For Michigan workers and those who advocate on their behalf, there’s a lot to be happy about this Labor Day (and it’s not just because it happens to be my birthday this year).
The state has continued to make important investments in a variety of programs and services to help workers. A longstanding fight for a better minimum wage and improved paid sick leave is closer to being resolved and currently stands in workers’ favor.
And there’s bipartisan political support, diverse organizational support and significant state revenue available to address one of the Michigan League for Public Policy’s marquee items on our worker wish list: increasing the state Earned Income Tax Credit (EITC).
Budget wins for workers
The bipartisan Fiscal Year 2023 state budget included a number of big wins, including continued funding for several successful programs to support Michigan workers.
The MI Tri-Share Pilot Program received $2.5 million in ongoing funding and Going PRO and Michigan Reconnect each received $55 million.Gov. Gretchen Whitmer and the Legislature dedicated $240 million to grant programs for economic development and workforce development, supporting training initiatives in key industries and preparing workers for apprenticeships in the skilled trades.
The budget also included $10 million for the state’s Barrier Removal Employment Assistance (BRES) Program. Administered by local Michigan Works! agencies, BRES helps workers struggling to return to the labor force by providing financial support to remove barriers to work, including helping pay for car repairs and transportation needs, childcare, work clothing and tools and more.
New hopes for minimum wage increase, paid sick leave
Four years ago, workers were on a financial and emotional roller coaster with the fluctuating fate of proposals to increase the minimum wage and expand paid sick leave in Michigan. But right now, workers have a reason to be optimistic.
In 2018, the Michigan Legislature passed bills with wording identical to the two initiatives in order to keep them off of the ballot, only to later change the new laws to greatly reduce their intended impact.
But advocates at Mothering Justice and Restaurant Opportunities Center-Michigan didn’t give up the fight and legally challenged the Legislature’s “adopt and amend” maneuver. And after a long wait, this July, a Court of Claims judge ruled that the move violated the state constitution and that state law should revert to the initial language.
While the original paid sick leave proposal would have required all workers to be covered, the amended law exempts employers with fewer than 50 employees — leaving out a large part of Michigan’s workforce.
The original minimum wage proposal would have raised Michigan’s regular minimum wage to $12 an hour by 2022, but the amended one does not raise it to that level until 2030. The initial proposal would also have raised the minimum wage for tipped workers to the level of the regular minimum wage by 2024, while any increase to the tipped wage was left out of the legislation.
The Court of Claims judge delayed implementation of the positive ruling until February 2023, and the Michigan Legislature has since appealed the suit to the Michigan Supreme Court. While the fate of these proposals is still in flux, workers have reason for hope that wherever the legal process goes, the original intent of the initiatives and the Michigan voters who signed those petitions will be upheld.
Unfinished business on state EITC increase
But as we scan the workforce policy landscape, there’s a big piece of unfinished business: increasing the Michigan Earned Income Tax Credit (EITC).
The proposal has bipartisan support and would benefit workers, businesses and communities alike. Increasing the EITC will help encourage workforce participation and enable workers with lower incomes to keep more of their earnings, to the tune of around $600 more per credit.
The proposal has widespread, cross-sector support from the League and nearly 100 business, advocacy, faith and nonprofit organizations. The governor and Republican-led Legislature have both previously indicated their support for increasing the state EITC, and have around $7 billion in additional state revenue to work with for this and other policies to support workers and families.
The 2023 state budget showed that the Legislature and Gov. Whitmer can find common ground to support Michigan workers, and increasing the EITC is a perfect, permanent way to continue that effort. It is a policy they agree on in principle, and it will have a maximum impact at a minimum cost compared to other tax changes.
Both sides just need to make it a priority during investment negotiations.