New Michigan minimum wage takes effect

LANSING, Mich. (NEWSCHANNEL 3) - On this Labor Day some Michigan workers will be seeing a bump in pay as the state's minimum wage increase takes effect.

This is the first time the minimum wage has gone up in Michigan in 6 years.

Monday begins the gradual 25 percent increase.

Lawmakers passed the increase in May.

By January 2018 minimum wage will be up to $9.25 an hour.

Monday it moves from $7.40 to $8.15 an hour.

This will affect about 4 percent of workers here in Michigan.

This weekend during his weekly address, President Obama talked about the need for better pay in our country.

"While we've created more jobs at this point of the year than any year since 1999, too many families barely earn what they did in 1999. It's harder to pay for college, save, or retire, because people's wages and incomes have not gone up. Nearly all the gains of the recovery are going to the very top - and aren't making a difference in your lives. And I believe America does better when the middle class does better," said Obama.

Not everyone is happy, though. When the law first passed we spoke with some small business owners who fear they might lose out by having to pay workers more. They tell us they fear they will have to raise prices to be able to afford to pay workers more, and in turn, could lose customers.

Meanwhile, a new study finds 40 percent of Michigan households with at least one worker don't make enough money to meet basic survival needs.

The report was commissioned by the Michigan Association of United Ways.

It focused on people whose earnings are above the poverty line but still unable to cover expenses like housing, transportation and health and child care.

The study says the households are 13 percent short of filling the gap between how much money its earners take home and what's needed to cover those expenses.

The next minimum wage increase will come in January 2016. It will go up to $8.50 an hour.

Because it is such a slow increase and there's a small number of people making the minimum wage, economists say this should help some workers but not shake the overall economy.