said. “I think it reeks of discriminatory behavior by a government.”
SB 0250 not only unfairly targets a group of people already struggling with mounting student loan debts and breaking into a competitive workforce, Houston said, but also hits a class of worker generally dominated by women. The state already has a substandard minimum wage for minors, Houston said. It doesn’t need another standard to push even more people below the poverty line.
“It doesn’t seem like the Michigan way to say, ‘Let’s take a bunch of people who are working hard and pay them less,'” Houston said. “When people talk about having a fair economy for people and giving young people a chance to grow, I think this is definitely the wrong message to send.
Houston said the argument that businesses can give young people a chance if they have leeway to pay them less is a farce, adding that savings at the employer level “shouldn’t be at the expense of basic fairness in the economy.”
“If a young person is skilled and able to do a position as someone older than them, hire them,” he said. “But don’t expect to pay them less for it, particularly once they’re a legal adult.”
Prominent business groups in the state have expressed their support, however. When SB 0250 was before the Senate Commerce Committee last year, Justin WINSLOW of the Michigan Restaurant Association said that fewer and fewer young people are getting work experience prior to their 18th birthday — and with 17.5 percent youth unemployment in the state, he said amending state statute could get more young people on the payroll.
The Michigan Chamber of Commerce is also on board with the idea.
O’Brien said she’s happy to listen to more ideas and potentially make changes if something better comes up, but noted that the point is to ensure employers have what it takes to keep hiring young people.
“They love being the first employer, and they want to keep being the first employer,” she said. “But if they can’t make a dime, they can’t do it.”
The Michigan Department of Licensing and Regulatory Affairs, which oversees employment issues in the state, has not taken a position on the legislation, spokesperson Tanya BAKER said.
SB 0250 was moved out of the Senate Commerce Committee and is currently on third reading in the Senate. Although the legislation was on the chamber’s third reading agenda for Dec. 9, it was shelved and was not brought up again prior to the end of legislative session.

Sam Inglot

Progress Michigan
@saminglot / @progressmich
616-916-0574
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