Lawmakers increase minimum wage to $9.25, impact of increase on student jobs uncertain
As lawmakers announced Tuesday that the state minimum wage would be increased to $9.25 an hour by 2018, Central Michigan University officials are beginning the process to see exactly how they can cope with the changes.
Barrie Wilkes, CMU's vice president for Finance and Administrative Services, said the quantification of the increase's impact is in the beginning stages, and is being formulated by the university's Human Resources department.
Preliminarily, Wilkes said the wage hike will increase some costs at the expense of the university, however, his office and HR didn't have specific figures regarding how many students would receive the increased wage. Wilkes said he would have those figures soon and remained uncertain if the university's finances could experience a negative effect.
"We've only just started running the numbers," he said. "I don't remember the specifics of the last time the wage increased, but I do know that for work study students, the award (of the increase) doesn't go that far."
The changes in minimum wage come from what is being hailed as a major bipartisan compromise, when both the Michigan House and Senate voted in favor of increasing the state's minimum wage from the current $7.40 an hour minimum to $9.25 an hour. The change in wage will take place over a period of years in four steps, according to a report published by The Detroit News.
In September, the amount will be increased to $8.15 an hour. That rate will then jump again to $8.50 in 2016, $8.90 in 2017 and, lastly, $9.25 at the beginning of 2018.
Democratic legislators were pushing for a higher rate of $10.10 an hour, but were met with a compromise from their Republican counterparts. The deal that was reached early Tuesday morning was quickly signed into law by Gov. Rick Snyder.
State Rep. Kevin Cotter and State Sen. Judy Emmons, both Republicans representing Isabella County, voted no on the measure. Phone calls to Cotter and Emmons' offices for comments were not immediately returned.
Due to the length of time offered as a buffer for the increase, Wilkes said CMU will have the appropriate time needed to adjust to the changes.
Wilkes added that the impact on student jobs could vary more depending on the department than the wage hike as a whole. For example, Wilkes' department only employs about two students per year, so the impact of having to pay more in increased wages would be minimal.
Compare that to a department with more student workers – Wilkes mentioned areas like facilities management, residence life and the Student Activities Center – and the cost impact of that increase could be more significant.
Wilkes surmised that there would be few cuts to on-campus jobs for students, yet without preliminary cost projections, he couldn't say for certain what the solution would be to accommodate the wage boost. Aside from cutting jobs, Wilkes said there are other ways the university could eat the cost, but they won't know until they have all the data.
"It does vary by department, but this is work that still needs to be done, jobs that need to be filled," he said. "When we look at these things, we can either stop offering these kinds of jobs, reduce the number of people or find different ways to make these jobs more efficient (so students can keep their jobs)."
Jon Goodwin, the manager of Student Employment Services, said the last time the minimum wage was increase in 2008, there was no major changes to the number of jobs offered to students.