Last month, the Michigan Supreme Court handed community colleges a loss. In a 4-3 ruling that split down party lines, the high court rejected a 2018 move by Michigan’s last Republican-led state government to “adopt and amend” a petition that would have raised Michigan’s minimum wage by $0.60-$0.75 per year through 2022 to raise it to $12 per hour. After 2022, the initiative would have tied the minimum wage to the rate of inflation.
Instead, the Legislature adopted the petition and immediately gutted it, replacing the more aggressive minimum wage increases with one that was much slower – hitting the $12 mark by 2030. The initiative also included a provision to eliminate the “tipped wage” for restaurant servers and other tipped workers, replacing it with a single minimum wage.
After years of legal wrangling, the Michigan Supreme Court ruled that the Legislature acted unconstitutionally by immediately amending the initiative. The law requires the Legislature to wait until the following session to make amendments to any initiatives it adopts.
The ruling means that Michigan’s current $10.33 minimum wage will zoom up to $12 in January and will then adopt the automatic inflation-driven increase provision after that. Many employers have already discovered that they can’t find workers at $10.33 or even $12 per hour as it is, so the change in the minimum wage law may have little effect on them. But restaurant workers – who depend on tips – fear that the changes to the minimum wage law will bring an end to their employment.
Minimum wage increases curb community college enrollment
So, why could this be a loss for community colleges? When the minimum wage rises, community college enrollment declines. As the minimum wage rises, more workers – especially those with little in the way of work experience or specialized skills – may find it harder to justify going to school to make the small wage premium that an associate degree or certificate brings.
Adding to the problem is the fact that community colleges will now need to demonstrate that their certificates enable a worker who has one to earn more than that worker would with only a high school diploma. Raising the wages that high school graduates make increases the pressure on community colleges to either improve the income potential of their certificate programs or to shut the programs down.
The penalty for not clearing the “high school diploma” bar is stiff. Community colleges whose certificate programs don’t meet or exceed this standard will no longer be able to issue federal financial aid to students in those programs. Associate degree programs – no matter how well or poorly they perform – are not subject to the “Gainful Employment” rules.
I’ve said before that the gainful employment standards render certificate programs not worth the financial risk they pose. Michigan’s abrupt about-face on its starting wage makes shutting down low-performance certificate programs even more urgent.
Photo Credit: Guy P, via Flickr
