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What's the Difference Between Minimum Wage and Living Wage in Detroit?

By    |   Wednesday, 20 May 2015 05:04 PM

Michigan recently replaced its minimum wage law with the Workforce Opportunity Wage Act, with the minimum wage set to increase to $9.25 per hour by 2018. But does this new act really help the citizens of Detroit when the current living wage for a single adult is $9.92?

The New Minimum Wage Law

According to the Michigan Department of Licensing and Regulatory Affairs, the current minimum hourly wage is $8.15 for regular employees. However, there are exemptions such as tipped employees with a minimum wage of $3.10 and working minors who receive the federal minimum wage of $7.25. These minimums are not set to change until January of 2016, rising to $8.50 per hour.

Urgent: Do You Think the Minimum Wage Should Be Raised?

Michigan’s new minimum wage law was introduced a day after President Obama’s 2014 State of the Union address in which he advocated for raising the minimum wage, both at the federal and state level. There was a lot of skepticism surrounding the bill’s success in the Republican-majority state Senate and with Republican Gov. Rick Snyder.

However, Snyder signed the legislation in May of the same year. This made Michigan the first state with a Republican-majority legislature to raise the minimum wage in 2014. Four other states with Republican legislatures — Alaska, South Dakota, Nebraska, and Arkansas — left the wage debate up to the voters, and the referendums passed.

The Living Wage

This legislation was approved by many lobbying groups and unions, but some still feel this isn’t enough. Michigan League for Public Policy representative Yannet Lathrop told CBS Detroit, “There’s a lot more work that needs to be done on raising wages to make them more of a living wage.”

Vote Now: How Do You Feel About the Minimum Wage?

A study prepared by Dr. Amy Glasmeier at Massachusetts Institute of Technology determined the living wage for Wayne County, the county that is home to Detroit, to be $9.92 per hour for a single adult. Glasmeier’s data includes living wage estimates for many different types of family structures. The highest living wage in Detroit is $31.81 for a single adult with three children. The only affordable living wage, that is a living wage that is lower than the current minimum wage, is $7.93 for two adults with no children.

Although Lathrop argues for even higher wages, she does believe the current Michigan law will help decrease the gender pay gap.

"When you increase the minimum wage, that would actually increase the earnings of women, which over time, that can really help close the gender wage gap," she told CBS Detroit.

Tell Us: Should the Government Raise the Minimum Wage?

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Michigan recently replaced its minimum wage law with the Workforce Opportunity Wage Act, with the minimum wage set to increase to $9.25 per hour by 2018. But does this new act really help the citizens of Detroit when the current living wage for a single adult is $9.92?
minimum wage, living wage, detroit, difference
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2015-04-20
Wednesday, 20 May 2015 05:04 PM
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