In July of this year, Michigan state Democratic Party chairman Mark Brewer proposed a plan that would, among other things, raise the minimum wage to $10. As of right now, state democrats are polling potential voters on this issue to decide if it’s worthwhile to pursue. Soon, when their polling is done, if they learn that enough people would support it, they’ll pursue a petition to get it on the November 2010 ballot.

While this may seem like a good idea during the current economic recession, the Michigan Chamber of Congress said it would raise employer’s costs and ultimately force them to cut jobs.

According to the United States Department of Labor, Michigan has the worst unemployment rate in the nation with 15.3 percent, far above the national rate of 9.8 percent and two points higher than the next closest state, Nevada, with a 13.3 percent unemployment rate. Raising the minimum wage by $2.60 from the current $7.40 would only increase Michigan’s unemployment even more. If businesses are paying workers higher wages, they need to make up that lost profit up somehow, and some of that could be through laying off workers.

In October of 2006, the state began gradually raising the minimum wage to where it is today. According to www.mi.gov, the unemployment rate in September before the minimum wage rose was 7.1 percent. Today, it’s more than doubled. Increasing the minimum wage has done nothing to help unemployment in the past.

Another possibility to make up lost profit would be to raise prices. At McDonalds, most of their workers are paid minimum wage. This is so they can offer their product at low prices. I don’t know about you, but I like the bang I get for my buck off the dollar menu. But if they’re losing money through higher wages, they’re going to pass those costs on to you, the consumer.

We’ve already seen other companies raise prices in response to higher production costs. When gas prices were hovering at all time highs, we saw the prices of things like milk rise. This was because the companies that manufacture the milk had to spend more money to produce their product in order to make up for the lost profits.

So how can we turn our state around? One of the most important things is to promote economic growth. In order to do this, we need to help out business and attract more from out of state. These businesses will in turn employ Michigan residents, creating more jobs and injecting more money into the economy.

Lower taxes mean lower operating costs and more profits for a business. Look at how well it worked with the film industry. They received tax incentives to do their work here, and they’ve come in great numbers.

Brewer’s plan is meant to get votes for his party during next year’s election. It would ultimately worsen Michigan’s economic situation. It would promote an anti-business climate at a time when we need business to innovate and help us out of this mess.
Hopefully, Michigan’s voters will see that this plan will come at a price and reject it.