Seventy-Five Percent of Michigan Voters Think Local, Family-Owned Businesses Will Have More Difficulty Adjusting to Higher Minimum Wage

By 3 to 1 margin, voters also say they will tip less if businesses are forced to pay higher costs

For Immediate Release
April 28, 2014
Ted O'Neil
Media Relations Manager

MIDLAND — Three-quarters of Michigan general election voters believe local, family-owned businesses will have more difficulty dealing with a minimum wage hike compared to large chains, according to a new public opinion poll commissioned by the Mackinac Center for Public Policy. And by a three-to-one margin — 54 percent to 18 percent — voters said they will tip less at restaurants as a hike to $10.10 an hour would be a nearly 300 percent increase in business costs for tipped employees.

The poll was conducted April 9, 2014, by Mitchell Research & Communications and included 1,460 respondents, 93 percent of whom said they were “definitely” voting this November. The poll has a +/- 2.56 percent margin of error.

“This poll reflects what the economic evidence already shows — smaller businesses will be most harmed by a mandated wage hike,” said F. Vincent Vernuccio, director of labor policy at the Mackinac Center for Public Policy. “While some larger or luxury businesses may be able to eat the costs, it is the local mom-and-pop shops who will likely bear the bulk of the economic consequences.”

A potential ballot measure in November would ask voters to increase Michigan’s minimum wage from the current $7.40 an hour to $10.10 an hour. Tipped workers, such as wait staff and bartenders, currently have a base wage of $2.65 an hour, provided their tips take them over the minimum. If not, their employer has to make up the difference. The proposed ballot measure would eliminate this distinction and mandate that tipped workers receive a minimum wage of $10.10 an hour, a 280 percent increase over a period of years.

“If the minimum wage proposal is approved as proposed, a greater number of businesses will fail and those that survive will need to change their business model,” said Kevin Kelly, owner of Blackthorn Pub in Holly. “The cost structure will have to be greatly reduced which means fewer employees. All in all nobody wins.”

Only 18 percent of respondents said they would tip more if the minimum wage hike passes. Of the 54 percent who said they would tip less, 24 percent answered “less” and 30 percent said “much less.” Some 26 percent said they would tip the same and 2 percent were undecided.

While 75 percent of respondents said local, family-owned businesses would have more difficulty adjusting to the increase, 11 percent said national or international chains would, while 14 percent were undecided.

“Besides job losses and higher prices, another consequence of this proposal is the harm it may cause to tipped workers,” Vernuccio said. “A recent study by the National Restaurant Association found that nationally tipped workers make between $16 and $22 dollars an hour. The last thing the hard working waiters, waitresses and bartenders of Michigan would want is a pay cut to $10.10 an hour.”

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