Michigan’s Minimum Wage Hike: Boost for Workers, Challenge for Restaurants?

Michigan's minimum wage jumped from $12.48 to $13.73 per hour on Jan. 1. Thousands of workers across the state felt the impact. Tipped employees saw their base pay climb to $5.49 per hour, which equals 40% of the minimum wage.

Workers supporting families amid climbing costs welcomed the boost. Halisa Brown serves tables at Kerby's Koney Island in Southfield.

"I have a big family, I have a family of five. Kids are expensive, I'm expensive by myself so, even when you're trying to budget and cut down stuff is still expensive so, yeah it helps," Brown said according to WXYZ.

Michael Greiner teaches business at Oakland University as an associate professor. He thinks the wage bump helps workers and the wider economy.

"This is something though that actually will put money in the pockets of people, it will be money that people tend to spend, because people who are at or around the minimum wage they tend to have not a lot of discretionary income so they tend to spend everything that they get," Greiner said.

The Michigan Restaurant and Lodging Association warned the bigger minimum wage will squeeze restaurants hard. They noted that operators confront a 30% increase in the standard minimum wage alongside a 37% increase in the tipped minimum wage from last January. Restaurant revenue is projected to stay flat in 2026.

"For many, the reality is setting in that they will be forced to either cut labor or raise menu prices to keep their doors open, knowing full well that affordability is the number one concern on the mind of most consumers right now," the association stated.

The wage increase represents part of a plan that will push minimum wage to $15 per hour by 2027. Greiner said the increase happens slowly to prevent sudden shocks on employers and their ability to bring on new employees.